Court of Justice of the European Union finds that notary authentication does not fall under legal advisory services ban

The Court of Justice of the European Union issued a judgment in case C-109/23 (Jemerak) where it indicated that “A notary does not breach the sanctions against Russia when he or she authenticates the sale of a property owned by an unlisted Russian company”. (Court press release)

The request for CJEU ruling related to the interpretation of Article 5n (2a) of the Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures against Russia, which prohibits the provision of legal advisory services to the Government of Russia or legal persons, entities or bodies established in Russia.

Facts of the case

A Russian company, headquartered in Moscow, which since 2013 owned the property registered in Berlin, Germany, decided to sell that property in 2022. The German Law requires authentication of a contract for the sale of immovable property by a notary.

A notary practicing in Germany refused to authenticate and perform the contract for the sale of that apartment on the grounds that such authentication would violate the prohibition set out in Article 5n(2a) of the Regulation 833/2014. 

The legal advisory services ban was introduced by the European Union in 2022 with a view to increase pressure on Russia to end the war in Ukraine.

According to the Council Regulation (EU) 2022/1904 of 6 October 2022, “ ‘Legal advisory services’ covers: the provision of legal advice to customers in non-contentious matters, including commercial transactions, involving the application or interpretation of law; participation with or on behalf of clients in commercial transactions, negotiations and other dealings with third parties; and preparation, execution and verification of legal documents. ‘Legal advisory services’ does not include any representation, advice, preparation of documents or verification of documents in the context of legal representation services, namely in matters or proceedings before administrative agencies, courts or other duly constituted official tribunals, or in arbitral or mediation proceedings”. Although the notary services are not explicitly mentioned as being legal advisory services, a notary in Berlin thought that it could not be ruled out that authentication of the document would violate the EU ban on the provision of legal advisory services to legal persons established in Russia.

The matter went first to court in Berlin, but the Berlin Regional Court referred those questions to the CJEU.

Court of Justice of the European Union ruling

On 5 September, the CJEU issued a judgment which stated that:

• Authentication of a contract for the sale of immovable property belonging to a legal person established in Russia is not covered by the ban on providing legal advisory services to such persons.
• The notary “seems to act not for the purpose of promoting the specific interests of either of the other or the two parties concerned, but in an impartial manner, at an equal distance from those parties and their respective interests, solely in the interests of the law and legal certainty”. By authentication, a notary performed a public function entrusted to him by the State which did not appear to involve the provision of legal advice. Furthermore, other tasks carried out by the German notary, including payment of the price of the sale to the seller and transfer of ownership to the land register, also do not appear to involve the provision of legal advice.
• Finally, the translation services provided by an interpreter during such authentication in order to assist a person who is not proficient in the language of the authentication procedure also do not fall under the legal advisory services ban.

If you have any questions arising from this blog, please do not hesitate to contact us for advice, or send us an e-mail. Don’t forget to follow us on X, Facebook, Instagram, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2024