Legality of penalising Russian Oligarchs What is the legal basis for penalising individual Russian Oligarchs? Having ill-gotten wealth and dubious friends is hardly unique to Russia, and whilst I can understand with the desire of the Western / European powers to been seen to be doing something I can't see the legal basis of confiscating their assets. If they really are just a bunch of crooks why have they been swanning around the free-world for the last 25 years? What have they done in the last nine-days which suddenly justifies personal sanctions against them? As far as I know most of them don't hold any current positions of power/authority in Russia (not officially anyhow). Whilst I broadly accept the consensus that they're Putin's cronies who owe much of their current success to their past associations with him, and whilst I'd personally be delighted to see their money go to support Ukrainian refugees I can't actually see a good legal argument for sanctions other than 'guilt by association' - which probably wouldn't stand up in court.
In the united-kingdom, the legal basis flows from the Sanctions and Anti-Money Laundering Act 2018. This allows regulations to be made for particular sanctions regimes, in this case The Russia (Sanctions) (EU Exit) Regulations 2019 and its several amendments, including three revisions this year. Under those regulations, the Secretary of State may designate individuals who are then subject to particular sanctions. A consolidated list is available for all individuals and organizations who have been named under any of the regulations, not just the Russia one. Working backwards from the list, we see such names as Vladimir Putin, who has an asset freeze on the grounds that - Vladimir Vladimirovich PUTIN is the President of the Russian Federation, carrying ultimate authority for the policy of the Russian government and Russian armed forces. In February 2022, PUTIN ordered Russian military forces to launch an invasion of Ukraine, undermining and threatening the territorial integrity, sovereignty or independence of Ukraine. Thus, he has been named for the purposes of regulation 11, and the statement of reasons (required by regulation 8) refers to the specific grounds in regulation 6 by which a person can be added to the list. In this case, those grounds are 6(2)(a)(i) as interpreted by 6(3)(a), (2) In this regulation, an &quot;involved person&quot; means a person who — (a) is or has been involved in— (i) destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine ... (3) For the purposes of this regulation, a person is “involved in destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine” if— (a) the person is responsible for, engages in, provides support for, or promotes any policy or action which destabilises Ukraine or undermines or threatens the territorial integrity, sovereignty or independence of Ukraine For &quot;oligarchs&quot; who are on the list, the Foreign Secretary has specifically drawn attention to Gennady Timchenko, described as Russia's sixth-richest oligarch. The statement of reasons says: Gennadiy Timchenko, hereafter TIMCHENKO is a major shareholder in Bank &quot;Rossiya&quot;. Bank &quot;Rossiya&quot; is a key stakeholder in the National Media Group which supports Russian policy which is destabilising Ukraine. Following the annexation of Crimea, Bank &quot;Rossiya&quot; has expanded its bank branches and provision of insurance and investment throughout Crimea and Sevastopol; and offers support to military activities and the formation of major transport links and cards that allow the public to travel easily around the peninsula. Therefore, Bank &quot;Rossiya&quot; has supported the consolidation of Crimea into the Russian Federation by integrating the financial system following the annexation of Crimea. TIMCHENKO therefore is or has been involved in engaging in, providing support for, or promoting any policy or action which destabilises Ukraine or undermines or threatens the territorial integrity, sovereignty or independence of Ukraine. Additionally, TIMCHENKO is associated with a person involved in destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine. These are the same regulation 6 grounds as for Putin, but with additional reasoning to draw the connection (also, a citation under 6(2)(d) for &quot;associated with&quot;). One reason for this text being required is to undercut any suggestion that the listing is because of &quot;guilt by association&quot;. In judicial review, for which continue reading below, this kind of statement and the process that gave rise to it is powerful evidence against a suggestion that the Secretary of State was acting other than rationally. We can now look back to the 2018 Act, which authorizes the 2019 Regulations and provides rules about how the Secretary of State can designate people. Detailed provisions in the Regulations trace back to rules in the Act about the shape of a sanctions regime; for example, the &quot;asset freeze&quot; of regulation 11 is within section 3 of the Act on &quot;Financial sanctions&quot;. There are also procedural safeguards around the making of regulations, mainly relating to Parliamentary approval, and around the designation of individuals. For example, a designated person can ask the Secretary of State to be removed from the list, and under section 22(3) she must do so if the person doesn't fit the criteria by which they were originally included. That would