The Council of the EU has today renewed for another year its sanctions on Burma/Myanmar, and on people and companies said to be “responsible for serious human rights violations” in Iran (which is separate from the list of those said to be connected with Iranian nuclear proliferation).
The EU has also lifted the arms embargo previously imposed on the Republic of Guinea.
The new provisions (published on 15 April 2014) are here and on the sanctions in force section of this blog. The Council has also published Notices for the attention of everyone re-listed in the annex to these provisions informing them that they have two months in which to challenge their designations in the European court.
The Council of the European Union has today added 4 people to the list of individuals whose assets are frozen in the EU on the grounds that they are “subject to investigation in Ukraine for involvement in crimes in connection with the embezzlement of Ukrainian State funds and their illegal transfer outside Ukraine.”
They are Serhiy Arbuzov (former Prime Minister of Ukraine), Yuriy Ivanyushchenko, Oleksandr Klymenko (former Minister of Revenues and Charges) and Edward Stavytskyi (Former Minister of Fuel and Energy of Ukraine).
The EU originally imposed these sanctions relating to Ukraine on 21 individuals on 17 March 2014, reported here. The UK Treasury notice implementing these changes is here. The new EU Regulation and Decision are here, and on the sanctions in force section of this blog. The Council has also published Notices for the attention of everyone re-listed in the annex to these provisions informing them that they have two months in which to challenge their designations in the European court.
The USA yesterday (11 April 2014) added another 7 people and 1 gas company to its Russia sanctions list, whom it says are “contributing to the situation in Ukraine”. The US Treasury’s press statement is here and the new list here. All the individuals are already sanctioned by the European Union.
We previously reported that the USA (as well as the European Union) had imposed these sanctions initially on 11 people by Executive Order of March 6 then added 20 more and a bank pursuant to another Order on March 17th.
The US Treasury states that these individuals are being sanctioned for “being responsible for or complicit in, or having engaged in, actions or policies that undermine democratic processes or institutions in Ukraine, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine, or misappropriation of state assets of Ukraine or of an economically significant entry in Ukraine; or having asserted governmental authority over any part or region of Ukraine without the authorisation of the Government of Ukraine. The Under Secretary for Terrorism and Financial Intelligence, David Cohen, said: “Crime is occupied territory. We will continue to impose costs on those involved in ongoing violations of Ukraine’s sovereignty and territorial integrity”.
We previously reported that the House of Lords (Sub-Committee C – External Affairs) took evidence in February on EU restrictive measures. A transcript of the evidence given to the Committee by Philip Moser QC and Maya Lester is available here.
The Foreign and Commonwealth Office asked for its own evidence given that day to be kept confidential in a closed session. The Committee asked the FCO to supplement its evidence with open evidence in writing, which the FCO has now done by means of a letter from the Europe Minister, the Rt Hon David Lidington MP, published today, available here.
The Minister’s letter describes the recent sanctions cases before the European Court of Justice, and states that the loss of cases by the Council of the European Union is “concerning” – “growing case law from adverse judgments risks constraining our ability to use sanctions in the long term”. The Minister states that he remains “convinced that in the overwhelming majority of cases, the original listings were fully justified and proportionate to the objectives of the sanctions regimes”, which is why he says the EU amended the legal criteria in order to ensure that Iranian banks remained designated.
The letter states that the FCO is examining ways to improve listing procedures, including by sharing sufficient unclassified information with the designated people, and “a mechanism to allow us to share confidential information with the Court in the case of challenge” – see yesterday’s blog on this proposal.
The Minister states that he does not think that the UN Ombudsperson for the Al Qaida Committee is a “practical answer to the problem of due process” and that her remit is unlikely to be extended to other sanctions regimes in the foreseeable future. In his view, judicial review by the European court of EU measures implementing UN resolutions (such as in the Kadi case) “do threaten to create a conflict between EU member states’ obligations under the UN Charter and EU law”.
We previously reported that the European Court of Justice has been considering a proposal from the General Court (the first instance European court in Luxembourg) to enable the EU institutions to rely on undisclosed evidence in actions for annulment, in particular in sanctions cases. The new draft of the General Court have now been sent to the Council of the European Union for approval, and have been published here.
