FR

Russian sanctions – what is the impact for your association? 

Date : 14.03.22 Par : Alain Costantini

Many organizations and trade federations based in Brussels (hereinafter the “NPAs”) have been recently overwhelmed by requests from their members to take retaliatory measures against their Russian members. 

The question arose therefore as to whether the Articles of Association[1] of NPAs allowed to suspend or expel the Russian members on the grounds that their own country was at war with another country and/or violating provisions of international treaties or resolutions. 

From experience, it is reasonable to argue that the Articles of Association of NPAs do not explicitly provide for the right to suspend/expel a member because the country in which such member would be incorporated (i) would be at war with the country of another member organisation and/or (ii) would be violating some provisions of international treaties or resolutions passed by international organizations. These provisions are more likely to be found with international organizations setting up co-operation among countries, but not with NPAs.

As a result, from a strict legal point of view, if the provisions of the Articles of Association do not explicitly provide for suspension or expulsion of a member on those grounds[2], it would be hazardous for the Board of Directors of a NPA to suspend a Russian member or to recommend to the General Assembly to expel a Russian member.

The decision to suspend or expel a Russian member on these grounds could be in our opinion easily overturned by the suspended/expelled Russian member if the Russian member decides to bring the case in front of a Belgian Court/Arbitral Tribunal. Indeed, the suspension or expulsion would lack any legal grounds and could be considered as abusive and illegal.

However, this does not preclude the Board of Directors of the NPAs from engaging talks with the Russian member(s) to verify whether they would be ready (including their representatives at the level of working groups or committees) – on a voluntary basis – either to resign or at least to suspend their participation to any activities of the NPA, for a defined period of time that can be renewed or extended.

But if the Russian member(s) or its/their representative(s) do not accept to resign or suspend their activities with the NPA, there is no way to legally force them to step aside. As the case may be, the NPA could decide to amend its Articles of Association for the future to encapsulate such situation, but this seems to be a far-reaching or at least a premature decision.

We are conscious that the current situation might result in decisions driven by emotions and compassion. But from a strict legal point of view, our opinion is that NPAs will find themselves in dire straits if they engage in a suspension or expulsion process based on legal grounds that are not – at least explicitly - contained in their Articles of Association.

 

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[1]  The increasing number of questions raised is also to be found in the heavily publicized additional measures taken by the EU against some Russian individuals considered as being close the Russian regime (as well as against the companies they control). Indeed, since 2014 and the annexation of Crimea by Russia, the EU has taken several types of sanctions against the Russian government, but also again some Russian companies or individuals. The recent war in Ukraine has led the EU authorities to take additional measures, supplementing the measures already taken. For more details, see namely:

(i)                   Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine ;

(ii)                  Council Decision 2014/145/CFSP of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine ;

(iii)                 Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine. 

(iv)                 Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine.

 
[2]              The Articles of Association of some NPAs provide for the right to suspend/expel a member in the case of a behaviour “that may harm the interests and/or the reputation of the association”. As to whether the circumstance that a member (i) would be incorporated in a country at war with the country of another member organisation and/or (ii) in a country that would be violating some provisions of international treaties or resolutions passed by international organizations may be validly considered as a behaviour “that may harm the interests and/or the reputation of the association” is doubtful and must be cautiously analysed on case-by-case basis.

 

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