More Than 'Reasonable' Suspicion Needed for Sanctions to Apply, UK Court Says

The U.K. High Court of Justice on May 3 said funds are subject to sanctions when a party can prove that the funds are being "in fact controlled" by a sanctioned party, not when there's "only reasonable cause to suspect" they are controlled by a sanctioned party, according to the Global Sanctions blog.

The decision was issued in response to a motion from Georgy Ivanovich Bedzhamov, former Vneshprombank (VPB) owner, in a suit brought by the bank against Bedzhamov, which said payments that stem from the litigation might violate U.K. sanctions on Russia because a sanctioned party owns or controls A1 LLC, which funds VPB. Bedzhamov said there's reasonable cause to suspect sanctioned individuals Mikhail Fridman, German Khan and Alexey Kuzmichev still control A1, and this notion must be "dispelled" before proceedings can continue. The court didn't decide whether A1 is controlled by the three individuals.

The suit was initially brought in 2019 by VPB against Bedzhamov for allegedly defrauding the bank out of over $1.67 billion.