CASE OF M.S.L., TOV v. UKRAINE

FIFTH SECTION

CASE OF M.S.L., TOV v. UKRAINE

(Application no. 18049/18)

JUDGMENT
 

STRASBOURG

16 October 2025

This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of M.S.L., TOV v. Ukraine,

The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of:

 Kateřina Šimáčková, President,
 María Elósegui,
 Georgios A. Serghides,
 Gilberto Felici,
 Diana Sârcu,
 Mykola Gnatovskyy,
 Vahe Grigoryan, judges,
and Victor Soloveytchik, Section Registrar,

Having regard to:

the application (no. 18049/18) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by M.S.L., TOV, a limited liability company registered in Ukraine (“the applicant company”), on 10 April 2018;

the decision to give notice of the application to the Ukrainian Government (“the Government”) and the decision to request further observations from the parties pursuant to Rule 54 § 2 (c) of the Rules of Court;

the parties’ observations and their additional observations;

Having deliberated in private on 16 September 2025,

Delivers the following judgment, which was adopted on that date:

INTRODUCTION

1.  The case concerns economic restrictions imposed on the applicant company between 2015 and 2018 under the Sanctions Act and its unsuccessful attempts to challenge these measures. The applicant company relied on Article 1 of Protocol No. 1 to the Convention, as well as Articles 6 and 13 of the Convention.

THE FACTS

2.  The applicant company, M.S.L., TOV, is a limited liability company registered in Ukraine. It was represented before the Court by Ms N. Kucheruk, a lawyer practising in Kyiv.

3.  The Government were represented by their Agent, most recently Ms M. Sokorenko.

4.  The facts of the case may be summarised as follows.

5.  Since 2014, Ukraine faced unprecedented threats to its statehood and territorial integrity.

6.  By the end of 27 February 2014 the Russian Federation, through the active involvement of its military personnel, occupied Crimea and assumed effective control over the peninsula. This further resulted in a “referendum” on the future status of the peninsula, which took place on 16 March 2014, and the purported annexation of Crimea by the Russian Federation (for a more detailed description of the relevant events, see Ukraine v. Russia (re Crimea) (dec.) [GC], nos. 20958/14 and 38334/18, §§ 32-66, 16 December 2020).

7.  Almost in parallel, in early March 2014 pro-Russian protests began across eastern regions of Ukraine. By early April 2014 they had escalated into widespread violence. Some protesters formed armed groups, which started to forcibly take control of administrative buildings across the Donetsk and Lugansk regions. They announced the creation of self-proclaimed entities known as the “Donetsk People’s Republic” (“DPR”) and the “Lugansk People’s Republic” (“LPR”). The separatist entities in question enjoyed military, economic and political support from the Russian Federation (see Khlebik v. Ukraine, no. 2945/16, §§ 9-11, 25 July 2017, and Ukraine and the Netherlands v. Russia (dec.) [GC], nos. 8019/16 and 2 others, §§ 611-21, 628-39, 649-54, 670-75 and 684-97, 30 November 2022). From 11 May 2014 the Russian Federation, through, inter alia, its military forces, exercised effective control over the areas under separatist control in eastern Ukraine (see Ukraine and the Netherlands v. Russia, cited above, § 695).

8.  In response, starting from March 2014, various States and international organisations, led by the European Union and the United States of America, imposed economic sanctions on individuals and entities considered to have played a role in the aforementioned events in Crimea and eastern Ukraine, and thus to have undermined democratic processes and institutions in Ukraine, as well as its sovereignty and territorial integrity. By March 2025 the European Union had applied restrictive measures (sanctions) in connection with actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine to a total of nearly 2,400 individuals and entities[1].

9.  In that context, on 14 August 2014 the Verkhovna Rada (Parliament) adopted the Sanctions Act. Its Preamble referred, in particular, to “the need for an urgent and effective response to existing and potential threats to the national interests and national security of Ukraine, including hostile actions, armed attacks by other States or non-State entities, harm to the life and health of the population, hostage-taking, expropriation of property of the State, individuals and legal entities, causing property losses and creating obstacles to sustainable economic development and the full exercise by Ukrainian citizens of their rights and freedoms” (see also paragraphs 48-52 below). By March 2025 Ukraine had applied economic restrictions under the Sanctions Act to over 10,000 individuals and 7,000 legal entities[2].

10.  The Minsk Protocol, signed by representatives of Ukraine, the Russian Federation and the Organisation for Security and Co-Operation in Europe (OSCE), supplemented by the so-called Minsk II agreement in February 2015, sought to de-escalate the hostilities in eastern Ukraine by establishing a ceasefire and outlining steps toward a political resolution (see Ukraine and the Netherlands v. Russia, cited above, §§ 74-79, 232-41 and 246). However, no stable and lasting ceasefire was achieved (see Khlebik, cited above, § 12).

11.  On 24 February 2022 the Russian Federation commenced a full-scale military attack on Ukraine, which remains ongoing.

12.  The applicant company is a major operator of State lotteries in Ukraine. In 2014 it was the largest contributor to the military tax (військовий збір), a special levy introduced by the Ukrainian authorities to support the country’s armed forces. According to information provided by the applicant company, which was also cited by the domestic court in the relevant proceedings (see paragraph 28 below), the company had, at the time of the events, a multi-tiered corporate structure involving shareholders from Ukraine, the United Kingdom and Cyprus, with a Cypriot national, M.Sh., indicated as the ultimate beneficial owner.

13.  On 2 September 2015 the National Security and Defence Council of Ukraine (“the NSDCU”) issued a decision entitled “On the application of personal special economic and other restrictive measures (sanctions)”, stating as follows:

“In accordance with [section 5(3)] of [the Sanctions Act], [the NSDCU] has decided to:

1.  Support the proposals on the application of personal special economic and other restrictive measures (sanctions) that have been made by the Cabinet of Ministers ... and the Security Service of Ukraine.

2.  Apply, for a one-year period, personal special economic and other restrictive measures (sanctions) to:

(1) individuals as per Annex 1;

(2) legal entities as per Annex 2.

3.  The Cabinet of Ministers of Ukraine, together with the Security Service of Ukraine and with the participation of the National Bank of Ukraine and the Prosecutor General’s Office of Ukraine, shall ensure the implementation and monitoring of the effectiveness of the personal special economic and other restrictive measures (sanctions) provided for in paragraph 2 of this decision.”

14.  The annexes in question consisted of two tables, one in respect of individuals and another one in respect of legal entities. Each table contained four columns: (i) a number, (ii) the name and identifying details of the individual/legal entity subject to personal economic and other restrictive measures (sanctions), (iii) the grounds for the imposition of restrictions and (iv) the sanction type. A total of 388 individuals and 105 legal entities were listed (with the applicant company listed as number 98), including the armed separatist groups “Zorya”, “Kalmius”, “Oplot”, “Prizrak”, “Smert”, “Somali” and “Sparta” [3].

The grounds for the imposition of sanctions, as indicated in the second column of the table, were similar for all the individuals and legal entities concerned: they were limited to a citation of section 3(1)(1) of the Sanctions Act, either in its entirety (as in the case of the applicant company) or in part (see paragraph 50 below).

15.  The following sanctions were applied in relation to the applicant company:

“(1)  Freezing of assets – a temporary restriction on the right to use and dispose of assets;

(2)  Prevention of capital outflow;

(3)  Suspension of economic and financial obligations;

(4)  Termination of the issuance of permits and licences for the import and export of currency valuables, and restrictions on cash withdrawals from bank cards issued by [foreign entities to] foreign residents;

(5)  Prohibition on the National Bank of Ukraine from registering [the applicant company] as a participant in an international payment system where the payment institution is a foreign entity.”

16.  By Decree no. 549/2015 of 16 September 2015 (“the first presidential decree”), the President of Ukraine put into effect the NSDCU’s decision of 2 September 2015. The decree was published in the Government Gazette (Урядовий кур’єр) and entered into force on 22 September 2015.

17.  On 16 September 2016 and 28 April 2017 the NSDCU issued decisions extending, each time for another one-year period, the economic restrictions earlier imposed on the applicant company and a number of individuals and legal entities. The 2016 decision indicated the same grounds for extending the sanctions in the same manner as those used in their original imposition (citing section 3(1)(1) of the Sanctions Act in respect of each individual and legal entity concerned – see paragraph 14 above). However, the 2017 decision did not indicate any grounds for the extension (either in the text or annexes thereto). The decisions were put into effect by presidential decrees: Decree no. 467/2016 of 17 October 2016, which entered into force on 31 October 2016 (“the second presidential decree”) and Decree no. 133/2017 of 15 May 2017, which entered into force on 17 May 2017 (“the third presidential decree”).

18. Following the expiry of the third presidential decree (see paragraph 17 above), the applicant company was not subject to any further economic restrictions (sanctions).

