Dutch oil trader challenges EU sanctions, cites disinformation campaign

Niels Troost is the only European to be sanctioned for selling Russian oil

Dutch oil trader Niels Troost challenges EU sanctions, claiming they were based on disinformation spread by a former business partner amid a bitter dispute.

Niels Troost, the only European to be sanctioned for selling Russian oil, has brought a suit at the EU's General Court to have the ruling overturned on the grounds that the European block acted on disinformation disseminated by a former business associate, The Financial Times reports.

Disinformation allegations and acrimonious dispute

Troost's lawyers assert that the EU imposition of sanctions in December 2023 was brought about by a series of false allegations made by his former partner, Gaurav Srivastava. According to court papers, Troost and Srivastava had been in a "toxic and bitter dispute," and Srivastava had circulated false information with the aim of ruining Troost's reputation.

The reports indicate that Srivastava falsely represented that he was secretly working with the CIA and promised Troost that he could obtain a US Treasury licence in order to ensure legal trade with Russia. Troost ended his business partnership with Srivastava in May 2023 after he made the discovery of the purported fraud and now claims that his erstwhile partner planned a campaign of misrepresenting his business activity.

Troost's attorneys claim that his trading firms ended all Russian oil business at least 15 months prior to the EU sanctions. They also argue that a ship chartering firm associated with Troost in the EU sanctions list had been sold six years prior.

The EU's case against Troost relies on publicly available documents, media coverage, and intelligence from different sources. The evidence file contains articles from several publications, a screenshot of a company website, and corporate intelligence reports. Legal experts, however, contend that in past cases, EU courts have reversed sanctions when the evidence was found to be inadequate.

EU's rationale for sanctions

The EU penalised Troost based on the fact that his Geneva-headquartered firm, Paramount Energy and Commodities SA, and its Dubai subsidiary, Paramount DMCC, continued to sell Russian crude over the $60-per-barrel price cap imposed in December 2022.

Whereas it is confirmed that Paramount DMCC sold Russian oil following the announcement of the cap, Troost asserts the subsidiary was self-governing and not liable to EU rule. He avers that all Russian oil dealings by Paramount DMCC ended in June 2023 after establishing Srivastava was no CIA agent but rather lacked US government backing.

Disputed ownership of ship-chartering company

Another important factor in the EU's decision was Troost's reported connection to Livna, a Hong Kong ship-chartering firm that has been accused of shipping Russian crude over the price cap. The EU cited a 2014 website registration in Troost's name as proof of his association with Livna.

Troost's attorneys counter that he sold Livna in 2018 to a director of Paramount, Michael Chang, and has since had nothing to do with it. They say shipping records show Livna went on chartering ships for Paramount after the sale, but Chang says that is all Troost had to do with Paramount after the sale.

Srivastava denies claims

Though Troost contends Srivastava was involved in the EU's sanctions decision, Srivastava responds saying that several government organisations have made independent conclusions that Troost was guilty of violating sanctions.

"Troost spun this fantasy about being defrauded by an imaginary CIA spy to deflect his sanctionable conduct," Srivastava said in an interview with The Financial Times. "Gussying up the same lies repeatedly doesn't make them fact."

Broader effect of EU sanctions

Since Russia launched its all-out invasion of Ukraine, the EU has imposed sanctions on almost 2,400 people and companies associated with the Kremlin. Though more than 100 people have tried to cancel these sanctions, most legal complaints to date have supported the decisions of the EU.

Troost, first sanctioned by the UK in February 2024 and later by Switzerland, is one of only nine EU citizens targeted by the bloc's measures over the war in Ukraine. His case now joins a growing list of legal battles over the legitimacy of EU-imposed sanctions.