(CN) – The European Court of Justice on Tuesday upheld sanctions imposed on the Russian oil company Rosneft, in response to Russia’s continued undermining of Ukraine’s sovereignty.
After Russia annexed the Ukrainian territory of Crimea in 2014, EU lawmakers imposed restrictive measures on a number of Russian businesses trading in technology and goods and prohibited services needed for oil transactions.
The measures hampered Rosneft Oil’s ability to do business since they included a ban on oil exploration in the Arctic and in water deeper than 150 meters, both of which the company relied on to extract oil. It then challenged the sanctions – and Britain’s adoption of them – in the U.K. high court, arguing the restrictions violated the EU-Russia Partnership Agreement signed in 1994.
That court asked the European Court of Justice whether Britain had the authority to impose criminal penalties against Rosneft where it had violated the restrictive measures, and whether the restrictive measures imposed by EU lawmakers included transactions and global depositary receipts issued before the measures had been adopted in 2014.
In a 23-page preliminary ruling issued Monday, the Luxembourg-based high court found the legislation imposing the restrictive measures completely valid. For starters, EU lawmakers laid out sufficient reasons for imposing the measures and the reason for them – to get Russia out of Crimea and to bring stability back to Ukraine – justifies the hardships experienced by Rosneft and other companies that have been sanctioned.
The EU court also noted Russia’s continued military buildup along the Crimea-Ukraine border – meant to be a demarcation line – justifies restrictive measures that have become more severe and are not disproportionate interferences to Rosneft’s right to conduct business.
Meanwhile, the court also cleared Britain’s imposition of criminal penalties against Rosneft, which is owned in small part by a subsidiary of British Petroleum. The court said its ongoing clarification of the EU restrictions do not prevent member states from doing what they must to address violations of the measures.
Finally, the EU high court said nothing in the restrictive measures bars bank transfers by and to Rosneft, and that the measures do not involve asset freezes. They do, however, prohibit “the issuance of global depositary receipts representing shares issued before the adoption of those measures,” the court said.