The European Court has so far held that rights of defence and effective judicial review do not permit the Council of the EU to rely on reasons for including an individual on EU restrictive measures unless the Council discloses the reasons and evidence to the designated person / company (see e.g. Kadi 2). Chapter 7 of the new draft rules proposes to change this position, by means of an exception to the “adversarial principle… under which all information and material must be fully communicated between the parties”. Then new procedure would permit a party (such as the Council) to submit that the communication of certain evidence would “harm the security of the European Union or its Member States or the conduct of their international relations”, and for the Court to take the material into account (having “weighed up” a number of factors) without it being disclosed to the other party. In assessing that material, the Court will “take account of the fact that a main party has not been able to make his views on it known” and “has not been fully able to exercise his rights of defence”.
These new proposals may diverge from Article 6 of the European Convention on Human Rights (the right to a fair hearing) as interpreted by the European Court of Human Rights and House of Lords, which requires an “irreducible minimum” level of disclosure; individuals must be given sufficient information to enable them to give effective instructions in order to refute allegations against them (even if the supporting evidence can not be disclosed), even where it would be damaging to national security to disclose that “irreducible minimum”. Although the comments on the draft rules say that they are “to a large extent based on” the ECJ’s Kadi and ZZ judgments, both of those judgments required disclosure of the “essence of the grounds” (i.e. an irreducible minimum) which the new draft rules do not require.
We also reported that a number of prominent organisations in the UK had written to the President of the Court of Justice suggesting that the Court should consult on this proposed rule change given the potential impact on “the rule of law, natural justice and rights of defence”. The President of the ECJ replied saying that the procedure for amending the Court’s rules did not provide for a public consultation. In answer to a parliamentary question from Lord Pannick QC in the UK, the senior Minister for Foreign and Commonwealth Affairs said that when published, the Government “will scrutinise the proposals in detail”.
On 2 April 2014, Switzerland’s Federal Council announced that it was not adopting the same approach to sanctions arising from the Ukraine crisis as the EU, and would instead introduce measures to prevent the circumvention of international sanctions connected with Ukraine. The Council announced that it would “take all measures necessary to prevent Switzerland from being used to evade any of these sanctions.” The new measures came into force at 18.00hrs on 2 April 2014.
As a result, financial intermediaries based in Switzerland may no longer enter into new business relationships with the 33 individuals who have been made subject to financial sanctions and travel bans in the EU. The Federal Council stated that its intention was “to prevent creating the perception that Switzerland’s financial centre could benefit from the EU sanctions.” The listed persons are not permitted to transfer to Switzerland assets that they hold outside the EU.
Although existing business relationships involving those listed are not subject to the restrictions, they must be reported to the State Secretariat for Economic Affairs (“SECO”) immediately, with details of beneficiaries, the nature of the business and the value. The Federal Council noted that the travel restrictions imposed by the EU also have effect in Switzerland due to the Schengen Association Agreement.
On 27 March 2014, the US State Department announced that it had blocked all exports of defence equipment and related services to Russia. On the same day, the US Commerce Department announced that it was suspending all licences that were not granted by 1 March 2014.
US companies need government approval to export goods that may be used for a military purpose. The State Department oversees licenses for military equipment, while the Commerce Department controls permits for commercial items that may also have a military application (“dual-use products”).
According to the Commerce Department’s annual report, $1.5 billion worth of dual use exports were licensed by the US to Russia last year, many used in the oil and gas industries.
The United National Sanctions Committee added Hani Yusef’s name to the list of people whose assets are frozen because they are said to be associated with Al Qaida, in 2005. A month later, the European Union added him to the EU terrorist asset freezing list in Regulation 881/2002.
In 2010 Mr Yusef won judicial review proceedings in England (in a case that went to the Supreme Court), declaring that the UK legislation designating him was unlawful (HMT v Ahmed & Youssef)  UKSC 2 & 5.
The General Court of the European Union has now held that the European Commission failed to fulfil its obligations and Mr Yusuf’s rights of defence in respect of his EU listing; Case T-306/10 Yusef v Commission (21 March 2014). The Commission’s principal errors were in failing to follow the procedures set down by the European Court in the Kadi cases (see previous blog). Instead of reviewing the reasons given by the Sanctions Committee carefully and impartially, the Commission had incorrectly continued to regard itself as being strictly bound by the findings of the Sanctions Committee. The Commission also failed to take into account the fact that the United Kingdom had made clear in 2009 that it no longer considered that there were grounds for listing Mr Yusef.