19. On 11 March 2016 the applicant company instituted administrative proceedings against the President of Ukraine before the Higher Administrative Court, as a first-instance court, seeking the invalidation of the first presidential decree (see paragraph 16 above) in so far as it concerned the applicant company. It argued, inter alia, that the impugned decisions lacked specific grounds for the imposition of sanctions, that the applicant company had not engaged in any unlawful activities, and that the imposition of sanctions had been arbitrary and in breach of Article 1 of Protocol No. 1 to the Convention.

20. The representative of the President of Ukraine submitted objections in response to the applicant company’s claim, arguing that the impugned presidential decree had been issued on the basis of information provided by the Security Service of Ukraine (“the SBU”), within the President’s competence and in accordance with the applicable legislation. The SBU, which joined the proceedings as a third party, also objected. It insisted that the applicant company was controlled by citizens of the Russian Federation and was engaged in illegal gambling, money laundering and tax evasion. In particular, the SBU referred to a 2010 letter from the applicant company to the Ministry of Finance, in which the company indicated a certain Alfa Group (a large Russian private investment group) as its owner. It also referred to a similar remark about the applicant company made by the Minister of Finance during a 2014 briefing. Additionally, it referred to defamation proceedings from 2015 to 2016 in which the applicant company had unsuccessfully sought the retraction of a statement made in a letter sent by the SBU to a member of parliament alleging that the company was controlled by citizens of the Russian Federation.

The SBU also referred to findings by the State Financial Monitoring Service implicating the applicant company’s officials in laundering over 26 million Ukrainian hryvnias (equivalent to more than 1 million euros at the relevant time), as well as to an ongoing criminal investigation into the matter. Regarding tax evasion, the SBU alleged that the applicant company had underpaid its taxes relating to the sale of one of its lotteries. Lastly, the SBU accused the applicant company of using banned online casino software, engaging in illegal gambling operations under the guise of lotteries, and promoting gambling addiction (ludomania).

21. On 26 May 2017 the Higher Administrative Court stayed the proceedings. It noted that the applicant company’s claim raised the issue of compliance of the Sanctions Act with the Constitution, which only the Constitutional Court could assess. Accordingly, the case was referred to the Supreme Court of Ukraine, which, in turn, had the authority to initiate such a constitutional review.

22. According to the available information, on 4 September 2017 the Plenary of the Supreme Court of Ukraine decided that a referral to the Constitutional Court concerning the Sanctions Act required additional elaboration. Consequently, the referral was withdrawn from consideration (знято з розгляду).

23.  Following a judicial reform in Ukraine (see Gumenyuk and Others v. Ukraine, no. 11423/19, §§ 8-11, 22 July 2021), in January 2018 the applicant’s case was transferred to the Cassation Administrative Court within the newly created Supreme Court, which took over the examination of cases previously dealt with by the Higher Administrative Court.

24.  On 2 August 2019 the Cassation Administrative Court resumed the proceedings. However, its ruling did not address whether a constitutional review of the Sanctions Act was necessary.

25. The Cassation Administrative Court adjourned the hearings multiple times, mainly because the applicant company’s representative was required to obtain State secret clearance to access the case file, and owing to the unavailability of the equipment necessary for the audio recording of hearings involving State secrets. Eventually, the applicant company’s representative was granted access to the case file, including documents compiled by the SBU outlining the grounds for the imposition of sanctions.

26.  On 16 August 2022 the applicant company filed additional written submissions with the Cassation Administrative Court, relying on, inter alia, new grounds in support of its claim and providing further explanations regarding the effect of the imposed sanctions on its business operations. In particular, as to the new grounds, the company argued that there was no evidence that the first presidential decree had been pre-approved by the responsible officials within the Presidential Administration, as required by the established procedure. The applicant company also alleged that the responsible officials had failed to carry out an assessment of the fiscal impact the impugned sanctions may have had on the State budget, given the amount of military tax the company had previously paid (see paragraph 12 above). In its view, such an assessment was a mandatory step in the process of enacting any presidential decree.

27.  The applicant company also asserted that, as a result of its bank accounts being frozen, it was no longer able to transfer or receive non-cash payments and pay out large monetary prizes to its customers. In this regard, it had made requests to the State Fiscal Service and the Ministry of Finance asking for clarification on how it could continue to pay taxes and other contributions to the State budget despite the freeze, but had received no meaningful reply. The only practical way for it to meet – even partially – its budgetary obligations was to use cash deposited with its network of lottery distributors. However, due to regulatory restrictions limiting such daily cash deposits to 10,000 Ukrainian hryvnias, its ability to make mandatory payments to the State had been severely curtailed.

28.  On 29 November 2022 the Cassation Administrative Court dismissed the applicant company’s claim in full. Having examined its corporate structure, including the identities of the individual shareholders of its holding company and its network of subsidiaries, the Cassation Administrative Court established that, at the relevant time its corporate structure included shareholders from Ukraine, the United Kingdom and Cyprus, while its ultimate beneficial owner was a Cypriot national, M.Sh. The court further held that the applicant company belonged to the category of entities which could be subject to sanctions under the Sanctions Act, that there were sufficient grounds for imposing sanctions on the company, that the decision to impose sanctions was adequately reasoned, that the decision was not disproportionate and that the company had not challenged the procedure by which the sanctions had been imposed. Referring to the Grand Chamber of the Supreme Court’s ruling of 7 July 2022 (see paragraph 57 below), it noted that the Sanctions Act set out the grounds, conditions and objectives for the application of sanctions in a sufficiently clear and foreseeable manner.

29.  With regard to the grounds for imposing sanctions, the Cassation Administrative Court referred to information provided by the SBU in its objections to the applicant company’s claim (see paragraph 20 above), as well as to a classified “information document” prepared by the SBU. This document alleged that the company was controlled by citizens of the Russian Federation and was involved in money laundering, tax evasion, illegal gambling and the promotion of ludomania. One paragraph of the judgment was withheld from public access in view of the classified nature of the information it contained. The court further held that the SBU and other State authorities “bore responsibility” for the completeness and accuracy of the information provided. In support of this position, it referred to the Grand Chamber of the Supreme Court’s ruling of 13 January 2021 (see paragraph 56 below), which stated that the existence of threats under the Sanctions Act was an evaluative concept implying a certain level of discretion and requiring only a limited judicial review. The Cassation Administrative Court concluded that the circumstances established by the SBU constituted “appropriate grounds for submitting proposals to the NSDCU” regarding the imposition of sanctions on the applicant company. However, the court declined to assess these grounds itself, stating as follows:

“... the scope and outcome of the assessment of [the SBU’s proposals to the NSDCU] are beyond judicial review, as the administrative court is not authorised to decide on matters of national security and defence, nor to coordinate or oversee the authorities’ activities in the sphere of national security and defence. Such authority lies exclusively with the NSDCU in accordance with the Constitution of Ukraine and [the Sanctions Act]. It is the President of Ukraine who, in putting into effect the NSDCU’s decision, carries out an assessment of the existence and sufficiency of grounds for the application of sanctions.”

The Cassation Administrative Court also rejected the applicant company’s arguments regarding the absence of court judgments establishing its involvement in any alleged wrongdoing. The court stated that sanctions imposed under the Sanctions Act differed from measures ordered within the framework of criminal proceedings and did not necessitate a prior finding of guilt in a criminal offence.

As to the reasoning of the impugned presidential decree, it held that the relevant NSDCU decision, which was to be considered part of the decree, contained all the necessary details and was properly reasoned.

Lastly, with regard to the proportionality of the imposed sanctions, the court referred in broad terms to the applicant company’s “actions and their assessment in the light of national interests” and, noting the limited duration of the sanctions, held that they had been proportionate.

30.  On 12 January 2023 the applicant company lodged an appeal against the above ruling with the Grand Chamber of the Supreme Court. In its appeal, the company argued, inter alia, that Ukrainian law did not provide for any limitations on the scope of review of presidential decrees by the domestic courts, and that the Cassation Administrative Court should therefore have examined the grounds for imposing sanctions on it, notwithstanding the President’s discretionary powers in this area. In this regard, it referred to a judgment of the Cassation Administrative Court in a similar case (see paragraph 54 below), in which the claimant had successfully challenged the imposition of sanctions in view of the lack of grounds for doing so. Furthermore, the applicant company argued that there was no admissible evidence demonstrating that it had ever been controlled by a citizen or entity of the Russian Federation, that the letter it had sent to the Ministry of Finance had been subsequently recalled and that the classified “information document” used by the SBU to substantiate its allegations against the applicant company contained unverified speculations.

31.  The applicant company also challenged the SBU’s allegations concerning money laundering, tax evasion, illegal gambling and the promotion of ludomania (see paragraph 20 above), claiming that these facts had never been established in any judicial proceedings. It also submitted that neither the impugned presidential decree nor the NSDCU’s decision contained any information concerning the grounds for the imposition of sanctions on it. Lastly, referring to its additional observations (see paragraph 26 above), the applicant company claimed that the Cassation Administrative Court had wrongly concluded that it had not challenged the procedure by which the sanctions had been imposed.

