CL-2022-000456 - [2025] EWHC 1938 (Comm)

The Russian invasion of Ukraine commenced on 24 February 2022. Sanctions were imposed by a number of countries, including the UK and the EU. So far as concerns EU sanctions, Mr Melnichenko became designated as someone listed in Annex I to Regulation 269 on 9 March 2022. The text under the heading “Reasons” in Annex I originally read as follows:

“Andrey Igorevich MELNICHENKO is a Russian industrialist owning major fertiliser producer EuroChem Group and coal company SUEK. A. Melnichenko belongs to the most influential circle of Russian businesspeople with close connections to the Russian Government. He is therefore involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine.

On 24 February 2022, in the aftermath of the initial stages of Russian aggression against Ukraine, Andrey Igorevich MELNICHENKO, along with other 36 businesspeople, met with President Vladimir Putin and other members of the Russian government to discuss the impact of the course of action in the wake of Western sanctions. The fact that he was invited to attend this meeting shows that he is a member of the closest circle of Vladimir Putin and that he is supporting or implementing actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, as well as stability and security in Ukraine. It also shows that he is one of the leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of Russia, which is responsible for annexation of Crimea and destabilisation of Ukraine.”

Mr Melnichenko remains listed in Annex I, but the text under “Reasons” has changed. As of 15 March 2025, it reads as follows:

“Andrey Melnichenko is a Russian industrialist who continues to control major fertiliser producer EuroChem Group and coal company SUEK. On 9 March 2022, Melnichenko transferred his interests in SUEK and EuroChem Group to his spouse, Aleksandra Melnichenko. He continues to benefit from the wealth he transferred to his wife. His wealth has increased very considerably in recent years.

Andrey Melnichenko belongs to the most influential circle of Russian businesspersons with close connections to the Russian government, as is evident from his involvement with the Russian Union of Industrialists and Entrepreneurs, where he holds the position of member of the Bureau of the Board and is the Chairman of the Committee on Climate Policy and Carbon Regulation. On 24 February 2022, in the aftermath of the initial stages of Russia’s war of aggression against Ukraine, Andrey Melnichenko, along with 36 other businesspersons, met with the President of the Russian Federation, Vladimir Putin, and other members of the Russian government to discuss the impact of the course of action in the wake of Western sanctions, thus exemplifying his importance as a leading businessperson in Russia. Moreover, he was among the leading Russian businesspersons who participated in the congress of the Russian Union of Industrialists and Entrepreneurs in March 2023, where the President of the Russian Federation, Vladimir Putin, gave a speech and urged billionaires to put ‘patriotism before profit’. In April 2024, Melnichenko also participated in the congress of the Russian Union of Industrialists and Entrepreneurs, where the President of the Russian Federation, Vladimir Putin, gave a speech, discussing the cooperation between the Russian state and leading companies of the country. Those elements show that he is a leading businessperson as well as a businessperson involved in economic sectors providing a substantial source of revenue to the Government of Russia, which is responsible for the annexation of Crimea and the destabilisation of Ukraine.”

His wife, Aleksandra Melnichenko, was designated on 3 June 2022. In her case, the text under “Reasons” in the relevant entry in Annex I reads as follows:

“Aleksandra Melnichenko is the wife of Andrey Melnichenko, a Russian industrialist who transferred his effective ownership and benefit of the major fertiliser producer EuroChem Group and the coal company SUEK to her on 9 March 2022.

Aleksandra Melnichenko takes advantage of the fortune and benefits from the wealth of her husband. In March 2022, Aleksandra Melnichenko replaced her husband as the beneficial owner of Firstline Trust, managed by Linetrust PTC Ltd, a company which represents the ultimate owner of EuroChem Group.

Therefore, she is an immediate family member benefitting from her husband Andrey Melnichenko and linked to him by common financial interests.”

On 15 March 2022, Mr Melnichenko was designated under UK sanctions regulations; and, later, he was also made subject to US sanctions. However, because payment under the Bonds in this case would not involve any acts in the UK/USA, nor any UK/US companies or persons, it is only the EU sanctions that are directly relevant – primarily Regulation 269, but potentially also Regulation 833.

It is important to note that the reasons given when a person is added to the list at Annex I have no legislative effect. It is procedurally necessary for the European Council to give reasons, when designating someone. However, the only operative part of the designation is the inclusion or maintenance of a person’s name on the list. Thus, the fact that (for example) the reasons given in relation to Mrs Melnichenko describe her as the beneficial owner of the Firstline Trust is not a legal determination that this is so. It does not mean that the trust assets (including both the Claimants and all their individual assets) must be frozen. All questions of ownership and control, for the purposes of Article 2, remain to be established. This is clear from the decision of the General Court in EuroChem v Council T-1111/23 (EU:T:2024:751), at [56]-[57], and was common ground before me.