knowledge 9 December 2024 |

EU sanctions update: EU Court Upholds Legal Services Ban on Russian Entities

The General Court of the EU (“the General Court”) has recently ruled in three joined cases1 that a prohibition on the provision of legal services to Russian entities is lawful and does not interfere disproportionately with EU fundamental rights. The General Court clarified that the prohibition is subject to certain exceptions2 and does not extend to legal services provided in connection with judicial, administrative or arbitral proceedings.

Background to the rulings

In Spring 2022, following the Russian aggression against Ukraine, the Council of the EU adopted a series of sanctions measures to put pressure on Russia to end its incursion, which measures continue to expand as new EU sanctions packages are rolled out. This included a prohibition, subject to certain exceptions, on the provision of ‘legal advisory services’ to the Russian Government or any legal persons/bodies established in Russia.3 The three cases challenging this prohibition were brought by a number of Belgian Bar associations, Belgian lawyers, and French Bar associations before the General Court. The parties sought annulment of the prohibition on three grounds, broadly claiming that the prohibition:-

  1. Lacked any statement of reasons;
  2. Infringes the EU fundamental  rights of access to legal advice from a lawyer and protections regarding professional secrecy and the duty of lawyers to be independent; and
  3. Infringes core values pertaining to the rule of law, the principles of proportionality and legal certainty.

Decision of the General Court

The General Court dismissed all three cases, finding that the prohibition was lawful and did not, or did not disproportionately, interfere with the alleged rights. Its reasoning on the three particular grounds raised is set out below.

1. Claim of infringement of the right to access legal advice

The General Court affirmed that under the EU Charter of Fundamental Rights (the “EU Charter”) all persons have a right to effective judicial protection, which includes the right to be advised and represented by a lawyer in existing or probable litigation. However, the General Court ruled that this right was not infringed by the prohibition. Its primary reasoning on this was twofold: firstly, that the prohibition does not apply to legal advisory services which are provided in connection with judicial, administrative or arbitral proceedings, but only to legal advice that has no link with such proceedings. Secondly, the General Court clarified that legal advice provided to natural persons does not fall within the scope of the prohibition.

2. Claim of infringement of professional secrecy and independence of lawyers

The parties argued that the derogations from the prohibition interfered with these rights. The General Court also rejected this argument. Recalling the importance of the independence of lawyers to guarantee the right of persons to an effective remedy, the General Court distinguished that right in contexts ‘where there is a link with judicial proceedings’ from the prohibition which applies to legal advisory services. It said that the carve-out also covers preliminary legal consultations intended to assess the legal situation of the client to determine the likelihood or prospects of proceedings, or advice on how to institute or avoid judicial proceedings. Finally, the General Court also took account of the fact that the prohibition does not require a lawyer to share, without their client’s consent, information covered by the professional secrecy guarantee in Article 7 of the EU Charter. For these reasons, it ruled that even if there were interference with the independence of lawyers, it would be justified and proportionate.

3. Claim of infringement of the principles of proportionality and legal certainty

The General Court affirmed that limits may be placed on the fundamental role of lawyers in ensuring compliance with and defending the rule of law. As such, their role may be subject to restrictions which are justified by objectives pursued by the EU, provided that such restrictions are not a disproportionate and intolerable interference with fundamental rights. The General Court concluded that the prohibition, taking account of the exceptions to it  (as discussed above under  issues 1 and 2)  pursues a legitimate objective of general interest, without impairing the essence of the fundamental role of lawyers in a democratic society.

Comment

The General Court’s interpretation of the prohibition on legal advisory services is welcome against a background of limited judicial authority on the scope and application of EU sanctions rules generally. EU Sanctions are often drafted broadly and with enforcement left up to national authorities, they are open to diverging interpretations.

This decision provides lawyers with much needed clarity, including that: (i) they are not prohibited from providing advice to designated Russian entities in relation to contentious proceedings; (ii) that the restriction does not prohibit the provision of legal advice to natural persons; and (iii) that lawyers can remain steadfast in the knowledge that their advice will remain confidential in line with the protections relating to professional secrecy under Article 7 of the EU Charter, and will not fall foul of the prohibition.

Also contributed to by Charlotte Ashmore 

  1. Cases T-797/22, T-798/22, and T-828/22, Judgment of 2 October 2024 available in English here.
  2. Articles 5n (5) and (6) of EU Regulation 833/2014.
  3. Article 5n (2) of Regulation (EU) No 833/2014 (as amended).

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.