EU General Court Rejects Russian Wealth Fund's Challenge to Sanctions on the Fund
The EU General Court on May 15 rejected the Russian Direct Investment Fund's (RDIF's) challenge to the bloc's prohibition on investing in projects financed by the fund.
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RDIF argued there was a lack of a "sufficiently solid" factual basis for imposing the sanctions. The fund said that because it's managed by JSC Management Co., which is not an "instrument of the Russian State," it can't be found to serve the state's interests. The court said the fund's management structure is irrelevant "for the purpose of assessing whether it is actually controlled by the Russian Federation."
The fund "provides direct investments in that State in partnership with other investment funds and private undertakings," making it "an archetypal vehicle for strategic investment in the Russian Federation, attracting financing from international investors," the court said.
The RDIF also argued that the European Council "failed to observe" the fund's rights to defense and "effective judicial protection." The court said because the fund is an "important channel for foreign investment" in Russia, "by virtue of being a Russian sovereign wealth fund," the council "was under no obligation to disclose to it specific items of evidence upon which that institution relied to adopt the contested acts."
The court also dismissed the RDIF's claims that the council imposed a "disproportionate restriction of the applicant's freedom to conduct a business" and that the restriction should be annulled because the fund didn't have the right to directly challenge the law under which the sanctions were made.