32.  On 27 August 2024 the Grand Chamber of the Supreme Court found against the applicant company. In dismissing the appeal, it followed the reasoning of the first-instance court and, referring to its own ruling of 13 January 2021 (see paragraph 56 below), reiterated its conclusion about the limited judicial review of presidential decrees concerning the imposition of sanctions:

“84. The Grand Chamber of the Supreme Court notes that, in accordance with [Article 124 § 3] of the Constitution of Ukraine, the jurisdiction of the courts extends to any legal dispute. However, in certain categories of disputes involving ... the authorities’ decisions (for instance, disputes regarding the imposition of [sanctions]), judicial review may be subject to certain limitations in view of the scope of discretionary powers of the authorities that issued the impugned decisions ...

86. The Grand Chamber of the Supreme Court concurs with the first-instance court’s conclusion that the scope and outcome of the [President’s] assessment of the significance of the risks that served as grounds for imposing [sanctions on the applicant company] are beyond judicial review, since the administrative court has neither the competence to decide on matters of national security and defence nor the authority to coordinate and oversee the activities of [the authorities in this domain].

87. ...When enacting decisions of the NSDCU concerning such sanctions, the President ... must independently assess the existence and sufficiency of grounds for imposing sanctions. Judicial review of such decisions is limited, as, on the one hand, the court may not substitute its own assessment for that of the President regarding the reality of threats to the national interests, national security, sovereignty and territorial integrity of Ukraine, and, consequently, the existence and sufficiency of grounds within his discretionary authority for imposing sanctions (as doing so would violate the principle of separation of powers), but, on the other hand, the court may verify compliance with the limits of that discretion and adherence to the procedure for imposing sanctions.

88. Accordingly, the Grand Chamber of the Supreme Court dismisses the arguments in the [applicant company’s] appeal that, by referring to the limited judicial supervision in this category of cases, the court evaded the administration of justice.”

33.  The Grand Chamber of the Supreme Court further held that, in putting into effect the NSDCU’s decision concerning the applicant company, the President had not overstepped the discretionary powers vested in him. It also held, without providing any details, that the impugned decision contained no signs of arbitrariness.

34.  With regard to the allegations of a breach of the internal procedure for the imposition of sanctions (see paragraph 26 above), the Grand Chamber of the Supreme Court observed that those arguments had been submitted by the applicant company out of time and therefore should not be taken into consideration. As to the SBU’s attempts to lift the sanctions against the applicant company (see paragraph 46 below), it stated as follows:

“136. The SBU’s proposal to consider lifting the sanctions, in itself, cannot be construed as an absence of grounds for imposing them, because, under the law, the establishment of such grounds falls exclusively within the competence of the NSDCU.”

35.  The rest of the applicant companies’ arguments were dismissed as unsubstantiated.

36.  In October 2016 and November 2017 the applicant company brought administrative proceedings before the Higher Administrative Court seeking the annulment of the second and third presidential decrees, respectively, in so far as they applied to the company.

37.  Both sets of proceedings were adjourned multiple times, primarily because the judges and representatives of the parties lacked State secret clearance, and owing to the unavailability of the technical resources necessary for conducting hearings involving State secrets.

38.  On unspecified dates both sets of proceedings were transferred to the Cassation Administrative Court within the Supreme Court for consideration on the merits.

39.  On 22 February 2023 and 8 February 2024 the Cassation Administrative Court dismissed the applicant company’s claims in the third and second sets of proceedings, respectively.

40.  The applicant company appealed to the Grand Chamber of the Supreme Court. However, on 27 August 2024 its representative filed two identical applications to withdraw its claims in the second and third sets of proceedings. Along with these applications, the representative made the following declaration:

“The [applicant company] understands that in these challenging times it is important not only to pursue its own business interests, but also to contribute to societal cohesion, cooperation with State authorities and maintenance of economic stability. Under current conditions, all conflicts and disputes must be resolved in a spirit of national unity and in pursuit of the shared objective of defeating external aggression and restoring peace in Ukraine. The withdrawal of this claim, which challenges a decree of the former President, is a conscious decision which stems, in particular, from a deep understanding of the importance of cohesion over rivalry with the former State leadership during such a critical period for the country.”

41.  On the same day the Grand Chamber of the Supreme Court accepted the applicant company’s withdrawal of its claims, declared the decisions of the Cassation Administrative Court in the second and third sets of proceedings (see paragraph 39 above) invalid (нечинними) and closed both sets of proceedings.

42.  On 5 October 2015 the applicant company’s ultimate beneficial owner, M.Sh., asked the SBU to launch a criminal investigation into the alleged offences committed by the applicant company’s officials, as implied by the NSDCU’s decision (see paragraph 13 above), stating that he had no prior knowledge of the allegations. He referred, in particular, to the provisions of the Criminal Code penalising the following offences: infringement of the territorial integrity and inviolability of Ukraine (Article 110); financing of actions committed with the aim of forcibly changing or overthrowing the constitutional order, seizing State power, or changing the boundaries of the territory or State border of Ukraine (Article 110-2); creation of a terrorist group or terrorist organisation[7] (Article 258-3); and financing of terrorism (Article 258-5).

43.  Following M.Sh.’s request, on 14 December 2015 the SBU launched an official investigation under Article 258-5(1) of the Criminal Code.

44.  On 31 March 2017 the SBU discontinued the investigation, concluding that no criminal offence had been committed. According to the available documents, its decision was based on interviews conducted with numerous former and current officials of the applicant company, and on information obtained from various State agencies, such as multiple SBU departments, the National Police, the State Fiscal Service and the State Financial Inspectorate, none of which indicated any involvement by the applicant company in the financing of terrorism.

45.  On 7 September 2016 the applicant company requested that the SBU initiate the process of lifting the sanctions imposed by the NSDCU. The company provided information on its corporate structure and the identities of its founders and owners, denying any links with the Russian Federation or involvement in the financing of terrorism.

46.  The following day the SBU informed the applicant company that, having examined its request and verified the information therein, it had sent a letter to the NSDCU with a suggestion to consider removing the company’s name from the list of legal entities subject to sanctions.

RELEVANT LEGAL FRAMEWORK AND PRACTICE

47.  The Constitution sets out the following principles and establishes the following rules:

(i) the rule of law, including the superiority of the Constitution over ordinary legislation (Article 8);

(ii) the inviolability of the right to private property, according to which “no one may be unlawfully deprived of the right to property” (Article 41);

(iii) restrictions on constitutional rights may only be introduced in the cases specified in the Constitution (Article 64);

(iv) the President of Ukraine is responsible for ensuring the independence and national security of the State and, on the basis and in accordance with the Constitution and the laws of Ukraine, issues decrees and directives that are binding throughout the territory (Article 106);

(v) the NSDCU acts as the co-ordinating body under the President of Ukraine on matters of national security and defence, and its decisions are put into effect by presidential decrees (Article 107);

(vi) the jurisdiction of the courts extends to all legal disputes and all criminal charges (Article 124);

(vii) the Constitutional Court reviews the constitutionality of laws enacted by Parliament on applications from the President, no fewer than forty-five members of parliament, the Supreme Court, the Parliamentary Commissioner for Human Rights and the legislature of the Autonomous Republic of Crimea (Article 150).

48.  The Sanctions Act was adopted by Parliament on 14 August 2014. The relevant extract of the Preamble is quoted in paragraph 9 above.

49.  Section 1 sets out the objectives and principles as follows:

“1.  To protect the national interests, national security, sovereignty and territorial integrity of Ukraine, to counteract terrorist activity, and to prevent violations and restore violated rights, freedoms and lawful interests of the citizens of Ukraine, society and the State, special economic and other restrictive measures (hereinafter referred to as sanctions) may be imposed.

2.  Sanctions may be imposed by Ukraine against a foreign State, a foreign legal entity, a legal entity controlled by a foreign legal entity or a non-resident individual, foreign nationals, stateless persons and entities engaged in terrorist activities.

3.  The imposition of sanctions shall not exclude the application of other measures to protect the national interests, national security, sovereignty and territorial integrity of Ukraine, its economic independence, rights, freedoms and legitimate interests of the citizens of Ukraine, society and the State.”

50.  Section 3, which lays down the grounds for the application of sanctions, reads as follows:

“1. The grounds for the imposition of sanctions shall include:

(1) actions of a foreign State, foreign legal entity or individual, other entities that create real and/or potential threats to the national interests, national security, sovereignty and territorial integrity of Ukraine, promote terrorist activities and/or violate human and civil rights and freedoms, the interests of society and the State, result in the occupation of territory, expropriation or restriction of property rights, property losses, the creation of obstacles to sustainable economic development and full exercise by Ukrainian citizens of their rights and freedoms;

(2) resolutions of the United Nations General Assembly and Security Council;

(3) decisions and regulations of the Council of the European Union;

(4) facts of violations of the Universal Declaration of Human Rights, the Charter of the United Nations.

2. The imposition of sanctions shall be based on the principles of legality, transparency, objectivity, conformity to purpose and effectiveness.

