Ukraine sanctioning Putin's top-tier ally Medvedchuk was widely received as an overdue victory. But a full-fledged, comprehensive domestic sanctions policy would be even better.
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- Ukraine sanctions “Putin’s point man” Viktor Medvedchuk and wife
- the sanctions are legally justified;
- they will be effective;
- they can be challenged by the courts.
It turns out Ukraine lacks effective mechanisms and a legal basis to sanction Ukrainian citizens who support Russian aggression, either directly, such as by broadcasting Russian propaganda, or indirectly, such as by conducting business in occupied Crimea, thus paying large taxes to the Russian budget.
“Financing terrorism” – the only effective charge Ukraine can apply to sanction Ukrainian citizens
While Ukraine has imposed a wide range of sanctions on both Russian individuals and legal entities since 2015, as have the US and EU since 2014, the country has virtually no legal mechanisms to sanction its own citizens. Ukrainian law does not yet include activities such as producing and distributing pro-Russian propaganda, whitewashing and justifying occupation, and conducting business in occupied territories as preconditions for sanctions or criminal investigation.Presently, the sole criteria under which sanctions can be imposed on Ukrainian citizens is providing financial support to pro-Russian proxies in occupied Donbas, punishable under Article №258-5 of the Criminal code.
Where Putin’s media-wielding men in Ukraine get their money
REALNAYA GAZETA SHEDS NEW LIGHT ON MEDVEDCHUK'S COAL OPERATIONS IN OCCUPIED DONBAS
Sanctions were justified by facts of Medvedchuk’s Russia-based companies importing oil to occupied Donbas, as well companies linked to Medvdechuk illegally exporting coal from occupied Donbas to Russia, in particular Donskie Ugli.
Medvedchuk is involved in importing oil into occupied Donbas through the company Novoshakhtinsk Petroleum Products Plant (NPPP), which is owned by his wife, Oksana Marchenko.
NPPP is located in Russia's Rostov Region, conveniently less than 10 km from occupied Donbas. In 2019, the company’s profit increased sixfold; that same year, interruptions in gasoline and diesel fuel supply, which had regularly disrupted occupied Donbas since 2014, finally ceased.
Furthermore, in 2017 the oil extraction rights at Gavrykovskiy oil field located in the Khanty-Mansi Autonomous Okrug and one of the three largest Russian oil fields, were transferred to Marchenko with direct support from Russian officials. Oil extraction began there in 2018.
As for exporting coal from occupied Donbas to Russia, journalists at Realnaya Gazeta have calculated the scope of this operation by juxtaposing openly published data from both Ukrainian and Russian customs services.
According to records, Russia considers imports from occupied Donbas as Ukrainian, likely due to the Russian narrative of a Ukrainian civil war. The Ukrainian side, on the other hand, has no control over Donbas and, consequently, no data on coal exports from Donbas to Russia.
Therefore, Ukrainian customs data shows that no coal was exported to Russia in 2020. But Russian data from the same year lists 177 cases containing approximately 2.5 million tons of coal worth $81.1 mn imported from occupied Donbas to Russia.
Though Ukraine’s Security Service claims it has classified evidence demonstrating Medvedchuk’s control of the coal industry in Donbas, there is no publicly available information proving a direct link. Indirect evidence is available through several personal connections between Medvedchuk and various coal company managers in Donbas, in particular the local company Donskie Ugli.
No sanctions for business in Crimea
It is telling that Ukraine’s RNBO used Medvedchuk’s clandestine activities in Donbas, rather than his far more overt business activity in Crimea, to justify using the article on financing terrorism to impose sanctions. This is because Ukraine has not employed firm measures against its citizens who conduct business in occupied Crimea. Lawyer Vitaliy Vlasiuk explains this problem:“Sanctions [related to Crimea] are not well regulated in the Ukrainian laws. There remain ways to bypass sanctions. I would even say that sanctions are more about reputation. Those companies that respect themselves and want to work with serious western companies, those won’t enter Crimea... Others are eager to try various schemes to conduct business in Crimea despite sanctions... We are still not ready for the existential war. We don’t have clearly defined responsibility for bypassing sanctions. Only in 2015 our parliament adopted the responsibility for financing terrorism. It is this law that is often used in criminal proceedings in Ukraine, it allows to beat severely. But on the lower level we have no responsibility [for conducting business in Crimea].”
