NSDC sanctions: can they be challenged in court? Analysis of court practice

In his new analytical article for LIGA ZAKON, LESHCHENKO & PARTNERSʼ attorney Danylo Tryasov provides a detailed analysis of the issue of judicial appeal against sanctions imposed by the National Security and Defence Council, as well as the main legal barriers and potential defence mechanisms.

Is an appeal against a decision of the National Security and Defence Council of Ukraine an appropriate way to protect the rights of a person subject to sanctions?

In sanctions cases, it is not uncommon for a person subject to personal special economic and other restrictive measures (sanctions) pursuant to the Law of Ukraine ‘On Sanctions’ to file an administrative claim for cancellation of an unlawful decision with the National Security and Defence Council of Ukraine (hereinafter referred to as the NSDC), but in practice this is not entirely true in view of the following.

Article 107 of the Constitution of Ukraine stipulates that the National Security and Defence Council of Ukraine is a coordinating body on national security and defence under the President of Ukraine. The NSDC coordinates and controls the activities of executive authorities in the field of national security and defence. The NSDC is chaired by the President. Decisions of the NSDC of Ukraine are put into effect by presidential decrees.

In other words, decisions of the NSDC of Ukraine become legally binding only after they are enacted by a presidential decree. Failure to comply with this procedure for the entry into force of a decision of the NSDC of Ukraine actually makes it impossible for it to be subject to administrative appeal. In other words, a decision of the NSDC cannot legally exist without a Presidential Decree, and it is primarily the act of individual action of the head of state that is subject to appeal.

In view of this, the Grand Chamber of the Supreme Court in its decision of 13 January 2021 in case No. 9901/405/19 made the following legal conclusion: ” 69. In accordance with the provisions of part three of Article 10 of the Law of Ukraine ‘On the National Security and Defence Council of Ukraine’, the NSDC decisions are enacted by presidential decrees.

70. According to the wording of this law, the President’s actions are not purely ceremonial, otherwise the law could have provided for a different wording, for example, that NSDC decisions are signed by the President.
71. Such wording as ‘putting into effect’ and, moreover, the need to issue a special act – a presidential decree – in this regard means, firstly, that without such actions of the President, the NSDC decision does not come into force by itself; secondly, that the President has discretion in the matter of putting such a decision into effect or not, issuing or not issuing a relevant decree. The need for discretion on the part of the President in the exercise of this power means that he or she should carry out analytical activities in the form of assessing the expediency, legality and validity of such a decision.
72. The same conclusion can be drawn from the analysis of the text of paragraph 2 of Article 13 of the Law of Ukraine ‘On the National Security and Defence Council of Ukraine’, which provides for such activities of the President as consideration of draft acts on the implementation of NSDC decisions.”

Based on the above, it can be concluded that the implementation of the intention to impose sanctions on the sanctioned person actually falls within the competence of the President of Ukraine, who is the Chairman of the National Security and Defence Council of Ukraine, and it is the existence of his Decree that is the subject of an administrative appeal (an act of individual action against the sanctioned person).

These allegations were also substantiated in the legal opinion of the Supreme Court’s decision of 16 December 2021, case No. 280/5208/21, in which the Supreme Court noted the following: ” 33. This conclusion confirms the above conclusion regarding the acquisition of legal significance by the decision of the National Security and Defence Council of Ukraine after its entry into force by a decree of the President of Ukraine, who, in accordance with the above provisions of part 1 of Article 5 of the Law of Ukraine ‘On the National Security and Defence Council of Ukraine’, is the Chairman of the National Security and Defence Council of Ukraine, that is, the sanctions determined in the decision of the National Security and Defence Council of Ukraine are actually applied by a decree of the President of Ukraine, the appeal of which is an appropriate way to protect

34. At the same time, cases, in particular, challenging acts of the President of Ukraine, are under the jurisdiction of the Supreme Court as a court of first instance (Article 22(4) of the Code of Administrative Procedure of Ukraine).
35. Thus, the above circumstances indicate that it is impossible to appeal the decision of the National Security and Defence Council of Ukraine to the court either separately, by applying to the court, or by filing a separate claim, since, given the above provisions of the law, it is not a decision of the authority within the meaning of the provisions of Article 19(1)(1) of the Code of Administrative Procedure of Ukraine and, accordingly, will not allow to effectively protect and restore (in case of violations) the rights of the person against whom the sanctions were imposed, which is not in line with the tasks of the administrative

Moreover, it is necessary to pay attention to the very procedure of making decisions of the NSDC of Ukraine on imposing sanctions on a person, as in practice this procedure is not transparent, clear and legal, which already at the stage of making a decision of the NSDC of Ukraine, which is subsequently enacted by the Decree of the President of Ukraine, makes this decision illegal, unlawful and violating the rights and legitimate interests of the sanctioned persons.

Accordingly, with the adoption of the Law of Ukraine ‘On Sanctions’ in August 2014, the Law of Ukraine ‘On the National Security and Defence Council of Ukraine’ was amended, namely, part three of Article 2 of the Law of Ukraine ‘On the National Security and Defence Council of Ukraine’ stipulates that the procedure of the National Security and Defence Council of Ukraine is established by this Law and the Rules of Procedure of the National Security and Defence Council of Ukraine, in the previous version.

