June 14, 2021

DC federal court denies Russian oligarch’s request to dismiss sanctions against him

On June 13, 2021, the US District Court for the District of Columbia denied a request by Oleg Deripaska, a Russian businessman with ties to the Kremlin, to dismiss US sanctions imposed against him – sanctions that were implemented in response to Russia’s 2014 annexation of the Crimean Peninsula from the Ukraine.  Shortly after the Department of the Treasury’s Office of Foreign Assets Control denied his delisting petition, Deripaska filed a complaint in 2019 in DC’s district court to challenge the designations that were imposed under Executive Orders 13661 and 13662, “Blocking Property of Additional Persons Contributing to the Situation in Ukraine,” and his identification in the Section 241 Report, a report for Congress that was issued pursuant to section 241 of the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA) that listed senior foreign political figures and oligarchs in the Russian Federation.  In the complaint, Deripaska alleged that the designations were unlawful, were arbitrary and capricious, and violated his Fifth Amendment rights.

The US government filed a “Motion to Dismiss or, in the Alternative, for Summary Judgment” just a month after Deripaska filed his Second Amended Complaint.  Deripaska responded by filing a Cross-Motion for Summary Judgment – a motion that the court denied after finding insufficient evidence to support its claims.  The court, however, granted the defendants’ Motion to Dismiss.

In January of 2018, Deripaska was listed as a Russian oligarch in the Section 241 Report.  At the time, OFAC emphasized that it was not a sanctions list and should not be interpreted to impose sanctions; however, a few months later in April 2018, OFAC designated Deripaska for acting as a senior official of the Government of the Russian Federation pursuant to EO 13661 and EO 13662.  OFAC also simultaneously designated several of Deripaska’s entities, including En+ Group PLC, Gaz Group, JSC Eurosibenergo, and United Company Rusal PLC, for their association with Deripaska.

Order | Memorandum Opinion