3. The grounds for the imposition of sanctions shall also be the commission by a foreign State, a foreign legal entity, a legal entity controlled by a foreign legal entity or a non-resident individual, foreign nationals, stateless persons and entities engaged in terrorist activities, of the actions specified in [section 3(1)(1)] in relation to another foreign State, citizens or legal entities of the latter.”

51.  Section 4 lists the types of sanctions that may be applied. It includes, inter alia, the measures applied in relation to the applicant company (see paragraph 14 above).

52.  Section 5 provides that decisions concerning the application, cancellation and amendments of sanctions in relation to certain foreign legal entities, legal entities controlled by a foreign legal entity or a non-resident, foreign nationals, stateless persons or entities engaged in terrorist activities are issued by the NSDCU and put into effect by presidential decrees. Such decisions are binding and take effect on the date of the decree’s enactment. Sanctions are lifted by the State authority that imposed them once the objectives for which they were introduced have been achieved.

53.  Section 10 of the NSDCU Act provides that decisions adopted by the NSDCU are put into effect by presidential decrees. After that, such decisions are binding on all State authorities.

54.  In a decision dated 18 June 2020 (case no. 9901/259/19) the Cassation Administrative Court ruled on a claim by a Swiss-registered legal entity seeking the annulment of the presidential decree by which a decision of the NSDCU had been put into effect. According to the wording of the decision, the claimant was included in the list of legal entities subject to sanctions in view of its alleged business relations with a Russian operator of a titanium dioxide plant in occupied Crimea. Having examined the case, the Cassation Administrative Court reviewed the grounds for the application of sanctions, found no factual information that could justify their application against the claimant and annulled the relevant part of the presidential decree.

55.  In several other domestic cases related to sanctions, which the Government referred to in their observations, the Supreme Court dismissed the claimants’ claims after reviewing the grounds for imposing sanctions and examining the substance of the allegations made against them (see the Grand Chamber of the Supreme Court’s rulings of 6 July 2023 in cases nos. 9901/635/18 and 9901/376/21; 13 January 2021 in case no. 9901/405/19; and 3 March 2020 in case no. 9901/783/18; see also the Cassation Administrative Court’s ruling of 24 May 2021 in case no. 9901/424/19).

56.  In a ruling dated 13 January 2021 (case no. 9901/405/19), the Grand Chamber of the Supreme Court, after reviewing an appeal concerning sanctions imposed on a legal entity, concluded that establishing the existence of threats under the Sanctions Act was an evaluative concept implying a certain level of discretion. In cases where sanctions were imposed on the basis of NSDCU decisions, it was the role of the President of Ukraine to make an independent assessment regarding the existence and sufficiency of grounds for the application of sanctions. As to the level of judicial scrutiny of such decisions, the Grand Chamber of the Supreme Court held as follows:

“Judicial review of such a decision is limited because, on the one hand, the court cannot reassess for the President the existence and sufficiency of such grounds within the limits of his discretion (which would infringe the principle of the separation of powers), but, on the other hand, the court can check whether the limits of that discretion and the procedure for the application of sanctions have been complied with.”

57.  In its ruling of 7 July 2022 (case no. 9901/348/21), the Grand Chamber of the Supreme Court, after reviewing an appeal by a company seeking the imposition of sanctions on third parties, concluded that under the Sanctions Act, the State had a legitimate right to derogate from certain constitutional rights, but, at the same time, in order to prevent arbitrariness and totalitarianism, it had to apply sanctions on an exceptional and temporary basis, and only as a measure of last resort. Moreover, it should apply them in a manner commensurate to the threats to be prevented. The Grand Chamber of the Supreme Court further observed that the Sanctions Act laid down the grounds, conditions and objectives for the application of sanctions in a sufficiently clear and foreseeable manner.

58.  The relevant extracts read as follows (footnotes omitted):

“18. The Special Rapporteur recalls that, given the absence of a universally recognized definition of unilateral coercive measures and their illegal character as referred to in a number of resolutions of the Human Rights Council and the General Assembly, States prefer to present their unilateral activities as not constituting unilateral coercive measures and therefore to use other terms, including “sanctions”, “restrictive measures”, and many others ...

19. It is notable that today there is no clear definition even of the general notion of “sanctions” in international law.

 ...

49. Targeted sanctions applied to individuals and companies were introduced in order to minimize the negative humanitarian impact of comprehensive or economic sanctions. International law does not regulate them specifically. They traditionally include travel and visa bans, freezing of assets, prohibitions to satisfy claims related to the introduction of sanctions, prohibition of the export of and of assistance in setting up hardware and software, prohibition of the purchase of hardware, limitations on dual‑use goods and equipment, and restrictions on the purchase of goods originating from a particular State.

50. The Special Rapporteur notes that the purpose of listing individuals or companies may be to implement resolutions of the Security Council acting under Chapter VII of the Charter of the United Nations, often going beyond the authorization of the Council or acting autonomously to maintain international peace and security; to suppress international, transnational or national crimes; to promote and protect human rights, democracy, the rule of law or good governance; or to protect national security or other interests, often through the declaration of a state of emergency.

...

B. Legal status of targeted sanctions

89. The Special Rapporteur notes with regret that States have shown a preference in recent times for imposing sanctions instead of starting criminal cases, as such action is easier and faster, and standards of proof are nearly non-existent. As a result, perpetrators of international crimes face no criminal charge, while a group of people suffer economic and travel limitations and are publicly branded international criminals, in violation of the right to the presumption of innocence.”

59.  The Court of Justice of the European Union (CJEU) has developed substantive case-law concerning sanctions (or “restrictive measures”, as the CJEU refers to them) enacted by the Council of the European Union in the framework of its Common Foreign and Security Policy against various individuals and legal entities. When reviewing such measures, the CJEU has consistently held that, on the basis of fundamental rights forming an integral part of the European Union legal order, the persons concerned must be, inter alia, sufficiently informed of the grounds for decisions impacting them. This is to ensure that they can effectively defend their rights and make an informed decision on whether to pursue legal action, and to enable a thorough judicial review of the decision’s legality (see judgment of 18 July 2013 in Kadi, C‑584/10 P, C-593/10 P and C-595/10 P, EU:C:2013:518, paragraph 100) (hereinafter “Kadi II”). Furthermore, it has considered that the statement of reasons for the imposed sanctions should contain specific and concrete reasons why the competent authorities consider that the individual concerned must be subject to sanctions, and that the Courts of the European Union must verify whether the reasons relied on are sufficiently detailed and specific (ibid., paragraphs 116 and 118, with further references therein).

It has also held that the statement of reasons must, in principle, be notified to the persons concerned at the same time as the act (decision or measures) adversely affecting them. The grounds for sanctions cannot consist merely of a general, stereotypical formulation, and must indicate the actual and specific reasons why the Council considers that the relevant rules are applicable to the party concerned (see, for instance, judgment of the General Court of 12 December 2006 in Organisation des Modjahedines du peuple d’Iran v. Council of the European Union, T-228/02, ECLI:EU:T:2006:384, paragraphs 139 and 143, with further references therein). The mere paraphrasing of the terms of relevant legal provisions without in any way stating the actual and specific reasons for the application of sanctions is not sufficient (see judgment of the General Court of 5 December 2012 in Qualitest FZE v. Council of the European Union, T-421/11, ECLI:EU:T:2012:646, paragraphs 35-39).

60.  As regards the standard of judicial review, the CJEU held as follows in its Kadi II judgment:

“119. The effectiveness of the judicial review ... also requires that, as part of the review of the lawfulness of the grounds which are the basis of the decision to list or to maintain the listing of a given person ...the Courts of the European Union are to ensure that that decision, which affects that person individually ... is taken on a sufficiently solid factual basis (see, to that effect, Al-Aqsa v Council and Netherlands v Al-Aqsa, paragraph 68). That entails a verification of the factual allegations in the summary of reasons underpinning that decision ... with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, is substantiated.”

This approach has been consistently applied in a number of more recent cases examined by the General Court, which has stated that while the Council of the European Union has a degree of discretion to determine whether the legal criteria on which the restrictive measures are based are satisfied, the Courts of the European Union must ensure “the review, in principle the full review, of the lawfulness of all EU acts” (see, among other authorities, judgment of the General Court of 15 November 2023 in OT v. Council of the European Union, T-193/22, EU:T:2023:716, paragraph 121; judgment of the General Court of 19 June 2024 in Rotenberg v. Council of the European Union, T-738/22, ECLI:EU:T:2024:398, paragraph 50).

THE LAW

61.  The Court notes that the applicant company raised several complaints in its application, which was lodged prior to the conclusion of the domestic proceedings. Relying on Article 1 of Protocol No. 1 to the Convention, it complained of a lack of precision and foreseeability in the impugned decisions, the absence of grounds for the imposition of sanctions, the lack of a legitimate aim, and the disproportionate nature of the interference. It also complained, under Article 6, about the length of the domestic proceedings, and under Article 13, that it had no effective remedy in respect of its complaints.

