UAccording to the plans of Federal Economics Minister Robert Habeck (Greens), companies suffering from the sanctions against Russia should receive state support – but only if they lose a significant amount of sales as a result. It is clear that the measures that have been decided will also have indirect consequences for the German economy, said a spokeswoman for the ministry on Monday. “These cannot be avoided with such a comprehensive package of sanctions.” If a company is severely affected and “it would almost be brought to its knees in view of the current sanctions and the current situation, then it is absolutely clear that you have to help here”. At the same time, the ministry also emphasized: “EU sanctions do not entail any obligation to pay compensation.” In other words, the companies should not hope to be compensated for every deal with Russia that is no longer possible.
Habeck had announced the sanctions on Sunday. “So we will take similar protective measures for the areas of the economy that may be affected by sanctions as we did in the corona pandemic,” he said. In the pandemic, companies receive support if they can demonstrate a drop in sales of at least 30 percent. Depending on the extent of the reduction, the federal government then assumes part of the operational fixed costs. At the end of 2020 there was already a phase in which a sales replacement was paid. In total, the federal government has so far transferred corona grants totaling 78 billion euros to companies.
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It is still unclear which requirements companies must meet in order to receive sanctions assistance and how this should be structured. Habeck’s spokeswoman also did not comment on the planned size of the household on Monday. Federal Finance Minister Christian Lindner (FDP) has already made it clear that not all the consequences of the sanctions can be cushioned. “It will not be possible for the state to take on all the financial consequences of the sanctions and the tension with Russia, let alone compensate for them, but it will only be possible to take precautions for individual areas or for consequences such as inflation,” he said on Sunday on ZDF. “An individual compensation – that is not financially feasible.” Economically, the effects are manageable because the bilateral trade volume with Russia is not that large.
Exceptions possible
The chances of German companies being legally compensated for economic losses due to the sanctions are slim. In principle, companies bear the risks of foreign business themselves. Of course, business people who are affected by sanctions do not have to put up with injustice. But so far there is no evidence that German courts or the courts of the European Union could evaluate the Russia sanctions as unlawful. In any case, legal scholars see no indication that the current sanctions packages are exceeding legal limits or that earlier judgments on economic sanctions are being disregarded.
In view of the massive violation of international law that Russia committed with the invasion of Ukraine, it seems unlikely that the principle of proportionality was violated. The western allies have also gradually tightened sanctions. Transitional periods are also provided for old contracts and certain exceptions are possible.
Claim of sacrifice remains controversial
In certain constellations, compensation is also conceivable in the event of lawful state action. But the Düsseldorf lawyer Thomas Heidemann, who advises clients on business in Russia and Eastern Europe, gives companies little hope in the current situation: “The courts are very cautious in these cases.”
In 1998, in proceedings regarding Iraq sanctions, the European court ruled out a claim for compensation in the event of lawful action, citing the business risks in crisis areas in particular and the general interest in securing peace. The plaintiff, the German planning group “Dorsch Consult”, had based its claim for compensation on the German theory of special victims, among other things. However, the assumption of a sacrifice claim is still very controversial. According to legal experts, this would not be a promising way for companies to be compensated for losses due to Russia sanctions.