EU General Court Rejects Russian Depository's Sanctions Challenge

The EU General Court on Sept. 11 rejected the Russian National Settlement Depository's challenge to its listing on the Russian sanctions list. The court said that the European Council didn't fail to show that the depository, which provides financial services and securities record-keeping and custody services, plays an "essential role in the functioning of Russia's financial system."

The National Settlement Depository was sanctioned in 2022 following Russia's invasion of Ukraine on the grounds that it played a key role in the function of Russia's financial system and thus provided material support to the Russian government.

The court said the depository "provides financial services of significant value both to the Russian Government and the Russian Central Bank," and makes "wider" contributions to the functioning of Russia's financial system. As a result, the depository provides the Russian government with "quantitatively and qualitatively significant material or financial support," the court said.

The depository argued that the restrictions led to the freezing of assets belonging to its customers who aren't subject to EU sanctions. The court said the depository can't rely on a right to property that it doesn't hold. However, the court said national authorities "must ensure that the interference with the right to property of the customers concerned is in compliance" with the Charter of Fundamental Rights of the EU when reviewing a request for release of a customer's assets.

The affected customers have legal remedies in national courts, the court said.