![Ruling [EGC] ¦ General Court Upholds Russia Sanctions Listing Despite Claimed Share Divestments](/assets/images/posts/pexels-ann-h-45017-38729301_1024.webp)
16 September 2026
Ruling [EGC] ¦ General Court Upholds Russia Sanctions Listing Despite Claimed Share Divestments
Minority stakes, claimed divestments and the limits of a Russia sanctions challenge
The General Court of the European Union has dismissed an action by a Russian businessperson against his inclusion and repeated maintenance on the EU sanctions lists adopted in response to Russia’s actions against Ukraine. The ruling deals with a question that sanctions screening teams meet constantly: how much weight a claimed sale of shareholdings carries when the listing rests on an economic role in sectors that fund the Russian state.
The judgment also sets out what the Council must prove, how much time and disclosure a listed person can expect, and why a minority stake can still amount to real influence over a company.
The dispute across four listing rounds
The applicant was listed in June 2024 and kept on the lists in September 2024, March 2025 and September 2025. He challenged each act in turn by adding statements of modification to his original action. The Council described him as a leading businessperson operating in Russia, with interests in iron ore and steel, coal, infrastructure and energy, and as someone whose businesses operate in sectors providing a substantial source of revenue to the Russian Government. The initial acts relied on the criterion for support to the Government and on two limbs of the businessperson criterion, which was widened in 2023: leading businesspersons operating in Russia, and businesspersons involved in sectors that provide a substantial source of revenue to the Government (the sector limb). The 2025 acts relied on the two businessperson limbs only.
The Court examined six pleas covering the duty to state reasons, the rights of the defence, the lawfulness of the criterion, errors of assessment and proportionality. It rejected all of them and ordered the applicant to bear the costs. Its decision rests on the sector limb alone, so it did not need to rule on the others.
Reasons that were clear enough to contest
The applicant argued that the original reasons referred only to the support criterion and left him unable to tell which criteria applied. The Court read the statement of reasons as a whole. The Council had reproduced the wording of both businessperson limbs, listed the sectors and named the companies concerned, so the applicant could understand the case and the Court could review it. A later letter from the Council confirming the criteria explained what was already clear and did not amend the reasons.
The rewritten reasons of March 2025, which described the applicant as a prominent shareholder in three companies, were also sufficient. The Court held that terms such as prominent or important indirect shareholder indicate holdings that the Council considered large or influential.
Five working days, late submissions and general acts
An initial listing does not have to be preceded by a hearing, because the measure depends on a surprise effect. It is normally enough to communicate the reasons and allow a reply at the same time as, or right after, the decision. Here the reasons were communicated the day after listing. The evidence file followed two weeks later, and the applicant had five working days to respond. The Court found that period sufficient because the file ran to 47 pages, made up of twelve mostly short press articles and website extracts.
For later renewals, the Council must review its decision when observations or substantial new evidence arrive, and it must examine them carefully and impartially. It does not have to accept them or answer every point. The applicant’s letter announcing a divestment reached the Council only days before the earlier acts expired, which left too little time for a proper examination, and the periodic review continued to protect his position. The Council also had no duty to disclose a working document on the availability and reliability of Russian business data in the same way as the evidence about him. The right to be heard does not extend to acts of general application, and the document was in any case sent to him before the September 2025 acts.
Press articles can carry a listing
The applicant called the Council’s evidence indirect and unreliable. The Court applied the principle of free evaluation of evidence and looked at credibility, origin and context. The EU has no investigative powers in third countries, so its assessment must draw on public sources, press reports and similar material, and the war makes primary sources hard to reach.
The evidence consisted of twelve articles from a range of outlets. The Court accepted a financial magazine as reliable in economic matters and an independent online newspaper despite three exhibits coming from it. A news agency regarded as controlled by the Russian State was held to have some reliability where the articles served to show that a person meets the criterion. Missing source citations did not by themselves deprive an article of reliability, and older exhibits from 2019 to 2022 were corroborated by more recent ones. Statements from company directors and opinions from a consultancy firm the applicant had commissioned carried little weight. They were written to challenge the listing and rested on documents never produced to the Court.
The businessperson criterion is lawful
The applicant argued that the sector limb lacked a sufficient link to Russia and had to be read as requiring proof, in each case, that the listing would increase pressure on the Government. The Court rejected both arguments. The Treaty allows restrictive measures against persons with an objective link to the third country, even an indirect one, and targeting businesspersons in revenue-critical sectors rationally serves the aim of raising the cost of Russia’s actions.
The criterion has its own limits. A businessperson pursues a qualitatively or quantitatively non-negligible economic activity, and a substantial source of revenue is significant and not negligible. The Council must show that a person is a businessperson and that the person is involved in such sectors. It does not have to add evidence that this individual listing increases pressure. The Court also found the criterion sufficiently precise for legal certainty and proportionate, given the Council’s broad discretion.
