The European Union continues to intensify sanctions against Russia to weaken its economic and military capabilities. While recent measures have targeted key sectors, government officials, and military personnel, private-sector figures have been largely absent from the newest sanctions packages.
This may be due to the EU’s growing struggle to justify its approach to sanctioning Russian corporate figures. Some restrictions are being lifted, others challenged in court, and the resulting inconsistencies risk undermining the credibility and coherence of the EU’s broader sanctions policy.
Legal Challenges Emerge
A recent example underscores this dilemma. The European Court of Justice is preparing to rule on the appeals of five Russians sanctioned in 2022 by the EU Council as “leading businesspersons.” In early June, Advocate General Laila Medina issued a non-binding opinion stating that while the criteria used were legally sound, sanctions must still serve their stated objectives. Individuals should be targeted not simply for who they are, but for their current roles and continuing relevance.
Defining “Leading Businessperson”
While Medina recommended rejecting the appeal, she offered important clarifications. The European Council, she said, need not prove direct influence over the Kremlin—participation in economically significant activities is sufficient. The term “leading” may be interpreted to mean “important,” rather than “influential.”
An individual’s status as a businessperson can be established through their occupational rank, the scope of their economic activities, capital holdings, and the functions they perform. The relevance of their sector and its potential influence also matter. Medina emphasized that “businessperson” typically refers to someone operating at an executive level in economic or commercial affairs.
Scope and Selectivity
This broad interpretation implies that any senior executive involved in a economy sector generating significant revenue for the Russian state, or so-called important businessperson regardless of how his economic sector is significant could qualify for sanctions. But if the threshold is so expansive, why have so few Russian executives actually been sanctioned?
This selective application undermines the credibility of the criteria and invites accusations of arbitrariness. Many Western companies continue to operate in Russia without consequence, while some sanctioned Russians have stepped down from their roles or divested—yet remain on the list with little prospect of removal. The growing disconnect between policy design and outcomes is becoming harder to justify.
Questioning the Logic of Sanctioning Business Executives
Medina’s opinion suggests that sanctions on key business figures can indirectly pressure the Russian state. But this logic is increasingly unconvincing. The notion that a handful of executives can alter their behavior in a way that measurably harms the Russian economy and shifts government policy lacks evidence.
Russia’s economy is broad and resilient, making it unlikely that sanctioning a few individuals – who themselves have no personal connections with the Government – will have any material impact on Russian economy. If the EU’s objective is economic pressure, sectoral or corporate sanctions are far more effective. Targeting individuals without proven ties to the state risks appearing arbitrary—a punitive measure with little strategic value.
Exit Doesn’t Mean Relief
Medina also noted that resigning from a sanctioned role could justify lifting restrictions—assuming there is no risk of circumvention. The EU has already lifted sanctions on some individuals who left sanctioned entities, such as Alexander Shulgin (former CEO of Ozon) and Vladimir Rashevsky (former CEO of EuroChem).
Yet others remain sanctioned despite taking similar steps. Dmitry Konov, former CEO of SIBUR, resigned three years ago, left ALROSA’s board, and now is occupied in the non-profit sector. Tigran Khudaverdyan, former CEO of Yandex, stepped down immediately after sanctions were imposed and has remained professionally inactive.
Policy Disconnect and a Chance for Redress
These cases expose a widening gap between legal rationale and practical enforcement. Medina acknowledged that sanctions should not be permanent if an individual has clearly distanced themselves from the Russian economic sphere. Keeping such individuals on the list undermines the logic of encouraging behavioral change.
Lawyers familiar with the appeals process note that the EU is starting to recognize flaws in its initial decisions. As the Financial Times reported, many sanctions were imposed hastily. Some have already been lifted from the relatives of sanctioned individuals, including the son of Dmitry Mazepin, the sister of Alisher Usmanov, and the son of Dmitry Pumpyansky.
Konov and Khudaverdyan now appear to have strong grounds for appeal. Neither is an oligarch; both were professional managers with no current business activity in Russia.
Toward a Smarter Sanctions Policy
Recognizing personal and professional changes as grounds for lifting sanctions is not only fair—it is also strategically sound. It signals that disengagement from sanctioned roles brings relief, encouraging others to follow suit. Without this flexibility, sanctions risk becoming static, symbolic punishments that offer no strategic gain—while burdening EU institutions with legal disputes and raising human rights concerns.
These cases highlight the need for a more adaptive and targeted sanctions regime. The EU’s credibility would benefit from a policy that balances firmness with fairness—and better aligns its methods with its objectives – not just harming individuals far from influencing state politics.
Main Image: Benoit BOURGEOIS © European Union 2014 – EP Usage terms: Identification of origin mandatory
