Russian shipowner plans to challenge EU sanctions in court

Volga Shipping Company announced that it has sold its tanker fleet in 2023 and will no longer transport bulk cargo.

The Russian shipowner wants to sue the EU for putting it on the sanctions list, TradeWins reports.

The shipowner claims that its tankers have not transported oil for two years.

Last month, the EU added Volga Shipping Company, which has a fleet of more than 200 sea and river cargo vessels, to a sanctions list for being a “significant source of revenue” for the Russian government.

The EU notice states that the company operates vessels that “transport crude oil and petroleum products by sea, including for export,” a claim disputed by the Nizhny Novgorod-based shipowner.

In August 2023, the company announced that it had completed the sale of its tanker fleet to seven different companies not affiliated with Volga Shipping Company and had terminated new contracts for the transportation of petroleum products in the first half of 2022.

The vessels were allegedly sold because the transportation of bulk and oil cargoes had been unprofitable for several years.

The company’s CEO, Pavel Vinogradov, stated that Volga Shipping Company would use “all available legal means to challenge unfounded accusations and other hostile actions aimed at harming its activities or discrediting the company’s image.”

Vinogradov said that the company, together with lawyers, was developing a “detailed action plan” to challenge the listing.

Volga Shipping Company operates small bulk carriers with a displacement of 3,000 to 7,000 tons, suitable for shallow ports on the Sea of ​​Azov and inland waterways in Russia, the report said.

Grain, coal and construction materials account for 83% of the company’s cargo, Vinogradov said, with 97% of all exports going to Turkey.

As of May, the company had 44 river-to-sea dry bulk vessels, 74 river dry bulk vessels and 88 river barges, according to its annual results published last month.

The British government also added Volga Shipping Company to a sanctions list last month, but did not mention oil transportation. Britain said the company “does business in a sector of strategic importance to the Russian government, namely the transport sector.”

Volga Shipping is a Russian ship-owning company under UCL Holding and is wholly controlled by Vladimir Lisin’s Fletcher Group Holdings Ltd. Forbes named Lisin the third richest person in Russia in 2021 with a fortune of $26.2 billion.

In April 2022, the Australian government imposed sanctions on Lisin, but he was not personally targeted by the US, UK or EU sanctions regimes.

The EUobserver media organization, which first reported the company’s appeal, said that Ukraine was trying to convince the EU to impose sanctions on Lisin in the next round of sanctions. According to Ukrainian officials, Lisin’s Novolipetsk Metallurgical Plant supplied metal used to produce Russian drones, a claim the company denies.

USM previously reported that Russia’s Sovcomflot had suffered losses of almost $400 million due to the sanctions.