Currently, Medvedchuk owns two companies that actively operate in Crimea and are registered according to Russian laws, as well as several other business interests in Crimea, Realnaya Gazeta reported.
“The Law of Ukraine On Sanctions does not provide any mechanism for monitoring the implementation of sanctions, or a mechanism for liability for their violation, or a clear management system.”Klymenko and Huchakova also claim that Ukraine has not yet used sanctions to their full capacity as a weapon of economic warfare against Russia. Rather, they were used selectively for show. That is, sanctions are imposed occasionally, often due to pressure from civil society. Further, there is little infrastructure, both legal and administrative, to execute them.
For example, a single publicly available registry of sanctioned persons, or "blacklist," is maintained only by civic activists, who update it after each RNBO decision on sanctions.
Crimea. Dehydration: A film exposing Russia’s colonial policy and the desiccation of the occupied peninsula
Oil for the USA despite US sanctions
The most commonly-known example of Medvedchuk’s violation of international sanctions is export of Russian oil to Western countries, including the United States. Andriy Klymenko, editor in Chief of Black Sea News provided for Realnaya Gazeta an analysis of the traffic patterns of ships belonging to Rosewood Shipping and Sonor LTD, Medvedchuk’s companies that are registered to his wife. According to Klymenko:"Among the ships that they own, most are relatively small tankers with a maximum capacity of 5-6,000 tons. These are ships of the 'river-sea' class. But there are also three supertankers with a length of about 220-260 meters and a capacity of 70,000 to 110,000 tons. These are huge ships – Boray, Sanar 7 and Sanar 8. The traffic of ships looks like this. Supertankers arrive at an unofficial roadstead in the neutral waters of the Black Sea near the Kerch Strait. And smaller tankers bring oil to them from the Russian ports of Azov. In the open sea, oil is pumped into supertankers, and they are sent to the ports of the 'first world.' Judging by the routes of these giant tankers, they deliver oil products to countries such as the USA, France."
Progress, including proposal to abandon the law of an economic free zone in Crimea
Though the delays in clear laws to prosecute Ukrainians conducting business in Crimea have slowed progress, it is not too late to implement changes. Recently, Ukraine and its Ministry of Foreign Affairs have started revising Ukraine’s sanctions policy regarding Crimea. The creation of the post of Special Representative on Sanctions with an ambassador ranking is promising in efforts to coordinate international sanctions. The hardest work to be done is domestic, though. Ukraine's MFA has already announced that it will propose to repeal the law allowing the free economic zone in Crimea in preparation for the Crimean Platform Summit.Ukrainian lawmakers adopted this law in 2014, allegedly to facilitate the evacuation of Ukrainian assets from Crimea after its occupation. In practice, however, Ukrainian business holders in Crimea used it to easily re-register their businesses in accordance with Russian legislature and to continue their activity there.
To support the revocation of this law, the sanctions regime should be effectively managed and monitored. If Ukrainian authorities accomplish this in preparation for the Crimean Platform, there will be better opportunities to create a new, stronger wave of economic pressure against Russia.
Read also:
- Ukraine takes long-overdue action against major domestic pro-Russian actors
- Russia’s replacement of population in occupied Crimea violates Geneva Convention – UN report
- Ukraine wins crucial round against Russia over Crimea in the European Court of Human Rights
- Legal battle: How Ukraine sues Russia in international courts
- Crimeans have tap water only six hours a day as all Russian attempts to hydrate occupied peninsula fail
- Occupied Crimea not only part of Ukraine suffering from water shortages, Balabukh says
- Is Crimea now costing Russia more than it is worth?
- Zelenskyy prolongs ban on Russian social networks
