A lawyer on the formation of sanctions lists: it is worth asking what is more important - the news of how the persons posing a threat were punished or the actual definition of who is a threat

The application of special economic and other restrictive measures, i.e. sanctions, has become almost a routine part of the Ukrainian political process. The sanctions lists are constantly expanding and more and more people are subject to restrictions, including not only citizens of the aggressor country, but also citizens of other countries and even citizens of Ukraine.

The sanctions mechanism, which originated in Western countries, is designed primarily to encourage the government of an unfriendly country to make positive changes and is mostly used when the country resorting to this tool has no other levers of influence. This mechanism has proven to be effective over the years, albeit not always one hundred percent.

However, in Ukrainian realities, it has been transformed - sanctions are also applied to Ukrainian citizens, to whom the state has other levers of influence, and the process of verifying individuals before including them in restrictive lists is shrouded in secrecy.

UNN talked to Opanas Karlin, partner of ESQUIRES law firm, attorney-at-law, about the shortcomings of the sanctions mechanism in Ukraine and how to improve it.

- How effective is the existing sanctions mechanism in Ukraine (both domestic sanctions and international sanctions)? Are they effective? Do they achieve the declared goal?

In general, the institution of sanctions, borrowed from the legislation of civilized democratic countries, can be an effective tool for protecting national interests from unfriendly acts of foreign countries and persons associated with them. Mostly, these are individuals against whom the state cannot take effective measures in any other way.

In Ukraine, the question of achieving the declared goals of sanctions is to some extent a philosophical one. And it has at least four dimensions.

The first question is whether it is appropriate to apply such a measure to its citizens who are on the territory of Ukraine and in respect of whom the state has a powerful toolkit of other measures of influence (including criminal or administrative liability, including interim measures, which are too widely used in recent practice). It should be emphasized that the state often limits itself to NSDC sanctions, neglecting other measures. One of the reasons is that sometimes the threshold for critical assessment of the use of (more powerful and allegedly more complicated in terms of the mechanism of imposition) NSDC sanctions is lower than the threshold for assessing the grounds for criminal and even administrative liability.

The second question concerns the validity of the sanctions. Can the declared goal of protecting national interests (national security, sovereignty and territorial integrity of Ukraine) be furthered by imposing sanctions on persons who do not threaten such values?

If we proceed from the presumption that the state's claims against the persons on the sanctions lists are justified, the third question arises: is there any correlation between the sanctions imposed and the persons to whom they are applied? It often seems that there is not. There are many cases of application of sanctions to individuals (Ukrainians) who are not even registered as individual entrepreneur, such as: "revocation or suspension of licenses and other permits", "prohibition of entry of foreign non-military vessels and warships into the territorial sea of Ukraine", etc. And this is not a joke. Assessing the effectiveness of such sanctions requires a specific sense of humor. Interestingly, the Supreme Court (which is the court of first instance in disputes over the application of sanctions) has an ambiguous approach to clarifying the grounds for applying such obviously irrelevant sanctions: sometimes it asks the SBU or the PGO to explain why they applied them (which is logical). But sometimes the Supreme Court asks the plaintiff (the person under sanctions) to explain how these sanctions violate his or her rights. But in fact, you don't have any ships/licenses, so these sanctions do not violate your rights. They were applied and that's it. It's just a game involving the highest officials.

The latter dimension of the issue is differentiated depending on the status of the sanctioned person. Experience shows that the application of such sanctions as asset freezes, restrictions on trade operations, suspension of economic and financial obligations, revocation or suspension of licenses and other permits to legal entities leads to a complete cessation of their business activities. If this is the goal of sanctions, it is achieved.

For individuals, this means, first of all, serious reputational losses, social stigmatization, destruction of business and social ties, problems with employment, etc. Secondly, it is the inability to access banking operations.

- What is the process of verifying a person/company before imposing restrictive measures on them in Ukraine/other countries?

