Key Aspects:

• The EU Council imposed sanctions on Russian businessman Dmitry Pumpyanskiy on 9 March 2022, due to his roles at TMK and Sinara Group and his ties to Russian state enterprises that allegedly supported the government responsible for the annexation of Crimea and destabilization of Ukraine. 
• Pumpyanskiy and his wife, Galina, appealed these sanctions, arguing errors in the EU's assessment and violations of their rights, leading to a partial annulment of the extensions but not the initial sanctions. 
• The court acknowledged Pumpyanskiy's departure from senior positions at his companies, questioning the basis for classifying him as a leading businessperson under the sanctions criteria.

The Initial Imposition of Sanctions

On 9 March 2022, the EU Council imposed restrictive measures against Russian businessman Dmitry Pumpyanskiy (a.k.a. Dmitry Aleksandrovich Pumpyanskiy). The justification was that Dmitry Pumpyanskiy, as Chairperson of PAO Trubnaya Metallurgicheskaya Kompaniya (a.k.a. Pipe Metallurgical Company, TMK) and President and Board Member of Group Sinara, supported and benefited from cooperation with Russian authorities and state-owned enterprises like Russian Railways, Gazprom, and Rosneft. These sectors provided substantial revenue to the Russian government, which was responsible for the annexation of Crimea and the destabilization of Ukraine.

On 24 February 2022, after the onset of Russian aggression against Ukraine, Pumpyanskiy, along with 36 other businesspeople, met with Russia’s President Vladimir Putin to discuss the impact of Western sanctions. According to the EU authorities, his presence at this meeting indicated his close ties to Putin and his support for actions undermining Ukraine's territorial integrity and sovereignty.

Sanctions were also imposed on Dmitry Pumpyanskiy's wife, Galina Pumpyanskaya (a.k.a. Galina Evgenyevna Pumpyanskaya).

Background Information

At the time of the imposition of sanctions in March 2022, Pumpyanskiy controlled 90% of the shares of TMK and was a Member of its Board of Directors. He was also president of the Sinara Group, a diversified holding company investing in mechanical engineering, development, agriculture, tourism, and recreation. The financial direction of the group is represented by Sinara Bank (formerly SKB-Bank).

Immediately after the sanctions were imposed, on 10 March 2022, Pumpyanskiy left senior positions at TMK and the Sinara Group. According to media reports, the shares of both companies owned by the entrepreneur were transferred to management.

First Appeal against EU Sanctions

In September 2023, Pumpyanskiy made an unsuccessful attempt to annul the EU decision of 9 March 2022, regarding his inclusion in the sanctions lists. He failed to challenge the inclusion in the blacklist at that time, with the court highlighting the involvement of Pumpyanskiy's business in sectors of the Russian economy that are a "substantial source of revenue" for the state despite the fact that Pumpyanskiy himself has not played a direct role in military offensive in Ukraine.

Second Appeal against EU Sanctions

The couple later appealed to the EU Court again, demanding exclusion from the sanctions list. They presented four arguments in support of their claims, including:

• The EU Council made a mistake when including applicants in the sanctions list (“an error of assessment”).
• an infringement of the principle of proportionality and of fundamental rights.

On 26 June 2024, the EU General Court decided to annul the authorities' decisions to extend sanctions against Pumpyanskaya from 14 September 2022, 13 March 2023, and 1 September 2023. The court stated that the Council made an error of assessment in finding that Dmitry Alexandrovich Pumpyanskiy is still a "leading businessperson" within the meaning of criterion (g) Article 3 (1) of Regulation No 269/2014. He provided materials confirming he had left senior positions at TMK and the Sinara Group.

The same applies to Galina Pumpyanskaya since her inclusion rested on her connection with Pumpyanskiy, wrongly classified as a leading businessperson involved in economic sectors providing substantial revenue to the Russian government.

It is important to note that there is no direct mention of annulling the decision to add Galina Pumpyanskaya and Dmitry Pumpyanskiy to the sanctions list dated 9 March 2022. The court, in its operative part, orders the annulment of the decisions extending the sanctions against them, not the initial decision to include them in the sanctions list. Thus, the initial sanctions remain in force and have not yet been lifted. For the sanctions to be lifted, Galina Pumpyanskaya and Dmitry Pumpyanskiy must be removed from Regulation 269/2014 by a decision of the EU Council. Successful defense in such cases relies on proving the unreliability of the information used to impose the sanctions.

References:
 

European Union General Court Judgement in Case T‑737/22 - Pumpyanskaya v Council 

European Union General Court Judgement in Case T-740/22 - Pumpyanskiy v Council