The EU stopped calling Russian businessmen oligarchs

In addition to excluding three businessmen from sanctions, the European Union clarified the language explaining the imposition of sanctions on 140 individuals and 41 structures. The EU abandoned the “oligarch” characterization in relation to Russian entrepreneurs

The Council of the EU has made changes to the reasons with which 140 individuals and 41 organizations associated with RUSSIA were included in the sanctions list, it follows from the new regulations approved by the Council.

In the reports justifying the introduction of personal sanctions, the characteristic “oligarch” no longer appears. For example, according to Alisher Usmanov, Pyotr Aven, Roman Abramovich, Viktor Rashnikov, Vyacheslav Kantor, Oleg Deripaska, this expression is replaced by “leading businessperson”.

The word “oligarch” has also been removed from most descriptions of President Vladimir Putin’s meeting with representatives of big business, which took place on February 24 (“meeting of oligarchs in the Kremlin” was replaced by “meeting of leading businessmen in the Kremlin”).

A number of Russian businessmen who challenged EU sanctions in COURT stated that they were not “oligarchs.” For example, the chairman of the board of directors of MMK, Viktor Rashnikov, denied that he was an oligarch, as follows from the September decision of the EU Court of Justice on his claim (the court rejected the claim to lift the sanctions and, in particular, did not examine the question of whether Rashnikov could be called an oligarch).

In the summer of 2023, the Council of the European Union clarified the formal criteria for introducing personal sanctions against Russian businessmen: if previously sanctions could be imposed against “leading entrepreneurs participating in sectors of the economy that provide a significant source of income to the government of the Russian Federation,” now this criterion has been split into two: any “leading” businessmen operating in Russia, and any businessmen from sectors that are a significant source of income for the state. In fact, this has expanded the circle of people who meet the criteria for European sanctions to be imposed against them.

For some businessmen, the EU has updated its motivation part in such a way that now these two criteria appear simultaneously. For example, the justification for sanctions against the main owner of Severstal, Alexei Mordashov, states that he himself is a “leading businessman” in Russia, and a businessman representing an industry that is a significant source of income for the state.

Among the changes in the substantive language of the sanctions is an updated rationale for the sanctions against Andrei Melnichenko. “Andrey Melnichenko is a Russian industrialist who continues to control a large fertilizer producer, the EuroChem group and the coal company SUEK. From March 9, 2022, Melnichenko transferred his shares in SUEK and EuroChem Group to his wife Alexandra Melnichenko. He continues to benefit from the assets he transferred to his wife,” according to the rationale, updated Sept. 14. The previous version said that Melnichenko is the former owner of the EuroChem group and SUEK.

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A representative of Andrei Melnichenko told RBC that he could not comment on the reasons that guided the EU Council in choosing the wording. A source close to Melnichenko’s lawyers added that EU legislation lacks clear control criteria, so the EU Council takes advantage of the legal uncertainty in this area.

Other amendments to the sanctions justification include indications that some individuals are on the list as “immediate family members” of sanctioned businessmen (for example, relatives of Dmitry Pumpyansky, Alexei Mordashov, Sergei Chemezov, Alisher Usmanov, etc.). Previously, these relatives appeared on the sanctions list as persons associated with sanctioned entrepreneurs. These amendments are also due to the fact that in the summer the European Union expanded the criteria for sanctions to the immediate relatives of businessmen. As follows from the updated justifications, immediate family members can mean not only parents , spouses or children , but also stepdaughters/stepchildren, cousins ​​(like Pavel Ezubov for Oleg Deripaska).

Finally, in a number of cases, the EU has updated information to reflect significant events that have occurred since the designation. For example, the fact that RNKB, sanctioned since 2014, became a subsidiary of VTB in 2023; Promsvyazbank acquired the state banks of the DPR and LPR in 2023, etc.