include if they are no longer an &quot;involved person&quot;, or if their designation were no longer deemed appropriate based on the purpose of the sanctions regulations. As with other executive actions, judicial review is available (under Chapter 4 of the Act), which could bring in considerations of whether the Secretary of State acted within her powers, did so &quot;reasonably&quot;, etc. Human rights grounds are also possible, in relation to procedural fairness (Article 6) or the right to enjoy property (ECHR Protocol 1, Article 1). Against those stand arguments on the public interest, UK compliance with international obligations, national security, the general integrity of the sanctions system, and so forth. It is plausible that if a claim reached this point, the Secretary of State would be able to show that the designation - as described in the statement of reasons above - was on sound policy grounds, was taken after a sober review of the evidence, and was proportionate in the circumstances. There is not much case law on the 2018 Act, given its recency. One example is R (Youssef) v Secretary of State [2021] EWHC 3188 (Admin) in which an Article 6 claim failed. That was in relation to UN sanctions against Al-Qaida, which is a different position from the one here, but it has some force for understanding the current UK system. The present Act was created partially in response to the judgement in HM Treasury v Ahmed [2010] UKSC 2 against a previous version of the sanctions laws, and the 2021 case found that the new version was acceptable. The judicial review avenue and the requirement to give reasons are directly aimed at complying with Article 6. While a court could always potentially find another problem, the current Act and the Regulations are as watertight as the drafters can make them in the light of existing precedent.
The linked Bloomberg story quotes the rule as: The recipient is allowed to keep the funds if they [the funds] discharge a valid debt, the recipient made no misrepresentations to induce the payment, and the recipient did not have notice of the mistake. If the recipient, or somone acting on behalf of the recipient, hacked the sender to induce the payment, that sounds like a form of misrepresentation to me. If the hacker is unconnected with the recipient there seems no way that the hacker benefits financially, although I suppose a hacker might simply want to cause an amusing disruption. As I understand it this rule only applies when the sender in fact owes a debt to the recipient that the transfer pays off. If the hacker were working for one of a large group of recipients, most of whom are innocent, and subsequent analysis establishes that there was a hacker, but not who the hacker was or which of the many recipients the hacker was working for, I suspect, but cannot prove, that the doctrine would not apply, because the transfer was not a valid but incorrect act by the sender, but was a fraudulent intervention in the sender's procedures.
The ultimate question is whether an obviously joke enterprise constitutes a real offering of securities or just performance art (a Ponzi scheme is one of many types of securities fraud). An unregistered offering of securities that does not fall within an exception is per se unlawful under federal law, but a security is generally defined as something offered with at least a prospect of making a potential profit for the investor which is not something that is true of this offering. (And if less than $1,000,000 are sold it might even be within an exemption to securities laws). State securities laws are divided into two categories. Most allow any offering of securities so long as proper disclosures are made and the offer is restricted to the right kind of investors. A minority impose substantive quality standards on offerings and this offering might violate the law in those states (although this still would present the question of whether a known money losing opportunity is really a security since there is no evidence of an intent to potentially make a profit from the investment). I do not believe that California imposes substantive quality of investment standards on public or private offerings of securities. Any deal whether or not it is a security is actionable if it is fraudulent. Normally an element of any claim for fraud is justified reliance upon a representation or upon a failure to disclose information. But, in this case, it is hard to see how anyone could say that they were justified in relying on any representation in making a purchase because they were told that they were being cheated. So, it is hard to see how a fraud claim would be sustained here either. I'm not sure that this cleanly falls into the category of gambling either, even though there is money at stake and the outcome isn't entirely certain. This doesn't really seem like a game of chance to me. Indeed, viewed as performance art, this scheme might even be entitled to First Amendment protection. Ultimately, I would not prioritize a civil or criminal action against this enterprise either from the perspective of a private lawyer representing an investor, or from the perspective of a government enforcement authority. And, while I would be a little nervous about running this enterprise, I wouldn't be quaking in my boots. In a civil lawsuit, any award would probably be minimal, and in a criminal case there would probably be an extremely generous plea offered.
