A ‘landmark' ruling for Russian officials

How a former governor of annexed Sevastopol shed his sanctions and regained access to the EU

Story by Andrey Pertsev. Translation by Sam Breazeale.

In late October 2022, the European Court of Justice annulled the EU’s decision to extend sanctions against Dmitry Ovsyannikov, the former Russian-installed governor of Sevastopol and Russia’s former deputy industry and trade minister.

The court cited the fact that Ovsyannikov no longer holds the position for which he was initially sanctioned. Despite the limited window to file an appeal, there have been no reports of any challenges to the ruling. As a result, the former Russian leader of an annexed Ukrainian city will now, it appears, be able to enter the EU freely and even do business in the West.

‘He considers himself a czar’

Dmitry Ovsyannikov became the head of Russian-annexed Sevastopol in 2016. He was just 36 at the time, which made him the youngest governor (though initially he was just the acting governor) in what Russia considers to be its territory.

Ovsyannikov’s appointment was preceded by a fierce fight for political power in Crimea’s largest city. The previous governor, Admiral Sergey Menyailo, had a falling out with Alexey Chaly, the city’s legislative assembly speaker, and accused him of “arrogance and incompetence” while openly seeking his resignation.

To neutralize the standoff, the Putin administration decided to replace Menyailo, who was accustomed to a military management style, with a “technocrat who had no experience in politics.” Before his appointment as Crimea’s acting governor, Dmitry Ovsyannikov worked as the head of the Russian Industry and Trade Ministry’s Regional Industrial Policy department, and before that, he held several leadership posts in various defense enterprises that belonged to the state-owned technology conglomerate Rostec. Even earlier, in the early 2000s, he worked as the main federal inspector (GFI) for two regions in the Volga Federal District. According to Meduza’s sources, however, that can hardly be called political experience.

“GFIs don’t have any serious influence over [political] processes in the regions. Their work is clerical: they record what’s happening in local politics and send reports to the presidential administration. They’re not politicians, they’re bureaucrats,” a source close to one of the presidential envoy’s offices told Meduza.

At the time of Ovsyannikov’s appointment, Sergey Kiriyenko, who currently serves as the Putin administration’s First Deputy Chief of Staff, was the Presidential Envoy to the Volga Federal District. According to a source who knows Ovsyannikov personally, however, Ovsyannikov was never close to Kiriyenko, and it wasn’t the former envoy who lobbied for Ovsyannikov to be appointed Sevastopol governor; it was Rostec, which had its own interests to worry about in the annexed city.

After taking office, Ovsyannikov, hoping to avoid Menyailo’s mistakes, did his best to gain the support of city legislative assembly speaker Alexey Chaly. Initially, it seemed to work. Oleg Gasanov, a member of Sevastopol’s Civic Chamber (and a political opponent of Chaly), told Meduza that Ovsyannikov’s first year as governor was something of a “honeymoon phase.” Chaly supported Ovsyannikov in the 2017 elections, and the new governor officially won 71 percent of the vote (the EU sanctioned him shortly after).

At that time, Chaly and other local politicians seemed to have no problem with Ovsyannikov’s staffing approach, which consisted of hiring numerous “outsiders” from various parts of the country based on the Kremlin’s “recommendations.”

It was through those “recommendations” that Vyacheslav Gladkov, the former mayor of the closed Russian city of Zarechny, became Sevastopol’s deputy governor. Two sources close to the Putin administration told Meduza that Gladkov was the “protégé” of one of Sergey Kiriyenko’s closest supporters, senior Kremlin official Alexander Kharichev, who coordinates electoral campaigns at various levels. From 2013 to 2017, Kharichev worked for Rosatom (which Kiriyenko led at the time), and the primary employer in Zarechny, where Gladkov was mayor, was a Rosatom production center.

“Gladkov was supposed to manage the 2017 gubernatorial elections and the 2018 presidential elections. He did a pretty good job,” a source close to the Kremlin’s political bloc noted. (Both Ovsyannikov and Vladimir Putin won their respective races in Sevastopol, according to official vote counts.)

