EU General Court Rejects Alfa Group Shareholder's Bid to Annul Sanctions Listing

The EU General Court on Nov. 29 rejected Russian oligarch German Khan's challenge to his sanctions listing, according to an unofficial translation. The listing criteria had a proper legal basis and were not disproportional, the court said.

Khan was sanctioned since he was one of the main shareholders of Alfa Group -- a conglomerate that includes Alfa Bank. In addition, the European Council said he "maintains close relations with Vladimir Putin" and benefits from "commercial and legal benefits" stemming from this relationship. The oligarch alleged in his court challenge that the council did not have the proper legal basis for imposing the sanctions, given that it violated the "principle of proportionality."

Khan challenged the council's position that since Alfa Bank was one of Russia's largest taxpayers, it provided a substantial benefit to the Russian regime. The court said that the council can legally sanction a businessperson using that justification, even if it is the business or business sector itself paying the taxes, and not the individual.

The oligarch also challenged the council's position on the grounds that the listing criteria, involving Alfa Bank's tax payments, was "inappropriate in light of the objective" to "weaken the" Russian government. The court found there to be a "logical link between targeting influential business women and men operating in economic sectors that provide substantial revenue to the government, given the importance of these sectors to the Russian economy."

Taking into account the "seriousness of the situation in Ukraine which remains, the fact that the objectives pursued by the restrictive measures have not been achieved and the absence of conclusive evidence" showing that Khan's situation had changed, the listing is valid, the court said. The court rejected Khan's evidence that he sold his shares in Alfa Group prior to being sanctioned.