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Sergey Glandin: Disgraced Senator: why Kerimov still remains under US sanctions. Forbes, 2 July 2018

The French police has dropped all the charges against Kerimov - now he can return to Russia. However, this is unlikely to convince the US to exclude the billionaire from the sanctions list. 

Two "sanction" events happened 28 June. The first one produced widespread reverberations in our country, while the second one was almost unnoticed. The first event was dropping charges against Suleyman Kerimov by the French police. People close to the billionaire and Senator think that this will also help him to get rid of the American sanctions imposed in April. 

The second news was about the publication of the sanction regulations on the so-called "Magnitsky act" which allows to apply American sanctions to people (officials and people close to them) involved in corruption and violation of human rights. On the grounds of the norms of this act Donald Trump declared the state of emergency in the US in December last year because of corruption abroad and ordered the subordinate authorities to tackle it by means of sanctions. However, it was not clear how exactly to implement this act. This can be proved by the fact that only 15 natural persons (out of the Russians - the eldest son of the Prosecutor-General of Russia) have fallen under sanctions in accordance with the Magnitsky act so far. Now the list called GLOMAG (Global Magnitsky) is going to increase more often. 

Kerimov's problems

Suleyman Kerimov fell under American sanctions 6 April 2018. The US Ministry of Finance gave the following explanation for the extension of the "Russian" list of sanctions: "The present action is aimed at some people... Including those who capitalize on the Putin's regime and play a key role in promoting ill-intentioned actions of Russia". The US Treasury press-release reads: "Suleyman Kerimov is included [in the list of sanctions] because he is the Russian Federation official. Kerimov is a member of the Council of the Federation". Kerimov's detention by the French police 20 November 2017 and charges of non-payment of €400 million in taxes connected with purchasing villas in Nice which followed, were also mentioned. It was also said that Kerimov had been able to bring suit-cases full of cash during his visits to France. 

Both chambers of the Russian Parliament criticized the actions of the French police and reminded that Kerimov enjoyed diplomatic immunity, therefore his detention conflicted with the Vienna convention on diplomatic relations. 

While detention of Kerimov took place, the Office of Foreign Assets Control of the US Treasury was preparing a report about high officials, oligarchs and state-affiliated enterprises in Russia for a special committee of the US Congress. The final list known as "Kremlin's" was published 29 January 2018 and, in fact, presented the Russian version of the Forbes dollar billionaires ranking for 2017. Each person from the "Kremlin's list" got in a separate OFAC file. The Internet is the main source of information for the OFAC. The news about Kerimov's detention in France came timely. 

Is it possible for Kerimov charges against whom have been dropped in France, to leave the American list of sanctions? First of all, it's important to realize that the press-release of the US Treasury which says about Kerimov's problems with the French law, cannot be the basis for a challenge. In other words, everything it says about suit-cases of money (which, as it turns out, weren't carried by Kerimov anywhere) can be forgotten. 

The real reason for falling under the US sanctions is always the conformity of this or that person with the formal basis for the corresponding normative act, established by the OFAC. There is a reference to that act in the paragraph of the April list of sanctions about each Russian mentioned in that list. The reference is in the square brackets. Kerimov's case falls under the Barak Obama decree of 16 March 2014 (UKRAINE-EO13661) by means of which the then-President increased the state of emergency in the USA in connection with the actions and policy of the Russian government in the Ukraine. Clause 1 of the decree allows the US authorities to impose sanctions on any high official in the Russian Federation or any "person who belongs to, is controlled by, acts on behalf of or in the interests of the Government of the Russian Federation". 

As to the OFAC folder on Kerimov, it may contain:

- documents which confirm the high official's status in Russia;

- information about the size of a fortune;

- articles in mass media indicating his proximity to the Russian ruling elite, or photos showing him together with the President of Russia;

- articles about the detention in France in connection with the alleged money laundering. 

Already in 1999 the US court of appeal permitted administrative bodies to extend the list of sanctions on the basis of a long list of sources including mass media, the Internet and even rumours. Therefore the OFAC may not possess official documents of foreign state bodies. 

Kerimov has an opportunity to send in an application to the OFAC within six years for administrative reconsideration of his presence in the list of sanctions. In order to succeed, it must be convincingly proved that whatever the reasons for putting Kerimov's name in the list could have been, they are not relevant any longer and were initially false. The OFAC has learnt the lesson of little judicial practice of excluding from the sanctions list, well. It prompts that a person doesn't fall under sanctions just for nothing, but only if a folder contains information that supports such a decision, and the head of the US Ministry of Finance makes this decision. 

Thus, even if articles on the fourth point (about Kerimov's detention) have lost their gravity and including in the sanctions list with this formulation no longer corresponds with the reality, at least three reasons to keep Kerimov under sanctions still have force. So, Kerimov's chances to escape sanctions will increase if he quits the upper chamber of the Russian Parliament.

Sergey Glandin, special counsellor on sanctions law