Serhiy Lyamets: What is wrong with sanctions. Three aspects (continued)

This is the third text in a series of articles on the problems of sanctions policy in Ukraine. I have already written that trust in the mechanism is rapidly being lost because the main goal of sanctions is not an economic effect, but an informational one. Politicians all over the world, not just in Ukraine, use sanctions to influence voters with information.

In addition, the sanctions mechanism in Ukraine is incredibly "half-baked" and creates additional risks in the future. In particular, Ukraine may find itself under fire from multibillion-dollar counterclaims.

Another aspect is that sanctions are often imposed on Ukrainian citizens, which has serious legal and political consequences. The fact is that the laws of Ukraine should apply to Ukrainian citizens.

"When sanctions were later imposed on other Ukrainian individuals, in this context they have all the signs of political persecution, in my opinion. And the question is not whether I like these people or not. If these people are citizens of Ukraine, if they are legal entities – residents of Ukraine, arrest them through the courts, there is a form of serving suspicion in absentia, prosecute them in accordance with the law through legal mechanisms – investigation, prosecution by the bodies of the prosecutor's office, court decisions. Then all of this will be clear and transparent," said former Finance Minister Ihor Umansky.

Before continuing with this topic, I will make an important digression.

"POST-SOVIET PERSON"

The issue of sanctions in Ukraine is incredibly politicised, like many others. Political opponents describe the events as if the Ukrainian authorities are deliberately breaking the law to achieve their petty material goals. Of course, the authorities insist that they are driven by the national interest, which requires decisive action.

If we look at this confrontation objectively, we should consider sanctions as part of a historical process.

I would like to refer to the book "Post-Soviet Person" by the well-known Ukrainian political scientist Mykhailo Minakov. He describes the processes taking place in Ukraine as a search for a new path after the abandonment of the Soviet model of development.

All the states that used to be part of the USSR are going through this path in parallel. They all started out in roughly the same direction, seeking to build democratic institutions (separation of powers, rule of law, human rights protection, ideological pluralism), a free market (formation of an entrepreneurial class, neoliberal model and participation in the global economy), a national idea (rejection of the international development model in favour of nationalism) and a European direction (the desire to harmonise their own norms and values with the "old" Europe). The results of this path have been very different. In many cases, there has been a rollback from democracy towards autocracy, oligarchs have emerged instead of free entrepreneurs, and the rule of law has largely remained on paper.

One of the reasons why the dream did not come true is the so-called post-Soviet mindset. Millions of post-Soviet people have experienced disillusionment with freedom, and against this background, authoritarian tendencies have strengthened, accompanied by "existential hostility" between peoples.

Mikhail Minakov drew an important conclusion: the post-Soviet era served as a bridge between the past and the future. Striving for the flourishing of freedoms, many countries have turned the wrong way. Tired of uncertainty, they turned to the "familiar, albeit dangerous paths of the past". By the past, they mean not even the USSR, but the "imperial-colonial track".

The general trends are fully applicable to sanctions. There is reason to believe that legal practice has taken a wrong turn. However, this is not a coincidence, but a reflection of the current state of Ukrainian legislation, which is actually a manifestation of post-Soviet thinking. Due to its youth, Ukrainian legislation is a rather "half-baked" body of law that has been shaped and reworked by various political groups under the influence of the moment, the social situation and specific interests. As a result, the Ukrainian legal framework resembles a patchwork quilt compared to the legal frameworks of Britain, "old" Europe and the United States, which are monolithic and well-coordinated over centuries of practice. Numerous systemic contradictions often allow Ukrainian authorities to approach the same case from opposite perspectives.

Is it possible for a "half-baked" system full of contradictions to produce the right legacy? It is unlikely. The sanctions mechanism has inherited the growth diseases of the entire legal system of Ukraine. Therefore, it is not surprising that sanctions in Ukraine are extremely politicised, the mechanism is full of contradictions, and the sanctions themselves, instead of achieving their declared goals, create many risks. This leads to a loss of public trust.

THIRD ASPECT. SANCTIONS AGAINST UKRAINIAN CITIZENS ARE QUESTIONABLE

Why else do sanctions lose public trust in Ukraine? I would like to draw your attention to an article by Valeriy Karpuntsov, a well-known politician and lawyer in the past.

He cites the conclusions of three constitutional courts: Germany, Italy and Ukraine:

• "When the government begins to punish without trial, it abolishes the law as such" (Germany, 1985);
• "When the state begins to punish not through a court, but through a decree, it is no longer justice, but political reprisal" (Italy, 1997);
• "Sanctions are an instrument of the state's foreign policy, not a mechanism of criminal-law influence on the citizens of Ukraine, to whom only the justice system should be applied " (CCU).
• "In a state governed by the rule of law, even extraordinary powers are limited by law" (ECtHR, 1993).

All four statements are fully applicable to contemporary Ukraine, and they coincide with what Ihor Umansky said.

Sanctions were indeed conceived as an instrument of foreign policy, but later they began to be applied inside Ukraine. Moreover, they have become a tool of "quick" legislation, very similar to the emergency laws of wartime.

Without a doubt, this is a violation of legal logic, as Ukrainian laws and procedural norms should be applied inside Ukraine. In addition, they presuppose the availability of courts.

Here is a quote from Karpuntsov himself: "Sanctions in Ukraine are increasingly being applied not to foreign actors or collaborators, but to Ukrainian citizens against whom no verdict has been passed, no investigation has been completed, and often no criminal proceedings have even been opened... Article 41 of the Constitution of Ukraine guarantees the right to private property and prohibits its expropriation except by court order. However, the judiciary is not involved in the sanctions mechanism at all.... The government, represented by the National Security and Defence Council, decides on the imposition of sanctions on Ukrainian citizens. The President enforces it by decree. Banks block accounts, and ARMA transfers property to new managers. This is done bypassing the Criminal Code, the Criminal Procedure Code, the Civil Code, the courts and the bar."