At the same time, a source close to Gladkov himself said that the relationship between Ovsyannikov and his deputy got off to a rocky start:

Ovsyannikov felt that Gladkov had been forced upon him; he quarreled with him, and Gladkov wrote resignation letters multiple times. On the other hand, Ovsyannikov was afraid to offend one of Kiriyenko’s guys, so he tried to persuade Gladkov to stay… After the presidential elections, though, he was able to leave.

A source who knows Ovsyannikov, meanwhile, told Meduza that the fact that the fact that Gladkov and Ovsyannikov “quarreled” doesn’t mean much, because Ovsyannikov can be difficult for anyone to get along with: “He considers himself a czar and a god when it comes to his subordinates. If something’s not quite right, he starts screaming and ripping up papers.”

Over time, Ovsyannikov’s relationship with Chaly deteriorated. According to Meduza’s sources, Chaly wanted to exercise significant influence over politics in the city, but Ovsyannikov, like Menyailo before him, was unwilling to share power.

In early 2018, deputies loyal to Chaly began publicly criticizing Ovsyannikov for “appointing outsiders” to official posts, allowing natural areas to be developed and engaging in corruption. They drew attention to the fact that Sevastopol authorities had sent two billion rubles (almost $30 million) to a small bank as an advance payment for the construction of a water treatment facility, and that the bank had shut down two weeks later. The construction contract was ultimately declared unlawful, and the head of the city’s construction department, Mikhail Tarasov, was sentenced to seven years in prison.

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In the summer of 2018, Andrey Turchak, the general secretary of the ruling United Russia party, visited Sevastopol in an attempt to “patch things up” between Ovsyannikov and Chaly, but he had little success. Then, that September, city officials refused to provide a budget performance report for the first half of the year to city deputies, claiming that the legislative assembly’s oversight was being carried out “in violation of the law.”

“The governor continues to shake the foundations of state authority with great enthusiasm. It may be because he considers public funds to be his own, while residents, in his view, should only do the things he wants them to. But I think he’s making a mistake. He’s a far cry from a Sun King,” Alexey Chaly said at the time.

In the spring of 2019, Ovsyannikov’s critics tried (unsuccessfully) to organize a recall referendum to force his resignation. During that period, Chaly referred to the city government as an “organized crime group,” while local businessmen publicly accused the governor’s team of asset-grabbing.

As a result, in the 2019 local parliamentary elections, Chaly ran on an extremely simple platform: he promised to “remove” Ovsyannikov from the governorship if he won. The threats worked — Ovsyannikov resigned, and in return, Chaly withdrew from the race.

A ‘minor character’ with a potentially big legacy

After his resignation, Dmitry Ovsyannikov returned to work in Russia’s Industry and Trade Ministry, where he was promoted to deputy minister and oversaw industrial development in various regions, including in Crimea. In the end, though, he spent only a few months on the job: in April 2020, he was fired after he refused to show his documents or a ticket at an airport in Izhevsk and cursed at workers, causing a public scandal.

In the years since, Ovsyannikov hasn’t held any government positions. And in December 2020, the former Sevastopol governor submitted a claim asking the European Court of Justice to lift the sanctions against him, stressing that the restrictions prevented him from doing business in the EU.

In his complaint, Ovsyannikov noted that he hasn’t held public office for a long time, and that the sanctions were causing him “real harm.” The court found his arguments convincing.

A source close to the Russian government told Meduza that the European Court’s ruling could be a “landmark” moment for Russian officials: “It shows the mechanism by which the sanctions work. If they sanctioned you because of your position, leave and try to get them removed. For officials, this is potentially interesting. Especially if they’re not [directly] involved in the war.”

One source close to the Putin administration told Meduza that Ovsyannikov was a “minor character.” But a source close to the Kremlin said that the EU’s removal of the sanctions against the former governor may turn out to be “important in the future.” Ovsyannikov himself did not respond to Meduza’s questions.

Story by Andrey Pertsev

Translation by Sam Breazeale