The Supreme Court has developed a new approach to sanctions challenges. Five new aspects are now coming into play.
Ukraine’s sanctions mechanism has not been perfect since its creation in 2014. Erroneous and indefinite application of sanctions has been a recurring feature throughout the mechanism’s history. When state authorities make arbitrary decisions, courts are supposed to provide a remedy, but until 2025 the Supreme Court generally sided with the authorities.
How the Supreme Court acted
Ukraine’s sanctions mechanism emerged in the context of russia’s occupation of territories in the eastern regions and Crimea in 2014. The Law of Ukraine “On Sanctions” created a mechanism for responding to activities by persons who pose a threat to national security. However, it set out the procedure for imposing and lifting sanctions only in general terms and contained no exceptions designed to safeguard fundamental human rights.
The National Security and Defence Council and the President developed the sanctions practice themselves: they determined what information about a person should be included in NSDC decisions, how to interpret the concept of “national security,” how the relevant authorities should interact, and how quickly sanctions should be imposed.
At the same time, the Supreme Court was developing its own approach to challenges against sanctions and to interpretation of the law. The essence of the Supreme Court’s case law in sanctions disputes became the doctrine of “limited judicial review”. This meant courts did not assess whether there were sufficient grounds for imposing sanctions, but only whether the President had acted within the limits of his discretion and followed the prescribed procedure.
This was a state-centred approach: if the President is the guarantor of state sovereignty, then only the President may assess threats to national security. In practice, this approach made sanctions extremely difficult to challenge. Cases decided in favour of sanctioned persons could be counted on one hand.
What changed after the lottery operator’s case
In October 2025, the European Court of Human Rights (ECHR) ruled in favour of one of the first Ukrainian entities to be sanctioned – M.S.L. LLC.
The company, one of Ukraine’s largest taxpayers, was first included in the sanctions lists in September 2015. The alleged grounds included tax evasion, money laundering and links to russia.
The Grand Chamber of the Supreme Court ended the lengthy domestic challenge by finding the sanctions lawful. The ECHR disagreed with the national courts. It found that Ukraine had violated the right to property and the right to an effective remedy.
The Court also noted that the NSDC decision imposing sanctions did not contain specific grounds and held that Ukrainian courts should conduct full judicial review, including examination of the factual grounds for imposing sanctions.
The ECHR’s conclusion was fundamentally different from the Supreme Court’s previous approach. Because Ukrainian courts must take ECHR judgments into account, the Supreme Court’s existing case law had to change.
How the case law is changing
When considering case No. 990/224/23, the Grand Chamber of the Supreme Court formally departed from its previous case law and “clarified” its earlier conclusions. In its judgment, the Grand Chamber provided a checklist for reviewing sanctions cases. It contains five aspects that judicial review in this category of cases must cover.
- Procedural aspect: whether the statutory procedure for imposing sanctions was followed, whether the relevant authorities had the power to adopt the sanctions decision, and whether a presidential decree enacted the NSDC decision.
- Factual basis: whether sufficient factual grounds support the imposition of sanctions and whether there is convincing evidence confirming the circumstances relied on as grounds for sanctions.
- Legal qualification: whether the established circumstances fall within the grounds for sanctions provided by the Law of Ukraine “On Sanctions” and whether the substantive law was applied correctly.
- Proportionality: whether the sanctions imposed are proportionate to the objective they were intended to achieve and whether a fair balance was maintained between the adverse consequences and the legitimate aim of the sanctions.
- Absence of arbitrariness: whether the decision to impose sanctions is manifestly unfounded, discriminatory or adopted for an improper purpose.
Although the Grand Chamber upheld the sanctions in the case concerned, the judges established a new approach to judicial proceedings challenging sanctions. This approach, together with the checklist developed by the Grand Chamber, is likely to shape both the cases currently pending before the Supreme Court and future sanctions challenges.