62.  Notice of the application was given to the Government under all the above-mentioned Articles.

63.  In its observations dated 21 February 2022 – also submitted prior to the conclusion of the domestic proceedings – the applicant company asserted that the impugned decisions did not contain any information as to the specific actions imputed to it, on the basis of which the domestic authorities had decided to impose sanctions. It also claimed that there had been no grounds for the imposition of sanctions in the documents provided by the SBU to the domestic courts.

64.  In its additional observations dated 6 January 2025, which were submitted after the conclusion of the domestic proceedings, the applicant company alleged, inter alia, that when adopting decisions within the first set of proceedings, the domestic courts had failed to address some of its key arguments and to examine all aspects of the case. In particular, it argued that, despite its specific and pertinent arguments, the courts had refused to assess whether there had been sufficient and substantiated grounds justifying the imposition of sanctions. In addition, it claimed that the domestic courts had failed to examine whether the established procedure for enacting the first presidential decree had been followed. The applicant company relied in this regard on Article 6 of the Convention.

65.  The Court notes that the scope of a case “referred to” it in the exercise of the right of individual application is determined by the applicant’s complaint or “claim”. Allegations made after notice of the application has been given to the respondent Government can only be examined by the Court if they constitute an elaboration of the applicant’s original complaint (see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, §§ 108-09 and 120-22, 20 March 2018, and Ēcis v. Latvia, no. 12879/09, § 68, 10 January 2019).

66.  The Court considers, being the master of the characterisation to be given in law to the facts of the case (see Radomilja and Others, cited above, § 126, and Nicolae Virgiliu Tănase v. Romania [GC], no. 41720/13, § 83, 25 June 2019), that the allegations raised by the applicant company in its additional observations concerning the manner in which the domestic courts dealt with its arguments concerning the absence of grounds and lack of sufficient evidence for the imposition of sanctions within the first set of proceedings (see paragraph 63 above) are linked to its initial complaint. Accordingly, in so far as these observations constitute an elaboration of that complaint, they fall to be examined within the scope of its complaint under Article 1 of Protocol No. 1 to the Convention (see, for a similar approach, Navalnyy and Gunko v. Russia, no. 75186/12, § 34, 10 November 2020, and Bilyavska v. Ukraine, no. 84568/17, §§ 22-29, 27 March 2025).

67.  On the other hand, the Court notes that the applicant company’s complaint concerning the first presidential decree’s alleged non-compliance with the established internal procedure for its enactment (see paragraph 64 above) was not raised in its application to the Court (see paragraph 61 above). The Court therefore considers that these new submissions, relating to the procedure by which the sanctions were imposed, cannot be seen as an elaboration of the applicant company’s original complaints. Consequently, they fall outside the scope of the application, and the Court finds it inappropriate to address these matters in the context of the present case (see, for example, Svit Rozvag, TOV and Others v. Ukraine, nos. 13290/11 and 2 others, § 80, 27 June 2019).

68.  The applicant company complained that the sanctions imposed on it under the Sanctions Act had been unlawful and disproportionate, and that the domestic courts had failed to examine all aspects of the case. As noted above (see paragraph 66), these complaints fall to be examined under Article 1 of Protocol No. 1 to the Convention, which reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

69.  In their observations, the Government initially argued that the applicant company’s complaints were premature, as the domestic proceedings had not yet concluded. Subsequently, in their additional observations, they maintained that the applicant company had failed to exhaust domestic remedies. Referring to the applicant company’s withdrawal of its claims in the second and third sets of proceedings (see paragraphs 40‑41 above), the Government argued that the applicant company had failed to pursue the remedies in respect of all three proceedings, as all of them had been linked. The Government also noted that the withdrawals demonstrated a loss of victim status and suggested that the matter had been of marginal importance to the applicant company.

70.  The applicant company disagreed. With respect to the withdrawal of its claims in the second and third sets of proceedings (see paragraphs 40-41 above), the applicant company explained that it had done so essentially due to a loss of hope of obtaining effective protection of its rights at the domestic level in those proceedings. It stated, in particular, that the Grand Chamber of the Supreme Court, which had been due to examine its appeals in the second and third sets of proceedings, had had the same composition as the panel that had already dismissed its appeal in the first set of proceedings. It had therefore believed that the outcome of those proceedings would be the same and, in view of the already protracted length of the proceedings, had seen no reason to pursue them further.

(a)   The first presidential decree

71.  The Court reiterates that the purpose of Article 35 is to afford the Contracting States the opportunity of preventing or putting right the violations alleged against them before those allegations are submitted to it (see, for example, Mifsud v. France (dec.) [GC], no. 57220/00, § 15, ECHR 2002-VIII). This reflects the subsidiary character of the machinery of protection established by the Convention in relation to the national systems safeguarding human rights (see, among many other authorities, Communauté genevoise d’action syndicale (CGAS) v. Switzerland [GC], no. 21881/20, § 138, 27 November 2023). It is well-established in the Court’s case-law that the obligation to exhaust domestic remedies requires an applicant to make normal use of remedies which are available and sufficient in respect of his or her Convention grievances (see Pindo Mulla v. Spain [GC], no. 15541/20, § 93, 17 September 2024). The Court examines, in particular, whether the applicant did everything that could reasonably be expected in order to exhaust the available domestic remedies (see Merit v. Ukraine, no. 66561/01, § 58, 30 March 2004).

72.  In the present case, the complaints concerning the alleged unlawfulness and disproportionality of the imposed sanctions, as well as the limited scope of judicial review of the applicant company’s claim were expressly raised by the applicant company at the domestic level, in accordance with the applicable rules and procedures of domestic law (see paragraph 19 above). The Court is satisfied that, by doing so, the applicant company complied with its obligation to afford the domestic judicial authorities the opportunity to deal with the alleged violations of its rights that it has now brought before the Court.

73.  With regard to the Government’s objection to the effect that the outcome of the second and third sets of proceedings should affect the admissibility of the applicant company’s complaint relating to the first presidential decree, the Court notes the following. Despite their similar legal nature, those were separate proceedings relating to distinct presidential decrees, each applicable in a different time frame. According to the available information, the applicant company withdrew its claims in the second and third sets of proceedings only after the Grand Chamber of the Supreme Court had issued a final decision in the first set of proceedings. As the applicant company explained (see paragraph 70 above), this decision was prompted by the perceived lack of any prospect of success in the second and third sets of proceedings.

74.  In the Court’s view, these circumstances indicate that the applicant company’s withdrawal from the later proceedings could not retroactively affect its compliance with the rule of exhaustion of domestic remedies concerning the first presidential decree, which had already been fully litigated and the case finally decided by that time. Nor is there any indication that the applicant company showed any intention to abandon or waive its complaint concerning the first presidential decree. The Government’s objections relating to the first presidential decree must therefore be dismissed.

75.  The Court further notes that the applicant company’s complaint relating to the first presidential decree is neither manifestly ill-founded nor inadmissible on any other grounds listed in Article 35 of the Convention. It must therefore be declared admissible.

(b)   The second and third presidential decrees

76.  With regard to the part of the applicant company’s complaint relating to the second and third presidential decrees, the Court does not consider it necessary to decide on the Governments’ objections (see paragraph 69 above) as it is in any event manifestly ill-founded for the following reasons.

77.  The Court reiterates that the proceedings before it are adversarial in nature. It is therefore for the parties to substantiate their factual arguments by providing it with the necessary evidence. While the Court is responsible for establishing the facts, it is up to the parties to provide active assistance by supplying all relevant information. In this context, the conduct of the parties when evidence is being obtained has to be taken into account (see, mutatis mutandis, Ireland v. the United Kingdom, 18 January 1978, § 161, Series A no. 25). The Court further reiterates that, pursuant to Rule 44C of the Rules of Court, where a party fails to divulge relevant information of its own motion or otherwise fails to participate effectively in the proceedings, the Court may draw such inferences as it deems appropriate.

78.  The Court observes that the applicant company submitted two different explanations for the withdrawal of its claims in the second and third sets of proceedings. In the domestic proceedings, it indicated that it had essentially reached a reconciliation with the State authorities and did not want to litigate the matter further (see paragraph 40 above). To the Court, however, it asserted that it had withdrawn its claims because it had lost hope in the effectiveness of pursuing these cases domestically (see paragraph 70 above). The applicant company, which was represented by counsel throughout the proceedings, offered no explanation for this contradiction.

79.  In these circumstances, it is not for the Court to speculate as to the real reasons behind the applicant company’s decision to abandon its claims. Bearing in mind that the applicant company itself withdrew them, and in view of the irreconcilable nature of its explanations – which the Court is not in a position to resolve – the Court considers that the applicant company’s complaint, in so far as it concerns the second and third presidential decrees, cannot be considered sufficiently substantiated. It should therefore be declared inadmissible as manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention (see Ponomaryov and Others v. Bulgaria (dec.), no. 5335/05, 10 February 2009, and Lisnyy and Others v. Ukraine and Russia (dec.), nos. 5355/15 and two others, § 30, 5 July 2016).

