The only European sanctioned for trading Russian oil has petitioned a top EU court to overturn the decision, claiming the bloc’s actions were influenced by disinformation spread by a former business partner.
In court papers filed at the EU’s General Court in February, lawyers for Dutch trader Niels Troost wrote that their client’s companies had ceased all involvement in Russian oil at least 15 months before the EU decision and that a ship chartering business cited in its sanction listing was sold by Troost more than six years ago.
Troost’s lawyers argued that the EU’s decision in December appeared to have been influenced by disinformation spread by his former business partner, Gaurav Srivastava, with whom they said Troost was engaged “in a toxic and bitter dispute”.
The Financial Times reported last year that Srivastava had allegedly claimed falsely that he was a covert operative working with the CIA and promised to secure Troost a licence from the US Treasury to allow his companies to legally trade with Russia after its full-scale invasion of Ukraine.
Troost terminated the partnership in May 2023 having identified the alleged deception and has since accused Srivastava of pursuing a campaign to destroy his reputation by exaggerating his links to Moscow.
“Disinformation pushed by bad actors such as Mr Srivastava seeks to distort facts, influence decisions, harms credibility and impacts the effectiveness of the sanctions themselves,” the court filing states.
Srivastava denies claiming to work with the CIA or spreading disinformation and has described Troost to the FT as “a rogue trader in [Vladimir] Putin’s pocket”.
EU sanctions decisions are largely based on publicly available records and media reports and so far the bloc has sanctioned almost 2,400 individuals and entities in relation to Russia’s invasion of Ukraine. According to the European Commission, more than 100 people have sought to overturn the decision, with most of these cases still ongoing.
In some cases, the court has ruled that the evidence compiled by the EU was insufficient to justify the listing. But EU foreign policy spokesperson Anitta Hipper said that of court rulings so far, “the vast majority” had been in favour of the EU.
The EU evidence file against Troost, seen by the FT, contains eight media articles, including two by the FT, a screenshot from Troost’s company’s website, publicly accessible domain name data, four public reports by non-profit groups, two blog posts by corporate intelligence firms and an excerpt from a Swiss corporate database.
Hipper said that sanctions decisions were made by the council of EU member states “on the basis of all information it has been made aware of” and that it reviewed the sanctions listings regularly.
The EU’s sanctioning of Troost cites his ownership of Geneva-based Paramount Energy and Commodities SA and a Dubai-based subsidiary, Paramount DMCC, which it said had continued to trade Russian crude at prices above $60 a barrel after an EU-backed price cap was announced in December 2022.
As the FT reported in March 2023, Paramount DMCC did continue to trade Russian oil after the cap was introduced. Troost’s lawyers have argued that it operated independently of Paramount SA and that UAE-subsidiaries of Swiss parent companies were not required to comply with the EU rules.
Board meeting minutes show Paramount DMCC was instructed to cease all Russian trades in June 2023. Troost has said he did this as soon he decided that Srivastava was not a CIA operative and that Paramount DMCC did not have US government support.
In addition, the EU sanctions listing said Troost was “affiliated” with a Hong-Kong registered ship-chartering company called Livna, which it accused of trading Russian crude above the cap. The EU evidence file against Troost includes screenshots showing he registered a website for Livna in 2014 but has no information about the ownership of the company.
Troost’s lawyers sent documents to the EU court and to the FT showing that their client sold Livna to one of its directors, Michael Chang, in 2018. Shipping records show that Livna continued to charter ships for Paramount after 2018 but Troost did not have “any role in Livna’s operations, ownership or management”, the lawyers said in the filing.
Contacted by the FT, Chang said he had been a director of Livna since 2014 and acquired 100 per cent of the business in 2018 when he wanted to expand its activities and Troost decided he no longer wanted to be in shipping. Under the terms of sale, Paramount agreed to keep using Livna to charter vessels and Troost was paid the full market value for the shares, he said.
Chang rejected that Troost had remained affiliated with Livna, stating he had no involvement in its operations after 2018. He added that the EU statement that Livna had been “trading crude oil above the oil price cap” was also incorrect as Livna chartered ships and did not trade commodities.
Two months before the EU sanctioned Troost, representatives for Srivastava shared information with the FT that alleged ongoing ties between Troost and Livna. At around the same time law firm Orrick, Herrington & Sutcliffe, which is representing Srivastava in his commercial dispute with Troost, shared the same information with European officials. Orrick declined to comment.
In a statement to the FT, Srivastava said authorities rigorously investigated potential sanctions targets and corroborated information. “There is no disinformation campaign against Niels Troost. Three independent governmental investigative agencies have now reached the same conclusion — that he knowingly circumvented sanctions regimes to support Russia,” he said.
“Troost created the fairy tale that he was defrauded by a fake CIA spy to distract from his sanctionable activities. Repackaging the same false statements again and again doesn’t make them true.”
Troost was sanctioned first by the UK in February 2024 and has also been sanctioned by Switzerland. He is one of only nine EU citizens to have been sanctioned by the bloc over the Ukraine war.
Read the full article here