No Always assuming that the government has operated within the limits of its powers or, at least, that if they have exceeded those powers the excess was in good faith. First, there is the issue of sovereign immunity. Basically, a government can be held liable only when it consents to be held liable. Most governments never waive this with respect to their lawmaking powers because they have to be able to make laws in what they see as the public interest without fear of litigation. See, for example, cases on plain paper packaging of cigarettes. Second, most governments have the power to regulate commerce and to deal with public emergencies. There is an issue which comes up in Federations about which government has the power but even if a law is invalid, it does not follow that compensation is payable. It certainly isn’t if the law is valid.
Law, as such, is not a moral or a philosophical construct. It can be based on moral constructs and often it is. And, of course, the process of writing laws is often informed by philosophy. But law as such is neither one of those. Law is a set of behaviors which are known to be acceptable to the powers &quot;that be.&quot; This maybe an unsettling idea. But it is true nonetheless. The phrase that summarizes this is &quot;any law is only as good as its enforcement mechanism.&quot; What makes it seem untrue is that in the modern tradition laws are written down. And, when there is a need to resolve doubt as to whether something is illegal or not, they are carefully considered through a deductive process. Within countries, there is little question who &quot;the powers that be&quot; happen to be. But when it comes to laws governing actions between nations, it is more complicated. Yes, treaties make it clear, ahead of time, what types of expectations exist. Predictability (even in war) allows for long-term planning. And even laws of war are usually followed because wars are fought with the expectation that at some point they will end. And predictability allows to set end-goal conditions. Notably, entities which have no clear end-goals in sight are the ones least likely to follow any laws. The idea of any group of countries sitting in court of another group of countries is mostly a political theater. There is no possibility of predictable outcomes from entities which have not made commitments to those outcomes. So whether some countries have to follow &quot;laws&quot; set out for them by other countries (or non-government entities) is largely a result of those countries or entities being in positions of power to dictate their will. This is not the same as international laws being strictly de facto. Agreed-upon restrictions and restrictions which have been dictated from the top-down, by those with more power, are de jure because they create predictable boundaries on behavior. De facto restrictions are the ones which have come to be the case without any prior agreement or fiat.
In general it is illegal to gamble on life. However, you might not even need to go to a bookmaker: A contract that pays money upon the death of a specific person is known commercially as "life insurance." In order to avoid the moral hazard (or reality) of creating a contract killing market, it has long been illegal to trade life insurance with any person or entity who does not have an "insurable interest" in the insured. (See also: The Insurable Interest Requirement for Life Insurance, by Peter Swisher, who also has a good review of laws and regulations surrounding exceptions to the rule like viaticals and STOLI. Further reading on the subject here.) I don't know if it has been tested, but I think anyone could argue that they would face a significant financial loss if the U.S. President were killed or died in office: the stock markets plunged on JFK's assassination. Therefore, it could be both legal and possible for anyone to buy life insurance on the U.S. President. (Note that, in the U.S., the disputes about third-party life insurance have revolved for generations around the tax benefits associated with insurance premiums and benefits. See corporate-owned life insurance (COLI), a.k.a. "janitor's insurance.")
Part answer to Q1: Is my conceptualization correct? No, insofar that your Points 1 to 4 are all &quot;completely illegal&quot; regardless of how the authorities deal with them, and the rest are not, on the face of it, crimes but presumably civil wrongs (which can be dealt with by, for example, fines or restraint / good behaviour / banning orders etc without one having a &quot;criminal conviction&quot;). Also: if the authorities, for whatever reason, decide against dealing with crime then it hasn't been &quot;decriminalised&quot; - that is the remit of the law makers, not the law enforcers. It's still a crime but with a lower political/ operational etc priority.
While there are certainly statutory and procedural vehicles for sanctions, they are almost never requested or allowed when moved for, and are almost never imposed by judges. Something very severe needs to occur and not just your typical discovery violation ("speaking objections" during depositions, being late with responses, failure to cite to affidavits, affidavits citing conjecture rather than fact, et). It would have to be something quite serious....like misleading the court or directly failing to comply with a direct order or ruling on a motion. It is exceedingly rare. It is most seen in Federal Court.