In the United States, the President of the United States imposes sanctions programs in his executive orders if there is an "unusual and extraordinary threat... to the national security, foreign policy, or economy of the United States." The process of imposing sanctions is carried out mainly by the US Treasury Department, which has appropriate procedures for this.

Germany does not impose its own sanctions, but only joins the sanctions imposed by the UN Security Council and the EU. Ukraine, by law, can also join the sanctions of these authoritative organizations, but it has its own rather vague grounds for imposing sanctions, which are neither "unusual" nor "extraordinary."

The key problem in Ukraine, based on the practice of law enforcement, is the lack of procedures and standards of proof, and the sheer discretion of state bodies.

In the odious Russia, which does not even pretend to be a liberal country, one of the common grounds for adding a person in the "list of individuals and legal entities involved in extremism/terrorism" is the existence of a procedural decision (by an investigator/prosecutor) to recognize a person as a suspect or accused of committing one of the crimes of "extremist or terrorist orientation." We know how unreasonable this decision can be in this country, but Ukraine does not have this minimum "filter" either.

The Verkhovna Rada, the President of Ukraine, the Cabinet of Ministers, the National Bank, and the Security Service of Ukraine can submit proposals regarding the application of sanctions to the NSDC.

It is clear from the proceedings of cases appealing sanctions in the Supreme Court and from the statements of NSDC members in the media that neither the President of Ukraine (who imposes sanctions) nor the NSDC (which decides on their application) actually verify the validity of sanctions against a particular person - they trust the initiator.

Many of the sanctions were imposed on the basis of a submission by the SBU, which had no relevant criminal proceedings at the time of the submission and had not reached the stage of notification of suspicions by the time the sanctions expired (3 years). What can this indicate if not the complete arbitrariness of this measure?

In other words, when answering the question about the method of verification of persons/companies, it should be recognized that this issue is entirely at the discretion of the initiating body. That is, there may not be any "real" verification.

Another shameful fact is that there are examples of "package" discussions of sanctions, without any individualization and verification of the grounds for sanctions in the context of a particular person.

- It is known that in many countries those against whom sanctions are imposed learn about it after the fact, all actions to determine the grounds for imposing restrictions are carried out in secret. We do not object to the need for a sanctions mechanism, but does not this practice give grounds to talk about the restriction of the rights of those subject to these restrictions at the very beginning of the sanctions process?

It can be assumed that some secrecy in the review process and the suddenness of the imposition of sanctions may be justified in relation to one (new) type of sanction - asset forfeiture to the state. A person should not be aware of such intentions of the state so that he or she cannot withdraw or conceal his or her assets. As for the other types of sanctions, secrecy and suddenness are completely unnecessary.

In the United States, sanctions programs allow a person to know in advance about actions that could potentially lead to sanctions. In Ukraine, a person may not be aware of the reasons for sanctions even after they are imposed.

In one case, the President publicly announced one ground for imposing sanctions ("smuggling"). The sanctioned person is puzzled, because there is no criminal proceeding against him/her for smuggling (and this is confirmed by the Prosecutor General's Office), and even a protocol on violation of customs rules was not drawn up against him/her. A few days after the sanctions were imposed, the criminal proceeding was nevertheless opened and he/she was summoned for questioning as a witness. The question of the investigator of the SBU central office was: "tell us the reasons why you were sanctioned". It turned out that the investigator did not know these reasons either. Please note that this is not a joke or an exaggeration. There was not summoning for interrogation again, there was not reaching the stage of notification of suspicion, and the case may have already been closed. Then it gets even more interesting: in the Supreme Court, representatives of the Prosecutor General's Office point to other reasons for the sanctions, not smuggling (but something abstract: "potential threats to national interests" as a result of unclear reasons, but not smuggling). The formal basis for the sanctions is a reference from the Security Service of Ukraine, which is secret and cannot be reviewed by the person under sanctions, even in court.

At the same time, the law stipulates that transparency and objectivity are among the principles of sanctions.

