UK High Court Rejects First Delisting Challenge Under The UK's Russia Sanctions Regime

• Published date: 11 September 2023
• Subject Matter: International Law, Export Controls & Trade & Investment Sanctions
• Law Firm: Steptoe LLP
• Author: Mr Elliot Letts and Alexandra Melia

On August 18, 2023, the UK High Court issued a judgment in the first sanctions designation challenge pursuant to the UK's Russia sanctions regime under Section 38 of the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA"). The challenge was brought by Eugene Shvidler ("Mr. Shvidler"), a UK-US dual national businessman, following an unsuccessful ministerial review in which Mr. Shvidler sought to reverse his UK designation. The High Court rejected the challenge on the grounds that the decision to maintain Mr. Shvidler's designation was proportionate and non-discriminatory. Mr. Justice Garnham's judgment addressed both the threshold for a UK listing and the balance that must be struck between the rights of a designated person and the public interest when assessing a designation decision under Section 38 of SAMLA, points which will have broader relevance to future UK delisting cases.

The UK Designation

Mr. Shvidler was designated in the UK on March 24, 2022. The stated reasons for his designation were his association with Roman Abramovich ("Mr. Abramovich") and his role as a former non-executive director and shareholder of Evraz PLC ("Evraz"), which itself was designated in the UK on May 5, 2022, for carrying on business in sectors of strategic significance to the Government of Russia.

Ministerial Review of the Decision to Designate Mr. Shvidler

On March 31, 2022, representatives of Mr. Shvidler wrote to the Secretary of State requesting the written reasons for his designation. Having sought and received copies of the evidence supporting the original UK designation decision, Mr. Shvidler's representatives formally applied for a ministerial review pursuant to Section 23(1) of SAMLA on July 14, 2022, on the grounds that the basis for his designation was wrong. The decision was taken to uphold the designation and Mr. Shvidler was informed of that outcome on November 11, 2022, and provided with an updated Sanctions Designation Form ("SDF") and Sanctions Designation Form Evidence Pack ("SDFE").

Court Review of the Decision to Maintain Shvidler's Designation

Mr. Shvidler subsequently applied to the High Court to set aside the Secretary of State's decision to maintain his listing pursuant to the procedure under Section 38 of SAMLA. Section 38(4) of SAMLA requires the principles applicable to a judicial review to be applied to the review undertaken by the court. Judicial review proceedings permit a judge to review the way in which a decision has been made, but not...