Valeriy Karpuntsov has his own political position, which I will not quote. However, his conclusions as a lawyer are certainly very sound. I will present my thoughts without taking sides in political disputes.

Indeed, there are several unresolved cases in Ukraine where sanctions have been imposed on Ukrainian citizens and legal entities. However, these individuals have not been labelled as terrorists, and only in some cases the NSDC explains its decision by the links with Russia that these individuals (may) have. This violates Article 19 of the Constitution, which states: "State authorities and local self-government bodies, and their officials are obliged to act only on the basis, within the limits of authority and in the manner provided for by the Constitution and laws of Ukraine".

In other words, the sanctions against Ukrainian citizens directly contradict the Law on Sanctions itself. Nevertheless, they are applied, and this creates legal conflicts. The critical mass of such conflicts is increasingly accumulating due to the adoption of new sanctions.

These conflicts did not turn into actual court decisions until 2025. There were several reasons for this. The first was technical, the second was patriotic. The technical reason was that the NSDC simply did not issue a document with a seal and signatures to the sanctioned persons, and it is impossible to challenge the NSDC's decision in court based on an online news story. The patriotic reason is that Ukrainian courts have so far refused to accept sanctions cases. They justified their refusal by saying that there was no clear understanding of whether the President of Ukraine imposes sanctions or merely signs the NSDC's decision. In fact, the judges were afraid to stand in the way of the sanctions mechanism, lest they get a reaction from the authorities against themselves. They explained this fear by saying that judges are citizens of Ukraine and therefore stand in solidarity with the people. However, these arguments seem rather far-fetched. Sooner or later, Ukrainian courts will be forced to start hearing sanctions cases on a massive scale. Multibillion-dollar compensations are a likely outcome of this process.

A landmark event took place in 2025. The Supreme Court lifted personal sanctions against an individual for the first time. It was a Frenchman, former BNP Paribas employee Louis-MichelDurey. Sanctions were imposed on him in February 2023. The personality of Durey is not politically significant, but it is the judicial precedent that is of much greater importance. This is the first such decision. It is hard to imagine what surprises we can now expect from the consideration of similar cases.

Undoubtedly, such phenomena are gradually eroding public confidence in sanctions. A paradoxical effect is already being observed. Gradually, the anti-rating of the current government is growing, and the decisions it makes are reputationally working against it (although they used to work in its favour). The "Cardboard Maidan" only proved this. The next stage will be when the sanctions imposed by the authorities become a kind of "quality mark" for the politician under sanctions, and not only in the eyes of his supporters. Of course, we are only talking about selective domestic sanctions so far, but it is possible that later on, society will feel disdain for sanctions in general. This is an emotional, not a rational phenomenon.

The confiscation of property under sanctions is starting to have a similar effect. At the beginning of the war, Ukraine passed a law that allowed confiscation. After 24 May 2022, it became possible to confiscate in favour of Ukraine not only the property of sanctioned persons, but also property (formally someone else's) that they COULD DISPOSE OF (i.e., even if it did not belong to them). The law also suggested that property could be confiscated not only in Ukraine but also abroad.

A kind of hybrid legal product was created to confiscate property through the courts. The High Anti-Corruption Court of Ukraine (HACC) has been empowered to seize assets under sanctions in favour of the state. If it is proved that the person under sanctions cannot prove the origin of the assets and at the same time acted for the benefit of the aggressor state (of course, this is not difficult to prove), these assets are seized as illegally obtained.

The Ukrainian authorities liked the taste of confiscation.

I would like to remind you of the phenomenon of the post-Soviet person (see above). Confiscation gave rise to an absolutely inevitable phenomenon – outright chaos in the management of seized property. Out of this chaos grew the abuses and redistribution that are characteristic for Ukraine.

Accordingly, a direct logical chain emerged: sanctions are a way to seize and redistribute other people's property. This connection looked like a certain achievement while the property of Russian oligarchs was being seized. But it became toxic when sanctions were imposed on legitimate businessmen for reasons that could be called far-fetched.

"And at that time, there was information that the very fact of being included or not included in such lists was tariffed, and people were offered certain conditions. I can't say whether this is true or not, but given the fact that I have already said above that the list did not include significant smugglers, we can suspect that the rumours were grounded," Umansky describes.

Indeed, in the context of a post-Soviet person, such a phenomenon is quite possible. At least, in the perception of Ukrainians. We should not be surprised if the assumption of sanctions as a tool of redistribution automatically extends to assets seized from Russians.

Let me remind you once again of the logical chain: sanctions = political persecution = redistribution = hidden personal gain. Each ambiguous decision only reinforces suspicions and undermines trust in the government's decisions.

Add to this the very questionable economic efficiency of sanctions, which I have written about before. Assets worth tens of billions of hryvnias over the years have brought Ukraine benefits of at most 2 billion. In turn, this raises suspicions that the low economic efficiency may be intentional. And the revenues from management of assets which are considered "bad", go far from the Ukrainian budget.

These failures undermine the credibility of the sanctions mechanism in Ukraine as a whole. They raise fair questions about the true motives of those who prepared these decisions.

To sum up: sanctions in Ukraine are definitely a "half-baked" mechanism used as a tool for a quick emotional response to the war. Over the years, the "childhood diseases" of sanctions have started to turn into serious illnesses that threaten Ukraine with serious consequences in the form of counterclaims. However, even before that, sanctions risk becoming toxic to the authorities, and then they will play against Ukraine.

How to avoid this scenario is a separate and very important discussion.

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