The depository calls for justice – Kommersant FM

NSD is preparing to challenge the sanctions in the EU court. The National Settlement Depository was blacklisted by the European Union last year, causing several million investors to lose access to their foreign investments. The company, which is part of the Moscow Exchange, almost immediately filed a lawsuit demanding that the restrictions be lifted, and only now, as Kommersant FM’s interlocutors noted, a date for the meeting was set.

A panel of five judges will hear the case on January 23. Are there any prospects for the Russian plaintiff? Partner at BGP Litigation Sergei Glandin believes that the case can be considered quickly: “A lawsuit was filed in August 2023. Excerpts were officially published where NSD wants to cancel the primary regulatory legal acts in which its name was included in the sanctions list. This process involves several rounds of document exchange.

First, the court sends the claim to the defendant, the defendant has three months to write a response, then the plaintiff can file his objections to the review. If at least one side requests an oral hearing, it will take place.

Now that the date has been set and the hearings have taken place, the court will retire to make a decision. As for the timing, for legal entities writing a decision takes an average of five months. This means that in the middle of the year we will receive a decision on the NSD case.”

The wording with which NSD was included in the sanctions lists reads: “This is the largest settlement depository in Russia, in terms of the volume of assets it is recognized as a systemically important organization and plays an irreplaceable role in the Russian financial market, therefore, it is directly or indirectly included in the activities, policies and resources of the Russian government.”

The materials published on the website of the European Court indicate that the company considers these facts to be incorrect, unproven and unfounded. In addition, she challenges the very norms that allowed NSD to be included in the sanctions lists, and points out that her fundamental rights were violated. Previously, Russian plaintiffs were unable to prove this, points out Tatyana Neveeva, senior partner at Verba Legal: “Recently, there have been some positive cases of Russian individuals challenging sanctions. At the same time, this is a fairly common formulation.

A very significant number of Russian companies have come under sanctions precisely because they are, for example, simply large taxpayers, thereby sponsoring the budget or financing the state. So far we have not seen this argument successfully challenged. In the case of NSD, it will be difficult to dispute the reason itself, because, of course, NSD is a fairly large player in the financial market. Rather, it will be necessary to prove that these circumstances are not grounds for imposing sanctions against the company, or at least they are insufficient for such actions.

If NSD suddenly succeeds, then, of course, it will be an excellent positive precedent for other large companies.”

Previously, only individuals who used the NSD infrastructure for foreign investments could obtain the return of assets through the courts. Another tool for returning funds, as the Ministry of Finance notes, may be the exchange of frozen assets with foreigners. Deputy Minister of Finance Ivan Chebeskov told RBC that now the option is available only for applications up to 100 thousand rubles, but later it can be expanded, and institutional investors will also be allowed to participate in transactions. The exchange should be completed by the end of 2024.

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Ivan Yakunin