Russian billionaire loses bid to remove name from Canada's sanction list

Globe and Mail

15 hours ago

A Russian billionaire has lost a legal bid to remove his name from the list of individuals and companies targeted by Canadian sanctions after Moscow's 2022 assault on Ukraine began.
Andrey Melnichenko and his wife, Aleksandra, were hit with Canadian sanctions in 2023. He first applied directly to then-foreign-affairs-minister Mélanie Joly for reconsideration, and after being turned down, he filed a request for judicial review in 2024.
In his legal action, Mr. Melnichenko said he was advised by the Department of Global Affairs that he was listed because 'there were reasonable grounds to believe he was an associate of President Putin or the government of Russia.'
Among the reasons given by the department were his role as former owner of fertilizer producer EuroChem and Siberian Coal Energy Company (SUEK), that he was a board member of the Russian Union of Industrialists and Entrepreneurs (RSPP), and that he attended a meeting with Russian President Vladimir Putin and members of the RSPP after the start of the 2022 attack on Ukraine.
Mr. Melnichenko, who said he hasn't lived in Russia in more than a decade and has resided in Switzerland for more than 15 years with his family, alleged that Global Affairs has ignored evidence he presented to it to dispute its characterization of him.
He argued he built his wealth without the help of the Russian state and 'as such does not meet the definition of 'oligarch.'' Mr. Melnichenko said he has not been an owner of EuroChem or SUEK since 2006. He said he has no personal relationship with Mr. Putin or the government of Russia 'and does not belong to the inner circle of President Putin.'
Federal Court Judge Catherine Kane on Thursday dismissed Mr. Melnichenko's application, saying Ms. Joly did not err when she added his name to the sanction list 'based on being satisfied that there were reasonable grounds to believe that he is an associate of senior officials of the Russian regime.'
Canada, like many other Western countries, applied sanctions to hundreds of individuals and companies in Russia and close ally Belarus over Moscow's February, 2022, attack on Ukraine – which continues to this day.
Mr. Melnichenko and his wife were among a diverse group of more than 100 targeted by Canadian sanctions in 2023. Ottawa said at the time the group comprised 'parliamentarians and officials, their family members, the oligarchs, and the businesses that fund them,' all of whom continued to do Mr. Putin's bidding.
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Mr. Melnichenko's wife was subsequently removed from Canada's sanctions list. As The Globe and Mail reported in 2024, the fact she was a Serbian citizen with a Serbian passport played a role in her removal.
Justice Kane said the foreign minister did not need to determine that Mr. Melnichenko was close to Mr. Putin to classify him as an associate of the Russian President.
'Evidence that he is not part of the inner circle or not in a position of influence does not detract from or contradict the Minister's finding that he is an 'associate.''
Justice Kane said the RSPP, the business lobby group Mr. Melnichenko associated with, and his presence at two of its meetings with Mr. Putin since 2022 were vital evidence.
'Excerpts of the transcript of the February 2022 meeting reveals that the meeting focused on the invasion, and President Putin addressed the attendees as 'colleagues' and 'friends', commended their role in preparing for sanctions, and urged their continued support,' she noted. 'While this does not confirm that Mr. Melnichenko regarded President Putin in the same way, it remains evidence relevant to and supporting the Minister's view that he is an 'associate.''
Justice Kane added: 'The second meeting, on March 16, 2023, was President Putin's first in-person address to Russia's business elite since the invasion. The evidence before the Minister described the meeting as President Putin's encouragement of Russian billionaires to prioritize national interests over profit and help stabilize the economy in response to Western sanctions. Some RSPP members chose not to attend the March 2023 meeting or had left the organization; however, Mr. Melnichenko did attend.'
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A memorandum submitted by Global Affairs during this legal action noted that Mr. Melnichenko remains sanctioned by Canada's allies, including the United States, Britain, European Union, Switzerland, Japan, Australia and New Zealand.
William Pellerin, a partner with McMillan LLP's international trade group, said petitioning to be removed from Western sanctions lists is 'part of the modus operandi of the various oligarchs and sanctioned individuals.'
These targeted individuals have business interests around the world. Winning removal from a sanction list in a country such as Canada could serve as a precedent to help them succeed in delistings in other jurisdictions that matter more to them, Mr. Pellerin said.
He noted that Russian oil and gas magnate Igor Makarov earlier failed to secure removal from Canada's sanctions list. The inability of two Russian billionaires to obtain delisting in Canada could discourage further efforts, Mr. Pellerin said.
Being placed on Canada's Russia-related sanctions list means any assets of the named person in Canada are frozen. People in Canada and Canadians outside of this country are prohibited from providing financial services to those under sanction, or entering into or facilitating transactions with them.
Those sanctioned in Canada might also face the prospect of the federal government seizing and selling off their assets with the proceeds donated to Ukraine, as Ottawa has proposed doing. People sanctioned are also banned from entering Canada.
Mr. Melnichenko's counsel in Canada did not immediately return a request for comment.
As of Thursday, Mr. Melnichenko sat at No. 132 on Forbes's Real-time Billionaires list with an estimated net worth of US$17.6-billion. Italian authorities seized his superyacht in 2022 as part of EU sanctions.