ILI Project Manager Andrii Klymosiuk, in an article for RBC-Ukraine, explained what burden companies bear due to sanctioned owners
Around half of Ukraine's oligarchs are currently under Ukrainian sanctions. These individuals are the ultimate beneficial owners of a vast sector of the Ukrainian economy. ILI Project Manager Andrii Klymosiuk told RBC-Ukraine about this.
"When the state applies sanctions to the owners of large businesses, the sanctions regime begins to affect their companies as well. A paradoxical situation arises in which sanctions that are meant to complicate the life of a single individual create problems for individual companies and even entire economic sectors. Formally, the assets of sanctioned persons are not blocked, but we are seeing negative consequences for the operations of enterprises with such shareholders," the expert noted.
He explained that due to provisions of the Tax Code and the Mining Code, the hardest hit by sanctions policy are mining companies and exporters – for the former, the state suspends special permits, while for the latter, it withholds VAT refunds. The situation is further complicated by the selective nature of sanctions policy.
"At the stage of introduction, a sanctions decision can be modified — for example, specific special permits to be suspended for a particular company may be added, or other restrictive measures may be applied. This is a very manual and selective process: some companies operate without any problems and nothing happens to them, while others in certain sectors face difficulties. Some presidential decrees even specify the numbers of particular special permits that must be suspended – there is no uniform approach to all sanctioned persons," Andrii Klymosiuk commented.
Another shortcoming of sanctions policy highlighted by the ILI expert is the absence of publicly available information about the reasons for their imposition. In October 2025, following a lawsuit by the state lottery operator M.S.L., the European Court of Human Rights ruled that part of the justification must be made public so that a sanctioned person can understand what they are being accused of and pursue legal recourse.
"We have none of that at all. You go to the sanctions register, enter the name 'Novinsky,' and under the reasons you will see a reference to a paragraph of the law – and nothing more. The European Court said that is insufficient; the reason must be individual in each specific case. At the same time, Ukraine is obliged to implement this ruling," Andrii Klymosiuk remarked.
He added that the chances of challenging sanctions in Ukrainian courts are slim. Moreover, the Grand Chamber of the Supreme Court has taken the position that the judicial branch cannot assess the validity of sanctions, since national security is the exclusive prerogative of the president.
"Ukraine's sanctions policy must follow European practices. In the US and the EU, all assets and financial operations of a company whose beneficiary falls under sanctions are immediately frozen. It simply cannot carry out any activity whatsoever," the ILI Project Manager emphasized.