(a)   The applicant company

80.  The applicant company submitted that the imposition of sanctions under the first presidential decree constituted an interference with its rights guaranteed by Article 1 of Protocol No. 1 to the Convention, as it had been prevented from using and disposing of its assets. The freezing of its bank accounts had made it impossible for the company to make non-cash payments to its contractors or to pay monetary prizes to its customers. Some of its business partners had had to suspend their distribution agreements, meaning they could no longer sell the applicant company’s lotteries. Moreover, significant damage had been done to its business reputation.

81.  The applicant company claimed that because of the absence of criteria for applying the sanctions and the legal procedures used, this interference had lacked a basis in domestic law. In addition, the impugned decisions did not contain any information as to the specific actions imputable to it which had formed the grounds for the application of sanctions. The lack of this information had made it impossible to ascertain the reasons for the interference.

82.  The applicant company also complained about the way in which the domestic courts had examined its claim. In particular, it asserted that, by limiting the scope of judicial review, the Cassation Administrative Court and the Grand Chamber of the Supreme Court had failed to verify whether the State authorities had had sufficient grounds for the imposition of sanctions and whether such grounds had been supported by any evidence. Moreover, the limitation of the scope of judicial review had not been based on any provision of domestic law. In its view, the discretionary powers of the President in matters of national security should neither have limited the judicial review exercised by the domestic courts nor exempted the courts from the obligation to verify the existence of grounds for the application of sanctions under the Sanctions Act.

83.  Lastly, the applicant company denied any affiliation with the Russian Federation and stated that the information contained in the classified documents provided by the SBU to the domestic courts (see paragraph 29 above) had been entirely speculative and lacked evidence. During the domestic proceedings, it had provided the courts with information showing its corporate structure and the identities of its shareholders, none of whom were nationals of, or registered in, the Russian Federation. Nonetheless, the Supreme Court had failed to reconcile the facts submitted by the company with the unsubstantiated allegations of the SBU. In its view, the impugned measures had not pursued a legitimate aim and had been disproportionate.

(b)   The Government

84.  The Government argued that the sanctions imposed on the applicant company constituted a measure of control over the use of property, and that such interference with its rights had been “in accordance with the law”, namely the Sanctions Act and the first presidential decree. These legal acts had been clear and foreseeable. Moreover, the sanctions had been limited in duration to one year.

85.  Referring to the Court’s findings in Borzykh v. Ukraine (dec.) (no. 11575/24, §§ 52 and 54, 19 November 2024), the Government stressed that the national authorities were generally better placed than the Court to understand and appreciate the specific societal problems faced in particular communities and contexts. During the relevant period, the competent State authorities had believed that the applicant company posed a threat to the national interests of Ukraine and had thus legitimately resorted to the temporary restrictive measures provided for by the Sanctions Act. In their view, such measures pursued the legitimate aim of “ensuring control over the property [belonging to a person] who [might] pose a potential threat to the national interests of Ukraine”. The impugned sanctions had been imposed on the applicant company in a very specific context, namely threats to the national security and territorial integrity of the State caused by the armed aggression of the Russian Federation.

86.  Furthermore, the Government noted that, during the domestic proceedings, the Cassation Administrative Court and the Grand Chamber of the Supreme Court had examined the documents on the basis of which the State authorities had imposed sanctions on the applicant company, indicating in their rulings that the decision to impose sanctions had been based on the information collected by the SBU. They reiterated that domestic judicial review in cases related to the Sanctions Act was limited, as the domestic courts could not reassess the existence and sufficiency of the grounds for imposing sanctions; they could only verify compliance by the relevant authorities (namely, the NSDCU and the President) with the limits of their discretion and the procedure for imposing sanctions. As the applicant company had never properly challenged the procedure by which the sanctions had been imposed on it, the domestic courts had focused exclusively on the issue of compliance with the relevant limits of discretion.

87.  Lastly, the Government submitted that the impugned measures had been proportionate, given the absence of significant negative consequences for the applicant company. In particular, despite the imposition of sanctions, it had continued its business activities.

(a)   General principles

88.  The freezing of assets falls to be analysed under the second paragraph of Article 1 of Protocol No. 1, which, among other things, allows States to control the use of property (see Bosphorus Hava Yolları Turizm ve Ticaret Anonim Şirketi v. Ireland [GC], no. 45036/98, §§ 141-42, ECHR 2005-VI, which concerned the detention of an aircraft carried out in pursuance of the United Nations sanctions regime and the implementing European regulations; Karahasanoğlu v. Turkey, nos. 21392/08 and 2 others, § 144, 16 March 2021; and Shorazova v. Malta, no. 51853/19, § 104, 3 March 2022, in the context of criminal proceedings with a view to keeping the assets available to meet a potential financial penalty).

89.  The principle of lawfulness also presupposes a certain quality of the applicable provisions of domestic law. The legal norms upon which the interference is based should be sufficiently accessible, precise and foreseeable in their application. In particular, a norm is “foreseeable” when it affords a measure of protection against arbitrary interferences by the public authorities. Any interference with the peaceful enjoyment of possessions must, therefore, be accompanied by procedural guarantees affording to the individual or entity concerned a reasonable opportunity of presenting their case to the responsible authorities for the purpose of effectively challenging the measures interfering with the rights guaranteed by that provision. In ascertaining whether that condition has been satisfied, a comprehensive view must be taken of the applicable judicial and administrative procedures (see Lekić v. Slovenia [GC], no. 36480/07, § 95, 11 December 2018, and the case‑law references therein).

(b)   Application of the general principles to the present case

90.  The parties did not dispute that the imposition of economic restrictions in the present case, including in the form of freezing of assets, constituted an “interference” with the applicant company’s “possessions”. The Court sees no reasons to hold otherwise.

91.  As to the remaining four restrictions imposed by the first presidential decree – the prevention of capital outflow, the suspension of financial obligations, the termination of permits and licences for currency transactions and other measures (see paragraph 15 above) – the Court observes that the applicant company did not explain whether each of these measures had any practical impact on its operations, nor in what manner they did so. Instead, its submissions focused almost exclusively on the freezing of its assets and its implications (see paragraph 80 above).

92.  In these circumstances, the Court cannot rule out that the four remaining restrictions imposed on the applicant company could, in principle, constitute an interference with its possessions. However, in view of the lack of pertinent information about their nature and impact on the applicant company, and having regard to its conclusions below (see paragraph 109), the Court does not consider it necessary to examine the four remaining restrictions separately (see, mutatis mutandis, Rustamkhanli v. Azerbaijan, no. 24460/16, § 38, 4 July 2024). It will thus confine its examination to the freezing of the applicant company’s assets.

93.  The Government and the applicant company diverged on whether the legal basis for the impugned measure, as applied in the applicant company’s case, met the “quality of law” requirement, particularly in terms of precision and foreseeability. The Court will address these questions in turn.

94.  It notes that the grounds for the application of the various sanctions laid down in section 3(1)(1) were expressed in broad terms and covered a wide range of alleged actions (see paragraph 50 above). This included not only activities whose scope was more or less clearly defined (such as alleged actions promoting terrorism), but also such abstract and even ambiguous formulas as actions “causing property losses” and those “creating obstacles to sustainable economic development”.

95.  In this regard, the Court gives due consideration to the general context in which the Sanctions Act was enacted (see Khlaifia and Others v. Italy [GC], no. 16483/12, § 185, 15 December 2016). In particular, at the time, the respondent State was facing unprecedented threats to its national security and territorial integrity (see paragraphs 5-7 above), which often transcended the standard paradigms of usual criminal activity or conventional armed conflict. These threats required a swift response from the Ukrainian authorities, which traditional criminal proceedings alone could not provide. The Sanctions Act, as emphasised in its Preamble (see paragraph 9 above), was specifically designed to address these urgent security needs.

96.  Given the above and considering that the provisions of the Sanctions Act were meant to cover various forms of activities deemed to pose a threat to the national security of the State, the Court is prepared to accept that it was therefore perhaps inevitable for those provisions to be worded in terms that were arguably not very precise and were rather general. Moreover, many laws are inevitably couched in terms which, to a greater or lesser extent, are vague and whose interpretation and application are questions of practice (see Ships Waste Oil Collector B.V. and Others v. the Netherlands [GC], nos. 2799/16 and 3 others, § 175, 1 April 2025).

97.  In this connection, the Court additionally observes that the Sanctions Act merely served as a general legal framework for the imposition of restrictions; its terms were subject to practical interpretation and application by the individual decisions of the NSDCU and the President. The Court must therefore examine whether the impugned decisions concerning the applicant company were sufficiently reasoned.

98.  The Court answers this question in the negative. None of the impugned decisions contained any individualised justifications. Instead, they mechanically reproduced all the grounds for applying the various restrictions provided for in the relevant section of the Sanctions Act (see paragraphs 14 and 50 above), without explaining how they specifically applied to the applicant company. In the Court’s view, while it could be acceptable in the specific circumstances for the impugned decisions not to include all the factual and legal details that led to the imposition of the sanctions, it was essential for the applicant company to have been able to ascertain the essence of the reasons for them and prepare its legal argumentation.