A minority stake can still mean influence
By his own account, the applicant held 31 percent of an investment company with airports and ports, and an indirect stake of about 25 percent in a large coal producer. He argued that both were passive minority holdings. The Court noted that, depending on the size of the holding, the spread of the other shares and how decisions are taken, a minority shareholder may exercise dominant influence and may be able to block strategic decisions on business policy, directors or budget. He had produced shareholder lists and register extracts but not the articles of association that would show whether his rights were limited. On the coal side, the Court accepted the Council’s evidence that he held a majority in the group through which he acquired the producer.
The applicant also relied on the EU Best Practices on ownership and control. The Court held that these criteria neither interpret nor restrict the sector limb. It further refused to import the competition-law concept of economic activity, which serves a different purpose.
Coal, energy and transport infrastructure fund the state
The Court held that coal is part of the energy sector, that both energy and coal provide a substantial source of revenue to the Russian Government, and that construction and transport infrastructure does as well. For infrastructure it pointed to the role of transport in moving raw materials for export. In the applicant’s own industry report, 91.7 percent of the 196.3 million tonnes of coal exported in 2023 left through seaports. The Council also showed that transport contributed roughly 6.3 to 6.5 percent of Russian gross domestic product.
The applicant had argued that the coal producer accounted for only 1.6 percent of national output rather than 10 percent. The Court relied on the ministry report he submitted, which recorded about 7.2 million tonnes of coking coal in 2023, and found that quantity significant.
Divestment claims must be proved
The Council bears the burden of establishing that the reasons for a listing are well founded. Where a person says his personal situation differs from the evidence, he must provide evidence that the claimed situation is genuine. The Court found none of the divestment evidence sufficient.
For a withdrawal from the investment company, the applicant produced a notarised declaration that only recorded his identity and his intention to withdraw and be paid out. The register entries showed his shares transferred back to the company he had founded and previously directed, not to an independent buyer, and he offered no articles of association or proof of what he received. For an earlier exit from an energy group, he gave no information on the transfer contract, price or payment arrangements. In February 2025 he had himself described the sale of his indirect stakes in the coal group as not final because it needed the lending banks’ agreement, so no transfer had taken place when the March 2025 acts were adopted.
For September 2025, he submitted depositary reports on transfers made by a company he wholly owned to two individuals and one legal entity. Without articles of association, transfer deeds, prices or payment details, these reports were not enough to show that he had given up his rights as a shareholder. Press coverage from June 2025 still presented him as the owner of the investment company, and an April 2025 article described him as able to conclude agreements with a regional governor on behalf of the companies. His claim that he had acted personally was unsupported. The Court accepted that the Council may keep relying on earlier evidence when the grounds are unchanged and the context has not made it outdated, and that this context includes the person’s own circumstances.
A freeze, not a forced sale
The applicant argued that the only way to escape the measures was to sell his shares, which infringed his property rights. The Court answered that the acts impose no obligation to divest. They only freeze his funds and economic resources in the EU. The right to property is not absolute, and the aims of maintaining peace and international security outweigh even considerable consequences for the person concerned.
What the ruling leaves open
Because the sector limb was enough, the Court expressly declined to rule on the leading-businessperson limb, on the support criterion, or on the provisions added by the May 2025 acts that concern the leading-businessperson limb. The judgment is also a first-instance ruling on a Council listing decision. It does not set standards for customer due diligence, although its assessment of evidence shows what a court considers convincing.
Consequences for sanctions screening and ownership analysis
Ownership thresholds are not a safe harbour. Stakes of roughly a quarter to a third in significant companies were treated as significant, and the EU guidance on ownership and control does not limit who can be listed. Screening should consider sector, role and influence as well as percentages.
When a customer or counterparty states that a listed person has sold out, firms should ask for the transfer documents, the identity of the transferee, the price and how it was paid, the constitutional documents and any third-party approvals. A transfer to the company itself or to related parties, a sale awaiting creditor consent and public reporting that still presents the person as owner are the facts the Court found unconvincing. Such situations also raise the question of sanctions circumvention, although the Court did not make that finding here. Press-based evidence was enough for a court when it came from varied outlets, was corroborated and was not contradicted by documents from the person concerned, which is a useful reference point for adverse-media reviews.
Dive deeper
EU Sanctions Helpdesk
The EU Sanctions Helpdesk platform supports European operators in complying with European Union restrictive measures (also known as sanctions) imposed worldwide.
Aimed primarily at Small and Medium-sized Enterprises (SMEs), the Helpdesk offers resources and personalised help to companies performing sanctions due diligence checks.