VTB and Sberbank will try to obtain justice in the European Court

VTB and Sberbank intend to consider EU sanctions to be illegal. Both banks appealed to the European Court on this issue

In particular, VTB asks the Court to declare invalid and annul the decisions of the European Council of 31 July 2014 and 8 September 2014, which refer to the sanctions against Russian banks. The bank refers to Article 263 of the Treaty on the Functioning of the EU, which states that the Court of the European Union monitors the lawfulness of legislative acts of the EU Council, as well as the validity of acts of bodies or agencies of the Union intended to produce legal effects in relation to third parties.

As noted in the statement of VTB, the EU Council was unable to provide a sufficient and adequate rationale for its decisions on July 31 and September 8, which does not give a chance to the banks against which sanctions have been exposed to effectively defend themselves in court, and thus violates their rights. It was indicated in the European criteria for the sanctions against banks that the sanctions list includes those financial institutions that are more than 50% owned and managed by the government, but the Russian government does not control VTB.

A similar argument appears from Sberbank. In a statement of the credit institution sent to the European Court, it is mentioned that the EU Council exceeded its powers by including Sberbank on the sanctions list, as the latter does not comply with the sanctions criteria specified in the decisions of the European Council.

VTB also draws attention to the fact that restricting access of Russian banks to the international capital markets violates several articles of the General Agreement on Trade in Services, which refer to ensuring equal access to markets, Tass reports.

As stated in our interview with the Deputy Chairman of the Duma Committee on Financial Markets, Anatoly Aksakov, if Europeans are civilized citizens of their countries, they must comply with the decisions of the European Court: "Moreover, they always teach us to comply with the legal space, as well as with the judgments of impartial courts. Therefore, I hope they will carry out the court's decision," said the deputy. "If the court decision would be "to consider the sanctions illegal", it would be right, because now the principles of the WTO and all other international treaties are being violated. Blocking the cards of some banks, in my opinion, is also a flagrant violation of international law. These banks should demand compensation for the damage they have suffered as a result of misconduct," Anatoly Aksakov concluded.

The leading researcher at the Institute of Applied Economic Research of the Russian Presidential Academy of National Economics and Public Administration, Alexander Abramov, agrees with him: "First of all, these banks are, of course, interested in the ability to finance in Europe, because the closure of European markets, of course, is a very painful blow to their interests. Also, there are signals to the US investors not to invest in these banks and they do not invest. That caused a dramatic reduction in the capitalization of Sberbank and VTB in the last year."

As for the prospects of a positive decision by the European Court, the expert is sure that it will be an opportunity for the involvement of European and American investors: If the banks achieve their goal, it would be some well-worn path of struggle with the European sanctions for other Russian companies," Alexander Abramov said.