Sanction Mistakes: The U.K. Corrects, Ukraine On Its Way

When sanctions are imposed on a massive scale, mishaps can occur.

Sanctions, imposed by a number of countries, are an important and efficient tool to counter Russian aggression. Traditionally heavily reliant on government and Russian special agencies, Russian economy used to be deeply rooted into Ukrainian economy, with its profits financing the Russian state. Moscow, by means of economic tools, attempts to influence and impregnate with own agenda other civilized countries.

However, when sanctions are imposed on a massive scale, mishaps can occur. A good example is the case of the Russian entrepreneur Oleg Tinkov. It took an entire year for the U.K. to lift the sanctions off Tinkov.

Tinkov publicly condemned the war against Ukraine, sold his shares in the Russian “Tinkoff Bank” that he founded, and voiced his decision to renounce his Russian citizenship in October 2022. But Britain imposed sanctions on the businessman on March 24, 2022.

To fix this error, Oleg Tinkov appealed to the Ministry of Foreign Affairs with a plea to cross his name out of the sanctions list, with celebrities backing this plea – the billionaire and founder of Virgin Group, Richard Branson, being among Tinkov’s supporters. On July 20, 2023, Tinkov was taken out of the U.K’s sanctions list. As a result, he’s no longer subjected to sanctions that entail seizure of assets and ban of provision of fiduciary services.

Ukraine also cannot afford the traditionally russian “come what may” approach. The correct imposition of sanctions and the option of having them lifted is a question of trust between business and government, a question of international scale no less.

It should be mentioned that Kyiv is demonstrating democratic approach and action-ready stance in this field. For instance, on July 25, President Zelenskyy brought up for discussion among the Cabinet of Ministers of Ukraine a case of sanctions against Parimatch. International gambling holding Parimatch got on sanctions list for no good official reason. The operations of the market’s leader were ceased with the help of sanctions.

As soon as the President was informed on the petition to cancel sanctions against Parimatch that had amounted 25 thousand signatures, Volodymyr Zelenskyy responded to the will of the people, and instructed the Cabinet of Ministers and a special task force to examine the situation and come up with necessary solutions. This approach is a sign of democratic society, and needs to be implemented in all similar cases. The President hears the voice of the nation and reacts in a timely and reasonable manner. It’s now the Cabinet of Ministers’ turn, which has to make a correct decision.

Parimatch press-service pointed out that there are no legal documents or any clear understanding whatsoever as for why the sanctions were imposed in the first place. The very freeform statement that the companies, Parimatch included, that made it to the list are connected with Russia, is divorced from reality. The company’s spokesperson added that in the two months of 2023 alone, Parimatch paid over €5 million in taxes.

Speaking of, Zelenskyy had a previous experience of correcting mistakes regarding the unfair placement on the sanctions lists a few years back. For example, Ukrainian authorities faced the blunder of adding “career criminals” to the sanctions list.

On May 14, 2021, the National Security and Defense Council of Ukraine imposed sanctions on 557 “career criminals” and 111 foreign nationals, who were considered high-ranking criminals. Names of the 44 “career criminals” were also published in the media.

Several months later, on October 16, 2021, Mykhailo Podoliak, Advisor to the Head of the President’s Office said in a commentary for Deutsche Welle that in the times of the former Minister of Internal Affairs Arsen Avakov (in office 2014 – 2021), 108 individuals had been mistakenly put on the list of criminals.

The Secretary of the National Security and Defense Council, Oleksii Danilov, said that 8 officials, who made mistakes assembling sanctions lists of criminals, were subjected to punishment: some of them were fired from the Ministry of Internal Affairs, two were demoted.

According to Oleksandra Ustynova, “Holos” opposition party member, “Avakov and his team, for monetary gains, took the real criminals off the lists, added the names of those they wanted to see on the lists instead”, particularly the fighters of the Ukrainian volunteer paramilitary battalions, a children’s martial arts club trainer, and a Ukrainian national, who failed to pay a traffic fine.

In turn, Rostyslav Kravets, a well-known Ukrainian attorney, says that mistakes in the process of mass imposition of sanctions on private and legal entities are inevitable, especially in the context of raging war.

“There are several ways to fix the said problems. The first one is to go to trial and appeal. The second way is to appeal to the authority that imposed the sanctions. In Ukraine’s case, this authority is the National Security and Defense Council. These are the options that exclude one another, and they can be tried simultaneously. The government can identify the mistake on their own”, said Mr. Kravets, adding that the judicial mechanism needs some improving.

Therefore, crafting an effective tool, which can mitigate the mistakable sanctions imposition, is an urgent matter to say the least. Tool for national and international level. Otherwise, there’s no point for the business to trust the state.