Rosneft Hopes Iran Rulings Will Help it Beat EU Sanctions

EghtesadOnline: Russian oil major Rosneft hopes to benefit from European court rulings that have allowed some Iranian banks to escape from European Union sanctions.

News ID: ۷۴۰۷۶۱

05 April 2017

Russia's largest oil firm has been subject to sanctions since 2014, following Russia's annexation of Ukraine's Crimea region. Chief Executive Igor Sechin, a close ally of Russian President Vladimir Putin, is himself under sanctions, Reuters reported.

Sanctions complicate fund-raising for the state-run Rosneft and have prevented western companies from helping it develop deepwater, shale and Arctic oil deposits, including a large venture with Exxon Mobil.

Rosneft is attempting to annul EU sanctions in the European General Court, following a ruling by the European Court of Justice that the matter can be heard in Brussels, according to Financial Tribune.

Rosneft is challenging the legality of sanctions, saying the General Court set a precedent when it annulled some EU sanctions against Iranian banks. The decision was later confirmed by the European Court of Justice.

Rosneft said the Iranian banks had successfully challenged sanctions intended to curb Iran's nuclear program because there was no evidence of wrongdoing by the banks.

The General Court had recognized that the banks were not involved in Tehran's nuclear activities, Rosneft said in legal arguments.

Rosneft is hoping to benefit from a similar attitude to sanctions imposed over Ukraine. The oil firm said it had "not committed any illegal actions in any jurisdiction, including Ukraine, and has nothing to do with the Ukrainian crisis".

In 2014, the European Court of Justice struck down an EU decision to freeze the assets of Iran's central bank, a measure put in place to prevent Iran developing nuclear weapons.

Last year, Iran's Bank Mellat also won a case that its assets should not have been frozen. It argued that it was not linked to Iran's nuclear program.

The EU council said it could not comment on the case in the General Court as it was still ongoing. The timing of its ruling was not immediately known.

Sarosh Zaiwalla, a lawyer who represented Bank Mellat in its case against the EU, said there were parallels with Rosneft's position.

"The EU has not been able so far to produce any evidence that Rosneft ... was involved in or supported in any way the conflict in Ukraine," he said.

"In 2016, an EU court ruled that EU sanctions on Bank Mellat were imposed illegally because of lack of evidence of any involvement by Mellat in Iran’s nuclear program," Zaiwalla said.