Imposition and Challenge of Sanctions in European Courts: Impact on Ukraine

Valeriia Gudiy, Partner

Oleh Trokhymchuk, Counsel, Co-Head of Dispute Resolution Practice

Source: Yurydychna Gazeta

Sanctions policy has become one of the key mechanisms of international security in the 21st century. The UN Security Council, the European Union, EU member states, the UK, Canada, and other subjects of international law apply economic and individual sanctions. Since 2014, and especially after the start of full-scale aggression by the Russian Federation in 2022, sanctions have become the dominant form of possible international influence on the aggressor state.

The Position of The Supreme Court in Cases Concerning the Imposition of Sanctions

Of course, when sanctions are imposed on certain individuals, there are always those who disagree with the restrictive measures applied to them. In our opinion, among the most complex cases in Ukraine in recent years are disputes challenging the decrees of the President of Ukraine on sanctions imposed by the National Security and Defence Council, as well as disputes in cases brought by the Ministry of Justice of Ukraine on the application of asset recovery sanctions provided for in paragraph 1-1 of Part 1 of Article 4 of the Law of Ukraine “On Sanctions”.

The Supreme Court, when considering sanction cases in recent years, has generally taken an extremely cautious position. The position of the Supreme Court has become consistent; cases are considered at length, “carefully” and “comprehensively”, but claims are denied with a general reference to the legality of the contested acts of the head of state.

The Supreme Court has repeatedly emphasised in its decisions that:

• the sanctions of the National Security and Defence Council are preventive in nature and, given the political situation in Ukraine and the need to protect the national interests of the state during martial law, are necessary to prevent the violation of such interests;
• the decrees of the President of Ukraine on the implementation of sanctions are not subject to assessment on the merits of establishing the grounds, circumstances for the application of sanctions and evidence, and verification (judicial review) is limited only to formal compliance with the procedure (for example, whether there is a proposal from the Security Service of Ukraine or the Cabinet of Ministers of Ukraine, whether there is a decree of the President of Ukraine, whether it has been published, and whether its form has been complied with).

At the same time, my colleagues and I remain hopeful that the practice of European courts and the Council of the European Union will become a landmark for Ukrainian judicial control.

Appealing EU Council Sanctions: Mechanism and Judicial Practice

The European Union’s sanctions regimes are not only about political or security measures, but also about legal regulation that directly affects the property, commercial, and other rights of individuals and companies. That is why effective judicial protection and clear criteria for justifying sanctions are key elements of the rule of law.

European Union sanctions against a specific person are adopted by the EU Council under Article 29 of the EU Treaty and implemented in the form of regulations under Article 215 of the Treaty on the Functioning of the European Union (TFEU). Such regulations are directly applicable acts that can be challenged by any person included in the sanctions lists in the European Court of Justice (Court of Justice of the European Union) on the basis of Article 263 TFEU.

In the Court of Justice of the European Union, the decisive factor in resolving a dispute is compliance with the individual’s right to an effective remedy, as well as the requirements of transparency, reasonableness, and sufficiency of evidence.

In recent years, cases challenging EU Council sanctions have evolved from being sporadic (irregular) to becoming a constantly evolving area of case law of the Court of Justice of the European Union. Such cases began to appear particularly actively after the introduction of package sanctions in connection with the Russian Federation’s aggression.

Between 2022 and 2025, the Court of Justice of the European Union issued several landmark decisions clarifying the balance between the political necessity of restrictive measures (sanctions) and the protection of fundamental rights and guarantees.

The Court of Justice of the European Union has established case law according to which EU institutions have the burden of proving the existence of specific facts justifying the inclusion of a person on the sanctions list.

Thus, in the cases of Petr Aven & Mikhail Fridman v. Council of the European Union (judgment of 10 April 2024 in cases T-301/22 and T-304/22) the court upheld the claims and ordered the annulment of the sanctions imposed on the applicants for a certain period (February 2022 – March 2023), as the Council of the EU had failed to provide sufficient individual justification and had not adduced appropriate and sufficient facts to demonstrate the need to impose sanctions on those persons.