At the same time, since 2014, the Rules of Procedure of the NSDC of Ukraine have not been adopted and approved.

Instead, the Law of Ukraine ‘On Amendments to Certain Legislative Acts of Ukraine on the Application of Sanctions’ of 13 July 2023 No. 3223-IX amended part three of Article 2 of the Law of Ukraine ‘On the National Security and Defence Council of Ukraine’, which established that the Procedure for the functioning of the National Security and Defence Council of Ukraine is established only by law. 

The Rules of Procedure of the NSDC of Ukraine, as well as any rules of procedure of a public authority, should define a set of rules and regulations governing the internal legal procedures of the NSDC of Ukraine, organisational principles of the NSDC of Ukraine; the procedure for organising the work of the members of the NSDC of Ukraine; the procedure for working with documents; providing materials; discussing them; the decision-making procedure; protocol and transcription of meetings, etc.

At the same time, instead of adopting the Rules of Procedure that would determine the procedure for the functioning of the NSDC of Ukraine, the legislator excluded from the Law one of the mandatory statutory legal acts, which calls into question the legality of such decisions of the NSDC of Ukraine, which subsequently come into force after they are enacted by Decrees of the President of Ukraine.

Is there any positive judicial practice of cancelling Presidential Decrees on imposing sanctions on individuals?

At present, the court decisions made by the Supreme Court in these categories of cases concerning Ukrainian citizens and legal entities registered under Ukrainian law do not have any positive decisions regarding persons subject to sanctions, and the cancellation of the decrees of the President of Ukraine on the introduction of sanctions in court is almost impossible for a person subject to sanctions, and sanctions are a political tool.

For example, recently, the Supreme Court, by its decision of 26 June 2024 in case No. 9901/425/21, satisfied the claim of Probike Plus Limited Liability Company and declared unlawful and cancelled the Decree of the President of Ukraine of 21 April 2021 No. 169/2021 ‘On the Decision of the National Security and Defence Council of Ukraine of 15 April 2021 ’On the Application of Personal Special Economic and Other Restrictive Measures (Sanctions)”, in part of paragraph 92 of Annex 2, according to which sanctions were imposed on Probike Plus Limited Liability Company “The court concluded that the defendant and the third parties participating in the case on the defendant’s side failed to fulfil the procedural obligation to prove the legality of their decisions before the court and failed to prove by proper, admissible and reliable evidence the existence of legal grounds for initiating and imposing sanctions on the plaintiff, enacted by the disputed Decree. For these reasons, the claim should be satisfied.”

The Grand Chamber of the Supreme Court, by its resolution of 28 January 2025, upheld the appeals of the President of Ukraine and the Security Service of Ukraine and cancelled the decision of the court of first instance of 26 June 2024 in case No. 9901/425/21.

That is, for a sanctioned person, the cancellation of sanctions at the national level is almost an unrealistic goal and means of protecting violated rights and legitimate interests.

The only thing left for such a person is to apply to the European Court of Human Rights to protect their violated rights.

Another positive decision on 10 February 2025 in case No. 990/176/23 was made by the Administrative Court of Cassation within the Supreme Court in respect of a French citizen who was subject to sanctions, in which the court stated the following: “The Court concluded that the defendant and the third parties participating in the case on the defendant’s side failed to fulfil the procedural obligation to prove the legality of their decisions before the court and failed to prove by proper, admissible and reliable evidence the existence of legal grounds for initiating and applying sanctions to the plaintiff, enacted by the disputed Decree. In this regard, the Court comes to the conclusion that the Decree of the President of Ukraine No. 82/2023 of 19 February 2023 in the part concerning the plaintiff is unlawful and invalid on the above grounds. “.

However, with regard to Ukrainian citizens and legal entities registered under Ukrainian law, the court practice, on the contrary, remains negative in terms of protecting their rights and legitimate interests, which makes sanctions applied to their own citizens a ‘dangerous political tool’.

The following case law of the Supreme Court can also be cited, although not in favour of the sanctioned persons:

1. Ruling of the Commercial Court of Cassation of the Supreme Court of 21 June 2023 in case No. 910/2529/22
   (regarding cancellation of the Order of the Ministry of Justice of Ukraine on satisfaction of the complaint of the Security Service of Ukraine regarding cancellation of registration actions of the state registrar).
2. Resolution of the Grand Chamber of the Supreme Court of 13 January 2021 case No. 9901/405/19 (Proceedings No. 11-203zaі20).
3. Resolution of the Supreme Court of 6 July 2023 in case No. 9901/376/21
4. Ruling of the SC of the Supreme Court of 6 July 2023 in Case No. 9901/635/18
5. Resolution of the SC of the Supreme Court of 27 August 2024 at case No. 800/162/16

The vagueness of the grounds for applying the sanctions regime in the legislation requires effective judicial control to prevent violations of the Convention standards and to protect the state from possible future applications to the ECHR.