99.  It remains to be determined whether, despite the insufficient reasoning of the relevant decisions, the impugned interference was accompanied by procedural guarantees affording the applicant company a reasonable opportunity to present its case to the domestic courts for the purpose of effectively challenging the measures in question (see paragraph 89 above).

100.  The Court has previously analysed the scope of domestic judicial review of sanctions, albeit imposed under a different legal framework. In cases concerning the implementation of sanctions imposed by the United Nations Security Council Resolutions (see Nada v. Switzerland [GC], no. 10593/08, ECHR 2012, and Al-Dulimi and Montana Management Inc. v. Switzerland [GC], no. 5809/08, 21 June 2016), the Court held that although domestic courts were unable to rule on the merits or appropriateness of the sanctions – as that choice fell within the eminent role of the UN Security Council as the ultimate political decision-maker in such matters – the domestic authorities still had a duty beyond verifying that the applicants’ names actually appeared on the sanctions lists and that the assets concerned belonged to them. The courts of the respondent State had to exercise sufficient scrutiny in order to ensure that the listing was not arbitrary (see Al-Dulimi and Montana Management Inc., cited above, §§ 146-52).

101.  It should also be reiterated that even when national security is at stake, the concepts of lawfulness and the rule of law in a democratic society require that measures affecting fundamental human rights must be subject to some form of adversarial proceedings before an independent body competent to review the reasons for the decision. If there was no possibility of challenging effectively the executive’s assertion that national security was at stake, the State authorities would be able to encroach arbitrarily on rights protected by the Convention (see Šeks v. Croatia, no. 39325/20, § 64, 3 February 2022, with further references).

102.  The Court observes that there was no meaningful judicial assessment of the decisions to impose sanctions on the applicant company. The Supreme Court, in both its formations (that is, the Cassation Administrative Court and the Grand Chamber of the Supreme Court) limited its analysis to the sole issue of compliance of the NSDCU’s decision and the first presidential decree with the formal requirements of the Sanctions Act and did not address the substance of the SBU’s allegations against the applicant company.

103.  Noting that it could only exercise limited judicial review in such categories of cases, and that it was ultimately the President’s responsibility to assess the grounds for imposing sanctions, the Supreme Court held that it was not authorised to assess the SBU’s factual findings concerning the applicant company and declined to examine whether those findings provided genuine and sufficient grounds for its activities to be considered a threat to national security.

104.  As a result, the key legal issue in the present case – namely whether, despite not having Russian Federation owners in its corporate structure, the applicant company had in fact been controlled by entities of the Russian Federation and whether it had committed any acts that posed a threat to Ukraine’s national security – remained unaddressed.

105.  Furthermore, the domestic courts never seriously attempted to verify why, in parallel to defending the imposition of economic restrictions on the applicant company in judicial proceedings, the SBU sought to lift those restrictions after agreeing with the company’s arguments presented in its letter of 7 September 2016 (see paragraphs 34 and 46 above).

106.  The Court notes that, unlike the cases involving sanctions mandated by the UN Security Council Resolutions (see paragraph 100 above), the impugned measure in the present case was a purely domestic measure imposed by decisions of the Ukrainian authorities within their competence. In that sense, despite the exceptional context, its legal nature was no different from any other individual decree or administrative order regularly issued by the relevant authorities in the ordinary exercise of their powers.

107.  The Court further observes that there was nothing in the Ukrainian Constitution or any other provision of domestic law – understood according to the ordinary meaning of the language used therein – that explicitly prevented the Ukrainian courts from examining the basis of the allegations against the applicant company or assessing the credibility of the information provided by the SBU in support of those allegations. Moreover, the Supreme Court did not explain how such limited judicial review should be understood in the light of Article 124 of the Constitution, which provides that the domestic courts’ jurisdiction extends to all legal disputes without limitation. This also appeared to contradict the Supreme Court’s earlier case-law in similar cases where it examined the substance of the allegations against claimants subject to sanctions (see paragraphs 54-55 above).

108.  Therefore, despite the discretion afforded to the NSDCU and the President in matters of national security and defence, the judicial review conducted by the Supreme Court could not be regarded as a sufficient procedural guarantee against arbitrariness. This is because it did not involve any verification of whether the first presidential decree was based on a sufficiently solid factual foundation, or whether the factual allegations against the applicant company were substantiated (see also the approach of the CJEU in paragraph 60 above).

109.  Accordingly, the Court finds that the applicant company was denied a reasonable opportunity to effectively challenge the measures in question (see Artashes Antonyan v. Armenia, no. 24313/10, § 43, 22 October 2020, and Project-Trade d.o.o. v. Croatia, no. 1920/14, § 85, 19 November 2020). In the light of this finding, the Court concludes that the interference with the applicant company’s possessions by the first presidential decree, in the form of the freezing of its assets, was not accompanied by sufficient procedural guarantees against arbitrariness and was thus not lawful within the meaning of Article 1 of Protocol No. 1 (see Markus v. Latvia, no. 17483/10, § 74, 11 June 2020, and Svit Rozvag, TOV and Others, cited above, § 162).

110.  It is therefore unnecessary to examine whether the interference in question pursued a legitimate aim and was proportionate to that aim (see Iatridis v. Greece [GC], no. 31107/96, § 62, ECHR 1999‑II).

111.  There has, accordingly, been a violation of Article 1 of Protocol No. 1 to the Convention.

112.  The applicant company complained that it had not had an effective domestic remedy in respect of its complaint under Article 1 of Protocol No. 1 to the Convention. It relied on Article 13 of the Convention, which reads as follows:

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

113.  The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

114.  The applicant company submitted that there had been no effective remedy for the infringement of its property rights owing to the domestic courts’ failure to rule on its administrative claims within a reasonable time.

115.  The Government contested that argument, considering that there was no issue under Article 13. They asserted that the applicant company had had at its disposal an effective remedy to protect its rights guaranteed by Article 1 of Protocol No. 1, as illustrated by the relevant case-law of the Supreme Court in similar cases (see paragraphs 54-57 above). They further contended that, despite the limited scope of judicial review of the applicant company’s claim, its arguments had been examined properly and in a timely manner. They attributed the overall duration of the domestic proceedings primarily to the complexity of the subject matter and maintained that there had been no hesitation or inactivity on the part of the domestic courts in dealing with the applicant company’s claim.

116.  The Court reiterates that Article 13 of the Convention guarantees the availability, at the national level, of a remedy to enforce the substance of Convention rights and freedoms, in whatever form they might happen to be secured in the domestic legal order. The effect of Article 13 is thus to require the provision of a domestic remedy to deal with the substance of an “arguable complaint” under the Convention and to grant appropriate relief, although Contracting States are afforded some discretion as to the manner in which they conform to their Convention obligations under this provision. The scope of the obligation under Article 13 varies depending on the nature of the applicant’s complaint under the Convention. Nevertheless, the remedy required by Article 13 must be “effective” in practice as well as in law; in particular, its exercise must not be unjustifiably hindered by the acts or omissions of the authorities of the respondent State (see, among other authorities, Aksoy v. Turkey, 18 December 1996, § 95, Reports of Judgments and Decisions 1996-VI, and Kudła v. Poland [GC], no. 30210/96, § 157, ECHR 2000‑XI).

117.  The Court refers to its earlier finding (see paragraph 109 above) that the interference with the applicant company’s possessions was not accompanied by sufficient procedural guarantees against arbitrariness and was thus not lawful within the meaning of Article 1 of Protocol No. 1. It is also relevant to note that, although the applicant company initiated the first set of administrative proceedings in March 2016, no court assessment appears to have been made as to the legitimacy and proportionality of the sanctions imposed on it until at least the decision of the Cassation Administrative Court in November 2022 – that is, more than six years later (compare Shorazova, cited above, § 117; see also McFarlane v. Ireland [GC], no. 31333/06, § 123, 10 September 2010).

118.  The Court further observes that, in seeking the lifting of the sanctions, the applicant company did not confine itself to challenging the impugned decisions solely through administrative proceedings. It also requested an official investigation by the SBU into the allegations against it, cooperated with law enforcement authorities and eventually obtained a formal decision from the SBU confirming that it had not been involved in the financing of terrorism (see paragraphs 42-44 above). Additionally, the applicant company asked the SBU to re-examine its corporate structure and initiate the lifting of the sanctions by the NSDCU. Although the SBU examined the information provided by the applicant company and submitted its recommendations to the NSDCU in support of lifting the sanctions (see paragraphs 45-46 above), these efforts appear to have had no effect.

119.  The foregoing considerations are sufficient for the Court to conclude that, in the particular circumstances of the present case, the applicant company did not, in practice, have an opportunity to obtain effective remedies for its complaints.

