Anti-Russian Sanctions by the NSDC: How Can They Be Made Effective?

We often hear and talk about sanctions. Some cheer when they are imposed, others complain that they don’t work, and many feel that, overall, the sanctioning procedure in Ukraine is not particularly well thought out. And, to some extent, everyone is right.

The Law on Sanctions stipulates that decisions to apply specific sanctions must be made by the National Security and Defense Council (NSDC), and the President enacts them through decrees. However, in 2022, the mechanism for enforcing these measures changed somewhat — following amendments to the law, a new procedure for asset confiscation in favor of the state was introduced. Since then, the property of individuals who support Russia’s armed aggression can be confiscated by a court decision. 

This update to sanction policy has not only given the state new tools but has also highlighted weak spots. The first step towards seizing the assets of Kremlin collaborators remains the NSDC’s decision to block their assets. The quality of this initial step determines whether the case will hold up not only in national courts but also in international ones. 

So what can go wrong, and how can it be improved? Let’s break down how to ensure the sanctioning process is effective from A to Z.

How and on whom does the NSDC impose sanctions?

According to the Law on Sanctions, proposals to the NSDC to impose such restrictions on a specific individual, company, or state may be submitted by Parliament, the President, the Cabinet of Ministers, the National Bank, or the Security Service of Ukraine. The grounds for imposing sanctions are described broadly in the law — though they are listed exhaustively — and all relate to the protection of the state’s national interests or the rights of its citizens. 

However, it is impossible for the public to know what specific actions and evidence were set out in such proposals by these bodies. Nor is it clear what exactly formed the basis for the NSDC’s decision to impose sanctions — none of these documents are published. This is because such sanctions are often based on the materials of criminal proceedings in which the sanctioned individuals are involved, making it impossible to disclose the information. Still, under the international standard, an NSDC decision should at least contain a general statement of the grounds for imposing sanctions on an individual.

For example, in a Council of Europe decision dated 27 May 2024, the justification for sanctions against Viktor Medvedchuk reads: “Viktor Medvedchuk has promoted policies and actions intended to erode the credibility and legitimacy of the Government of Ukraine. Viktor Medvedchuk has close personal ties to and is associated with the President of the Russian Federation, Vladimir Putin. Through his associates, including Artem Marchevskyi, Viktor Medvedchuk controlled Ukrainian media outlets and used them to disseminate pro-Russian propaganda in Ukraine and beyond.”

In Ukraine, however, a sanctioned individual can learn the grounds for the sanctions only by challenging the decision in the Supreme Court, which can then request the relevant materials from the NSDC. For example, the Supreme Court recently granted such a motion by the lawyers of Petro Poroshenko, who is contesting sanctions imposed against him.

Under the law, Ukraine may impose sanctions on foreign states and companies, Ukrainian firms controlled by a foreign company or individual, foreign nationals, stateless persons, and entities engaged in terrorist activity. For Ukrainian citizens, however, all sanctions, except for the revocation of state awards, may only be applied if they engage in terrorist activity. This is logical, as the state already has domestic instruments to hold such individuals accountable — for example, criminal liability for treason, collaboration, and so forth.

Unfortunately, the NSDC has recently resorted more frequently to sanctioning Ukrainian citizens in cases where prosecuting them criminally is more complicated. 

One example is the NSDC’s decision of February 12, 2025 to impose sanctions on Petro Poroshenko, Kostiantyn Zhevaho, Hennadii Boholiubov, Ihor Kolomoiskyi, and Viktor Medvedchuk. All are named in criminal cases under various articles of the Criminal Code of Ukraine, and Kolomoiskyi is even in custody. Poroshenko and Zhevaho are Ukrainian citizens, while the situation is somewhat different for Medvedchuk, Kolomoiskyi, and Boholiubov: the first two were stripped of their Ukrainian citizenship by presidential decree, and the latter holds only a permanent residence permit in Ukraine (although the sanctions register still lists him as a Ukrainian citizen). 

Thus, in this case, to impose sanctions on Petro Poroshenko and Kostiantyn Zhevaho, the NSDC would have needed sufficient grounds to classify their actions as terrorism, as was done with Yanukovych. Furthermore, it remains unclear why Viktor Medvedchuk was included in this decision again, even though he has been under sanctions since before the full-scale invasion and his assets are already subject to confiscation proceedings.

