Arbitrarily equating Russian business with the Russian state

The issue of protecting the immunity of government assets and officials who are subjected to unlawful attempts at recovery and seizure in international judicial proceedings is becoming particularly relevant. These actions often contravene basic principles of international law. A key aspect is the development of new approaches and tools for the defence of international legal immunity that would help prevent the illegal use of legal mechanisms for political and economic purposes. Such conclusions were reached by the participants of the session ‘Arbitrarily Equating Russian Business with the Russian State’, which took place within the framework of the St. Petersburg International Legal Forum.

The Forum is organized by the Roscongress Foundation with support from the Ministry of Justice of the Russian Federation.

KEY CONCLUSIONS

Asset misappropriation and sanctions violate international law

“The immunity of a sovereign state is a fundamental principle of international law. It is accepted by all states and can be avoided only in a very limited number of situations where the state gives its consent. Going back to the current situation of sanctions against Russia, where state property and assets are being appropriated under the auspices of sanctions, it is obvious that this comes into direct conflict with the fundamental principle of state immunity. From the point of view of international law, it seems to me that there will be a lot of problems and there will be a lot of cases that will follow the events that are happening now,” Sonny Payne, Partner, GPS Legal.

“There was a recent decision to change the EU regulation that allows interest [profits from the operation of Russian assets abroad, – Ed.] to be channelled into the EU budget to further support Ukraine [agreement reached at a planned EU Council meeting on 24 June 2024, – Ed.]. The RICO Act, which allows the President of the United States to seize the sovereign assets of the Russian Federation and its satellites outside the judicial system at his discretion. There are seizures of private property of individuals around the world because those individuals are either affiliated with the Russian Federation or are simply Russians,” Nikolay Feoktistov, Managing Partner, Voskhod Law Firm.

PROBLEMS

Disregard for international legal immunities and injustice in the judicial system

“We are now facing unlawful disregard of the immunity of the Head of State by the International Criminal Court, as well as other bodies. Expropriation of various assets, businesses, aircraft, sea vessels and so on in connection with sanctions or some decisions and foreign policy events. Attempts to declare state-owned companies as alter egos of the state for the purpose of foreclosing on their property,” Dmitry Malyshev, Special Representative, United Shipbuilding Corporation.

“Sanctions against VEB. Sectoral sanctions against VEB in principle were imposed back in 2014. We challenged these sanctions in the [EU] court. The court wrote in its judgement that VEB had not done anything illegal. Nevertheless, the act was not cancelled. It is 2022, the basis of the sanction is the partnership with the Ministry of Crimean Affairs. The Ministry of Crimean Affairs existed for a year. What are we talking about? We brought everything to the court, the court looked at it, upheld everything. Wrong assessment of the facts, violation of the principle of proportionality, violation of the principle of equal treatment and non-discrimination, violation of the principle of the right to a fair trial. Virtually all of their basic principles that underpin their justice system. People are violating them,” Mikhail Demin, Chief Managing Director of the Block of International Projects and Foreign Representative Offices, VEB.RF.

“There is already a tendency that companies with state participation are trying to be held liable for those obligations, for those judgements that have been made against the Russian Federation. You cannot identify a company with state participation with the state and hold it responsible for the decisions that have been made. Even if we do not agree with them, they have been made, and there are attempts to foreclose on them,” Sergey Kuznets, Member of the Management Committee, Head of Department 104, Gazprom.

SOLUTIONS

Systematisation of damage and proportionate response by the Russian authorities

“As for the practical ones, I liked the suggestion to make a registry of the damage incurred. This should be done by all affected corporations, because damage is done anyway. We should not minimize it. We should record it, log it and so on,” Dmitry Malyshev, Special Representative, United Shipbuilding Corporation.

 “In terms of defence, the threat of retaliation or retaliatory compensatory measures, it should prevent our former partners from doing wrong. We, too, must build our work in such a way that no matter what further improper steps are taken, we suffer the least. Build bilateral contacts, multilateral contacts with those countries that adhere to traditional, just principles of international law,” Sergey Kuznets, Member of the Management Committee, Head of Department 104, Gazprom.

“What can be another means is cooperation with your customers from countries that are engaged in anti-Russian activities. So that these customers make it clear to their legislators, to their government agencies that our cooperation is important, and without it they will have a hard time, it will be bad for them, they will spend a lot of money. This is not an argument now, when economic interests retreat in favour of politics, but in some future period it will play a role,” Andrey Shlyakhtov, Deputy General Director for Business Support and for Legal and Corporate Affairs, TENEX.

* This is a translation of material that was originally generated in Russian using artificial intelligence.

For more information, visit the Roscongress Information and Analytical System roscongress.org.

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