Are these principles followed in the illustrated case study? Is this case a unique, single case

Are these principles followed in the illustrated case study? – No. Whether this case is unique, one-off – Not either.

- Could this eventually become the basis for a court appeal against the adding in the sanctions lists?

Not only could, but it is. Many cases in this regard are pending before the Supreme Court, which is the court of first instance in this category of cases.

- In your opinion, how should the process of selecting candidates for the sanctions lists work? How should the vetting process work? What role should media publications play in this process, especially at a time when we often face disinformation and paid information attacks?

I believe that the media can draw attention to potential problems, expose certain circumstances that should be the basis for further serious investigation with certain standards of proof and respect for the principle of presumption of innocence. Unfortunately, there are examples (in Ukraine and Russia) when law enforcement agencies use articles from media resources or journalistic investigations as evidence (and they are almost the only ones). This is unacceptable.

Given the significant shortcomings in law enforcement, clear criteria and standards of proof should be defined in law, otherwise anyone can be considered a "potential threat."

- Does the process of imposing sanctions require going through a court?

For example, the List of Persons Associated with Terrorist Activities is compiled by the State Financial Monitoring Service on the basis of an administrative court decision at the request of the Head of the SSU or his deputy.

Also, the fact that a certain subject has engaged in terrorist activities may be established by a verdict that has entered into force.

Thus, both methods of establishing a person's involvement in terrorism or its financing require a court decision.

At the same time, the Law on Sanctions, at least as interpreted by the President and the National Security and Defense Council, allows the latter to ignore such trivialities and decide on the issue of involvement in terrorism on their own.

- Do you see any elements of abuse or excesses in the imposition of sanctions in some cases? If so, please specify.

I believe that too much discretion of state authorities in this matter a priori creates fertile ground for all sorts of abuses. I think that the case I have cited is a clear confirmation of this.

- Do you think that sometimes sanctions become an element of political or business struggle?

Without naming any specific names, I can say that I know of cases where this was the case. When, for example, in the course of a "showdown," a person was threatened with being put on sanctions lists as an argument and means of intimidation, and later it happened.

- What is the process of lifting sanctions in Ukraine? Is it effective? Are there any cases when sanctions have been lifted?

Unlike, for example, France, Ukraine does not have an administrative appeal procedure against sanctions lists.

Potentially, the same government agencies that initiated the sanctions can ask to lift them. I know of examples when sanctions were changed or not extended, but not when they were lifted.

The only way available to those subject to sanctions is the Supreme Court. The practice is currently insignificant, but a trend has already emerged. First, there is a tendency to delay the proceedings, which looks like a way to wait until the sanctions expire. For example, at the end of the third (last) year of sanctions, the SBU submits "new" evidence to the court (which is substantially the same as the "old" evidence). Secondly, there are already up to a dozen decisions that have entered into force refusing to lift the sanctions. It is easy to assume that the next logical step is the ECHR.

- We see that sometimes sanctioned persons in the EU are released from the restrictions. Do you know how this process works, what is taken into account when making such decisions?

A person under sanctions can prove in court that he or she is not involved in the actions of which he or she was accused. The key difference from our realities is that a person always knows what he/she is accused of and what he/she should defend himself/herself against.

- Sanctions are aimed at forcing certain changes. Are such changes verified in Ukraine? How should it be conducted?

Unfortunately, no one makes such an analysis. Such an audit could reveal the shortcomings of the sanctions imposed and allow us to change priorities and approaches. It is worth asking what is more important: the news about how the persons posing a threat have been punished, or the actual determination of who is really a threat?

- Wouldn't sanctions be more effective if the approach to the formation of restrictive lists was more thorough and balanced, taking into account more aspects?

This is exactly what I'm talking about: the effectiveness of harming a particular person may be high, but it does not always have a connection with the interests of the state, to put it mildly. Sanctions require balanced approaches, standards of proof, an individual approach, and the ability of the person to know the essence of the claims and to submit their objections.