These nuances point to flaws in the sanctioning procedure. But the broader question is whether the state, acting through the NSDC, should impose sanctions on individuals if they can instead be prosecuted criminally, especially when it comes to Ukrainian citizens. The shift in focus from criminal proceedings to the application of sanctions in cases like those described above appears to serve as an additional “safety net” for holding individuals involved in high-profile investigations accountable. However, on closer examination, this trend reflects not so much a pursuit of justice by any means, but rather a substitution of concepts. 

In other words, in seeking quicker solutions, the authorities are also expanding their political leverage through sanctions, thereby putting at risk human and civil rights, the principle of the rule of law, and other democratic values. It is crucial to ensure that sanctions, initially intended as a tool of political leverage to protect national interests from hostile states and entities, do not become a convenient and simplified substitute for justice. 

Problems with freezing the assets of sanctioned individuals

As noted earlier, beyond directly restricting a sanctioned individual’s property rights as a stand-alone sanction, since 2022 the freezing of assets has also served to ensure that such assets do not disappear before or during court proceedings on their potential confiscation.

In this context, the story of Brovary businessman Serhii Shapran is illustrative. He was recently served with a notice of suspicion for a number of criminal offenses related to how, in 2024, he managed to become the new owner of Ukrainian assets belonging to Russian businessman Igor Naumets worth UAH 1 billion — despite the NSDC sanctions imposed on Naumets and the seizure of his property. Simply put, Serhii Shapran allegedly managed to circumvent the NSDC’s asset freeze. How did he do it?

As uncovered by journalists from the Schemes project, Naumets was “helped” to sell his sanctioned assets, and some of those “helpers” were public officials. One such figure was the scandalous judge of Kyiv’s Pecherskyi District Court, Serhii Vovk, who lifted the seizure orders on Naumets’ Ukrainian companies with his ruling. 

Although the companies remained blocked by the NSDC, Naumets managed to outwit the system by selling not the corporate rights directly, as is typical, but the property complexes of these Ukrainian companies — land plots, buildings, gates, equipment, and so on — through intermediary firms to Serhii Shapran. Meaning, expensive blocked businesses were “broken up” and transferred piece by piece into the Brovary businessman’s ownership. 

This way, Igor Naumets evaded sanctions and profitably sold his Ukrainian assets, Serhii Shapran acquired them at a profit, and Ukraine potentially lost UAH 1 billion that could have been recovered through confiscation.

This case demonstrates that the current system for monitoring the assets of sanctioned individuals is so riddled with loopholes that asset freezes and seizures remain effective only until the first “backroom deal” with a complicit official. Worse still, only Serhii Shapran has so far received a notice of suspicion in this case — Ukraine still has no criminal liability for sanction evasion or violation, meaning there is no mechanism to prosecute those officials who agreed to such schemes.

Another problem arises when, by the time a confiscation claim is filed, not all the sanctioned individual’s assets have been frozen by the responsible authorities because they could not be promptly identified. This is particularly common for assets belonging to companies with complex ownership structures. 

For example, in several cases the Ministry of Justice has had to file additional claims with the HACC to recover newly discovered assets belonging to the same individuals (such as in the case of Mikhail Shelkovv and PJSC VSMPO-AVISMA Corporation, the Oleg Deripaska case, and the Viacheslav Bohuslaiev case). 

This situation could be improved, among other measures, by gathering information about an individual’s assets at the stage when they are added to the sanctions list and by improving the quality and interoperability of state registers. However, the central problem behind the ineffective freezing of sanctioned assets remains the lack of coordinated cooperation among all relevant authorities, under the leadership of the NSDC.

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As we can see, Ukraine’s anti-Russian sanctions still have many vulnerable spots at every stage of the process, and the country cannot afford to delay fixing these shortcomings in countering the aggressor at all levels. 

Adding Putin’s cronies to the NSDC’s sanctions lists and freezing their assets is just as important as actually confiscating or managing these assets. At the same time, it is vital to ensure that Ukraine’s sanctions policy aligns with international legal standards, so as not to risk it being successfully challenged in national or international courts. 

It is equally important to prevent abuses of the new sanctions mechanism and to remember its fundamental purpose — to safeguard national interests and security.

Nevertheless, the biggest shortcoming of Ukraine’s sanctions policy remains the fact that violating or circumventing sanctions has still not been criminalized, meaning such acts do not entail criminal liability. The case of Serhii Shapran proves this point: even if all systemic flaws are fixed, sanctions against Kremlin collaborators will not be truly effective unless their enforcement is backed by real penalties.