In the cases of D. Pumpyanskiy v. Council of the European Union (judgment of 26 June 2024 in cases T-740/22 and T-737/22), the court upheld the claims of D. Pumpyanskiy and his family members and annulled the sanctions imposed on the applicants for certain periods (March 2024 – September 2024), noting that the term “leading businessperson” must be supported by evidence of actual influence/control and cannot be based solely on title or historical position without evidence of actual continuing influence. The court thus emphasised that the Council of the EU must assess changes in corporate governance (e.g., resignations, sales of shares, etc.) each time sanctions are renewed.

In its decision of 4 June 2025 in the case of Boguslayev v. Council of the European Union (Case T-161/23), the court explicitly stated that the Council of the EU had not provided any new evidence or assessment of Boguslayev’s conduct during the period justifying the extension of sanctions and had not carried out a proper reassessment of the circumstances. The Court emphasised that decisions on restrictive measures must be based on evidence that existed at the time of adoption, rather than merely general references to the situation in Ukraine or in the media. The Court emphasised that decisions must be based on facts, not on general statements or media publications. This approach demonstrates the priority of the presumption of innocence, the right to be heard and legal certainty.

The case law of the European Court of Justice shows that, despite the perception of sanctions as a political and security tool, they are a legal regulation that must comply with legal standards. For sanctions to be effective and legitimate, a clear evidence base and procedural guarantees are required, and the right to judicial protection must not be formal.

Appealing Sanctions in the ECHR: Approach and Judicial Practice

The decisions of the Court of Justice of the European Union are not binding on Ukrainian courts, although such decisions serve as a certain example for us. At the same time, the decisions of the European Court of Human Rights are a source of Ukrainian law in accordance with Article 17 of the Law of Ukraine “On the Enforcement of Decisions and Application of the Practice of the European Court of Human Rights”.

It should be noted that until recently, the ECHR rarely considered “sanctions” in the narrow international sense (for example, the EU Council’s sanctions packages). Such issues, as mentioned above, are considered by the Court of Justice of the European Union.

Most of the ECHR cases for 2020-2024 involving sanctions relate to the freezing of bank accounts, seizure/confiscation of property, travel bans and administrative/financial sanctions.

In this category of cases, the ECtHR mainly applies Article 6 of the European Convention on Human Rights (right to a fair trial), which deals with access to court, equality of arms, reasoning of decisions, access to evidence, and Article 1 of the First Protocol to the Convention (right to property), since most sanctions involve the freezing of assets, blocking of accounts, and prohibition of economic activity.

The ECHR also applies Article 8 of the Convention (right to respect for private and family life), as there are frequent cases of restrictions on the movement of persons included in sanctions lists, and Article 13 of the Convention (right to an effective remedy, which is violated when the applicant has no real opportunity to challenge their inclusion in the sanctions list).

For example, in the case of Al-Dulimi and Montana Management Inc. v. Switzerland (application no. 5809/08, judgment of 21 June 2016), the Grand Chamber of the ECtHR confirmed the court’s previously established position that “the right to a fair trial, guaranteed by Article 6(1) of the Convention, must be interpreted in the light of the principle of the rule of law, which requires that all parties to proceedings have an effective legal remedy enabling them to defend their rights and interests before the courts’ (para. 101). 6 of the Convention must be interpreted in the light of the principle of the rule of law, which requires that all participants in legal proceedings have an effective remedy enabling them to defend their civil rights… The Convention is designed to guarantee not theoretical or illusory rights, but rights that are practical and effective…”

Although this right is not absolute and may therefore be subject to certain restrictions at the national level, such restrictions are unacceptable if they negate the very essence of this right. Guided by this approach, the ECHR found a violation of Article 6 of the Convention in this case, where Switzerland applied sanctions to the applicants that were imposed on them not even by the state itself, but by the UN Security Council. In particular, the Swiss Federal Court considered itself obliged to limit itself to establishing whether the applicants had indeed been included in the lists of the Sanctions Committee established based on the UN Security Council Resolution and whether they had indeed been the owners of the disputed property, but refused to consider their claims that the procedure for confiscating their property did not comply with the fundamental procedural guarantees enshrined, in particular, in Article 6(1) of the Convention.