120.  In this connection, the Court considers it necessary to note that the scope of judicial review exercised by the Supreme Court under the Sanctions Act in similar cases (see paragraphs 54-55 above) indicates that, provided it is available without excessive delay, such a remedy may, in principle, satisfy the requirements of Article 13. Accordingly, the above conclusion relates solely to the present case and does not call into question the effectiveness of Supreme Court proceedings in similar cases (see, for example, Oreb v. Croatia, no. 9951/06, § 39, 23 October 2008, and Polyakh and Others v. Ukraine, nos. 58812/15 and 4 others, §§ 213-14, 17 October 2019).

121.  The Court concludes, therefore, that there has been a violation of Article 13 of the Convention.

122.  The applicant company additionally complained that the first and second sets of administrative proceedings had not complied with the “reasonable length” requirement under Article 6 § 1 of the Convention, which reads as follows:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing within a reasonable time by [a] tribunal ...”

123.  Having regard to the facts of the case, the parties’ submissions and the conclusions reached under Article 1 of Protocol No. 1 to the Convention and Article 13 of the Convention (see paragraphs and 120 above), the Court is of the view that it has examined the main legal questions raised by the application. It therefore concludes that there is no need to give a separate ruling on the admissibility and merits of this complaint (see, in particular, Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 156, ECHR 2014).

124.  Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

125.  The applicant company claimed 1,288,835,360.32 Ukrainian hryvnias (UAH) in respect of pecuniary damage, including UAH 1,271,454,176.02 for loss of profit, which it attributed to the freezing of its bank accounts and reputational losses. In that connection, the applicant company submitted financial statements for two periods: the nine months immediately preceding the imposition of the sanctions and the period from October 2015 to May 2017, when the sanctions were already in effect. Based on its financial performance during the first nine months of 2015, the applicant company argued that, had the sanctions not been imposed, its net income during October 2015 to May 2017 would have remained at the same level and amounted to UAH 1,973,072,176.02 (equivalent to approximately 67,913,000 euros (EUR)) rather than UAH 701,618,000.00 (equivalent to approximately EUR 24,150,000) actually recorded.

126.  The applicant company further claimed UAH 17,381,184.30 (equivalent to approximately EUR 598,300) in compensation for a fine imposed following tax inspections for late payment of taxes, together with accrued interest, which it asserted had been caused by the freezing of its bank accounts.

127.  Lastly, the applicant company claimed EUR 5,000,000.00 in respect of non-pecuniary damage.

128.  The Government contested those claims. As to the clam in respect of pecuniary damage, they argued that there was no causal link between the alleged violations and the amount claimed. They also submitted that the imposition of sanctions on the applicant company had not resulted in the suspension of its business activities and that, despite the sanctions, it had continued to operate a number of lotteries. The freezing of its bank accounts had also been taken into consideration by the domestic authorities when examining its ability to meet its tax obligations. As to the claim in respect of non-pecuniary damage, the Government argued that the amount claimed was exorbitant.

129.  The Court’s case-law establishes that there must be a clear causal connection between the damage claimed by the applicant and the violation of the Convention and that this may, in the appropriate case, include compensation in respect of loss of earnings (see, among other authorities, Stretch v. the United Kingdom, no. 44277/98, § 47, 24 June 2003). In particular, where a loss of profit is claimed, it must be established conclusively and must not be based on mere conjecture or probability (see Centro Europa 7 S.r.l. and Di Stefano v. Italy [GC], no. 38433/09, § 219, ECHR 2012). Proof of pecuniary damage, the amount claimed in respect thereof and the causal link between the damage and the violations found, must in principle be adduced by the applicant (see G.I.E.M. S.r.l. and Others v. Italy (just satisfaction) [GC], nos. 1828/06 and 2 others, § 39, 12 July 2023). Also, the Court enjoys a certain discretion in the exercise of the power conferred by Article 41, as is borne out by the adjective “just” and the phrase “if necessary” in its text (see Guzzardi v. Italy, 6 November 1980, § 114, Series A no. 39).

130.  With regard to the claim in respect of pecuniary damage, the Court recalls that the violations found in the present case only concerned the initial freezing of the applicant company’s bank accounts on the basis of the first presidential decree rather than the whole period during which they had remained frozen (see Apostolovi v. Bulgaria, no. 32644/09, § 118, 7 November 2019). Its complaint regarding the second and third presidential decrees was declared inadmissible (see paragraph 79 above). The breach was also purely procedural in character as it was based exclusively on the absence of an opportunity to effectively challenge the freezing of the applicant company’s bank accounts and the lack of remedies in respect of its complaint (see paragraphs 109 and 119 above). In this connection, the Court cannot speculate as to what the eventual result of the respective proceedings might have been if the applicant company had been able to challenge the impugned measures effectively in proceedings that complied with the requirements of the State’s procedural obligations under Article 1 of Protocol No. 1 to the Convention (see Capital Bank AD v. Bulgaria, no. 49429/99, § 144, ECHR 2005-XII (extracts); Project-Trade d.o.o., cited above, § 110; Credit Europe Leasing Ifn S.A. v. Romania (just satisfaction), no. 38072/11, § 18, 21 July 2020).

131.  Moreover, the applicant company was not divested of the funds deposited on its bank accounts. During the period in question, it did not suspend its commercial activities and continued to earn revenue in cash (see paragraphs 27 and 125 above). While its financial performance, as reflected in the relevant financial statements (see paragraph 125 above), had indeed slowed down compared to the nine-month period preceding the sanctions, the applicant company did not submit any documents, such as, for example, an independent expert assessment, in support of its allegation that the decline in revenue had been solely or to a large extent attributable to the impugned measures (compare Avendi OOD v. Bulgaria (just satisfaction), no. 48786/09, § 33, 14 February 2023). Nor did it provide any explanation as to why such supporting documents could not be submitted.

132.  As to the amounts claimed by the applicant company for the fine imposed due to its failure to pay taxes on time and the associated interest, the Court observes that the present application does not concern the tax inspections carried out by the domestic authorities or the lawfulness of the tax fine imposed on the applicant company as a result of those inspections (see Democracy and Human Rights Resource Centre and Mustafayev v. Azerbaijan, nos. 74288/14 and 64568/16, § 120, 14 October 2021). Moreover, the applicant company failed to demonstrate that reimbursement of the impugned amounts was not available under domestic law, or to substantiate that the freezing of its bank accounts was the sole or primary reason for its failure to pay taxes on time.

133.  Accordingly, the Court does not discern any causal link between the violations found and the alleged pecuniary damage. It follows that the applicant company’s claim under this head must be rejected.

134.  Having regard to the circumstances of the case, the Court also considers that the finding of violations of the applicant company’s Convention rights constitutes sufficient just satisfaction for any non‑pecuniary damage that may have been sustained by it. It therefore makes no award under this head.

135.  The applicant company made no claim under this head. Accordingly, the Court makes no award in respect of costs and expenses.

FOR THESE REASONS, THE COURT

Done in English, and notified in writing on 16 October 2025, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Victor Soloveytchik Kateřina Šimáčková
 Registrar President

In accordance with Article 45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court, the separate opinion of Judge Serghides is annexed to this judgment.

PARTLY DISSENTING OPINION
OF JUDGE SERGHIDES

1.  As indicated in its introduction, the judgment concerns economic restrictions imposed on the applicant company between 2015 and 2018 under the Sanctions Act and its unsuccessful attempts to challenge these measures. The applicant company relied on Article 1 of Protocol No. 1 to the Convention, as well as Articles 6 and 13 of the Constitution.

2.  I voted in favour of points 1-3 but against points 4-6 of the operative provisions.

3.  As to paragraphs 122-123 of the judgment and the corresponding point 4 of the operative provisions holding that there is no need to examine the admissibility and merits of the complaint under Article 6 § 1 of the Convention, I regrettably disagree. Regarding such practice of distinguishing between main and secondary legal questions, with which I disagree, I refer, inter alia, to my partly dissenting opinion in Korniyets and Others v. Ukraine (no.  2599/16 and 2 others, 10 July 2025, paragraphs 4-9 of the opinion).

4.  Finally, I respectfully disagree with paragraph 134 of the judgment and corresponding point 5 of the operative provisions holding that the finding of violations constitutes in itself sufficient just satisfaction for any non‑pecuniary damage sustained by the applicant company. I refer, inter alia, to my partly dissenting opinion in L.F. and Others v. Italy (no. 52854/18, 6 May 2025, paragraph 12 of the opinion) where I explain my disagreement with such a practice.

[1]  See European Council, EU sanctions against Russia, available at: https://www.consilium.europa.eu/en/policies/sanctions-against-russia/, assessed on 21 March 2025.

[2]  See State Sanctions Registry, https://drs.nsdc.gov.ua/, assessed on 21 March 2025. 

[3] Some of these armed groups were described in Ukraine and the Netherlands v. Russia, cited above, §§ 134-38.

[4] Case no. 800/162/16

[5] Case no. 800/573/16

[6] Case no. 800/501/17

[7] The “DPR” and “LPR” are labelled by the Ukrainian Parliament as terrorist organisations (see Grubnyk v. Ukraine, no. 58444/15, §10, 17 September 2020).