In another case also concerning sanctions imposed by Switzerland on the basis of a UN Security Council resolution — Nada v. Switzerland (application no. 10593/08, judgment of 12 September 2012) — the Grand Chamber of the ECtHR found a violation of Article 8 of the Convention, as well as Article 13 of the Convention, taken in conjunction with Article 8, emphasising that “the content of the obligations under Article 13 depends on the nature of the complaint lodged by the applicant under the Convention, but the remedy must in any event be ‘effective’ in both a practical and a legal sense…”.

The ECtHR has repeatedly stated that a ‘fair balance’ must be struck between the interests of society as a whole and the requirements of the protection of the fundamental rights of the individual. In this context, the ECtHR specifies that the necessary ‘fair balance’ will not be struck if the individual (as a result of the State’s actions) bears an individual and excessive burden (ECtHR judgment in the case of Brumarescu v. Romania, application no. 28342/95, judgment of 28 October 1999, para. 78).

Challenging Ukrainian Sanctions in European Courts: the First Sanctions Cases in the ECHR

The subject of regulation of Article 1 of Protocol 1 to the Convention is state interference with the right to peaceful enjoyment of property, and the ECHR has developed three criteria that should be assessed when analysing the compatibility of interference with a person’s right to peaceful enjoyment of property with the guarantees of Article 1 of Protocol 1, namely:

• whether the interference can be considered lawful;
• whether it pursues a “public” interest;
• whether such a measure (interference with the right to peaceful enjoyment of property) is proportionate to the aims pursued.

In the absence of a reasonable relationship and justified proportionality between the purpose of the state’s interference with a person’s right to peaceful enjoyment of property and the damage suffered by the person due to the inability to enjoy their property, as well as in the absence of compensation for the interference and legal grounds for such interference, there is a gross violation of a person’s right to peaceful enjoyment of property.

Given that complaints in the first sanctions cases in Ukraine, which were appealed in national courts, had long been accepted for consideration by the ECHR, we were waiting for the first decision, the first position, which would be the start of establishing the ECHR’s practice in sanctions cases.

In October 2025, the ECHR published its decision in the case of M.S.L., TOV v. Ukraine, in which the European Court explicitly stated that the state cannot justify any restrictions on rights by referring to national security without proper evidentiary justification. The ECHR also drew attention to the lack of an effective remedy, as national courts either refused to review the decisions of the National Security and Defence Council and the decrees of the President of Ukraine, citing the discretion of the authority, or only checked the formality, but not the content.

We expect that this practice of the ECHR will serve as a starting point for changing the approaches of Ukrainian courts and improving administrative procedures for imposing sanctions on certain legal entities and individuals, in particular that sanctions are not a political act that is beyond judicial control, and even when it comes to national security, there must be proper evidentiary justification and effective legal protection against violations of rights. There is hope that Ukraine’s European integration will create additional momentum for changing the approach to judicial control over sanctions, as our European partners directly emphasise that sanctions must be legally predictable, proportionate and justified.

The Impact of ECHR Decisions on Appeals Against Sanctions in Ukraine

According to Article 13 of the aforementioned Law “On the Enforcement of Decisions and Application of the Practice of the European Court of Human Rights”, in order to eliminate the grounds for applications against Ukraine to the ECHR caused by a problem that has already been considered by the ECHR, general measures should be taken, such as:

• amending the current legislation and the practice of its application;
• amending administrative practice;
• providing professional training on the Convention and the practice of the ECHR to prosecutors, lawyers, law enforcement officers, immigration service employees, other categories of employees whose professional activities are related to law enforcement, and others.

Will a single decision of the ECHR influence the formation of judicial practice? Time will tell, but we must talk about the practice of the European Court, because our task is not to complain against Ukraine, but to fight for effective legal protection in Ukraine.

If, in even one court case, the Supreme Court concludes that there is no real evidence, no real threat to national interests, and no real/reasonable grounds for applying the sanctions determined by the National Security and Defence Council (for example, the deprivation of state awards from a person who has never had state awards), and, as a result, that they are unlawful, this will be evidence that the principles of proportionality, predictability and effective judicial protection are being applied more widely in Ukraine.