UN URGES SANCTIONS COMMITTEE TO SANCTION PERPETRATORS OF SEXUAL VIOLENCE IN ARMED CONFLICT

The United Nations Security Council has unanimously adopted a resolution urging UN Sanctions Committees to apply targeted sanctions against people who perpetrate and direct sexual violence in conflict.  It has urged the Committees to do so when adopting or renewing targeted sanctions in situations of armed conflict, and to consider adopting designation criteria pertaining to acts of rape and other forms of serious sexual violence.

Angelina Jolie, who has been Special Envoy of the UN High Commissioner for Refugees for the past year, made a speech In the Security Council: “I understand that there are many difficult things for the Security Council to agree on.  But sexual violence in conflict should not be one of them”. The  text of resolution 2016 (2013) is here.

UK SUPREME COURT QUASHES ORDER AGAINST BANK MELLAT

The Supreme Court of the United Kingdom has held that an Order made by HM Treasury in 2009 imposing financial restrictions on Bank Mellat was unlawful.  A link to the judgment is here: [2013] UKSC 39.

In 2009, HM Treasury made an Order, pursuant to the Counter Terrorism Act 2008, that ‘all persons operating in the financial sector’ should not to ‘enter into, or … continue to participate in, any transaction or business relationship’ with Bank Mellat.  The effect of this Order was to shut down the bank’s UK operations.

A majority of the Supreme Court (sitting in full formation, ie 9 judges) has quashed the Order on both substantive and procedural grounds, on the basis that:

(1)   (By majority of 5:4) The decision to make an Order against Bank Mellat was arbitrary, discriminatory and disproportionate to the statutory purpose of hindering Iran’s nuclear programme, because it singled out Bank Mellat but not other Iranian banks, yet the only reason accepted as valid was a general concern about the banking industry and not a particular concern about Bank Mellat.

(2)   (By a differently constituted majority of 5:4) The Order was vitiated by a unfair procedure because the Treasury failed to give the bank notice of its intention to make the Order or an opportunity to make representations. The Court found that common law fairness (which Parliament had not displaced) required that the Bank, as a body directly affected, should have had an opportunity to make representations before the Order was made.

All of the speeches make interesting reading. The following are some notable points.

First, in a separate judgment, the Court gave its reasons for holding (by a majority of 6-3) that it had jurisdiction to hold a closed hearing given that the statutory scheme did not expressly permit closed hearings in the Supreme Court, and for deciding (by a majority of 5-4) to exercise that jurisdiction in this case. See previous blog on this.  All of the judgments on this issue, which come hot on the heels of the Justice & Security Act, emphasis the crucial importance of open justice and the “obnoxious” exceptional nature of closed hearings.  All judges criticise the Government for not substantiating the need for a closed hearing in this case.  Lord Hope considered that by permitting a closed hearing without express Parliamentary approval the majority had “crossed the Rubicon” and that “secret justice at this level is not really justice at all”.

Second, on one view the Court’s reasoning goes further than the European courts in sanctions cases. For example, the European court has not said that it is discriminatory or disproportionate to single out one bank (if the criteria for designation are met), nor recognised that permitting the targets of restrictive measures to make representations in advance makes for better decisionmaking (good administration) as well as being fair.

Third, there are interesting dissents on all issues (whether the statutory scheme displaces common law fairness, whether the reasons were disproportionate, and so on), and a different majority of the Court on the substantive and procedural issues.

The Bank may now pursue an action for damages against HM Treasury.  The Order at issue in this case is distinct from the EU’s sanctions against Iranian nuclear proliferation which include Bank Mellat – the Bank won its case in Luxembourg (see previous blog) but remains listed in the EU because an appeal is pending to the ECJ.  HM Treasury has published a notice stating that this judgment does not affect the current EU asset freeze which remains in place against Bank Mellat.

THE EU COUNCIL MAY ONLY RELY ON MATERIAL IT TOOK INTO ACCOUNT AT THE TIME IT MADE ITS LISTING DECISIONS: HTTS v COUNCIL

195px-european_court_of_justice_insignia-svgHTTS Hanseatic Trade Trust & Shipping GmbH, a German shipping agency company, has won its 2nd action to annul its inclusion for the 2nd time in the European Union’s sanctions against Iran. In the first case about its designation (T-562/10) decided on 7 December 2011, the Court held that the reasons given for its  inclusion were too vague and contradictory. The European Council then re-listed HTTS, giving different reasons. Instead of saying (as it did the first time) that HTTS “acts on behalf of HDSL in Europe”, the second listing states that HTTS was was “controlled by” the Islamic Republic of Iran Shipping Lines and/or acts on its behalf, that HTTS is registered at the same address as IRISL Europe and its director used to be an IRISL employee.

The same judges of the General Court (the Fourth Chamber) have now annulled this second listing (Cases T-128 and 182/12 (not yet available in English)), holding that the European Council committed a manifest error in its assessment that HTTS is controlled by the IRISL or acts on its behalf. The most interesting aspects of the judgment are as follows.

First, the Court would not take into account press articles and other information put forward by the Council (and Germany, which intervened to support the Council) to try to justify HTTS’s designation. The Court said that it will only look at the material that the Council took into account at the time it made its listing decision. This may be an important finding, given the Council’s increasing use of press articles and other material in sanctions cases in the European court. The Court said that taking new material into account would permit the Council to substitute the grounds on which its decision was based, and would infringe rights of defence and effective judicial protection.

Second, the Court said the Council may only rely on a person’s past employment to try to show a connection with IRISL if it has established that a person still maintains ties with IRISL (which it had not shown here). And the fact that HTTS may have been registered at the same address as IRISL Europe did not show that HTTS was under IRISL’s “control”.

Third, as in the recent Iran Transfo case (see previous blog), the Court rejected the Council’s argument that there should be a less intensive standard of judicial review for sanctions measures against Iran as compared with counter-terrorist sanctions, since both regimes severely impact on the rights and freedoms of listed people and companies. In scrutinizing the Council’s decisions to include people (as opposed to the legal criteria themselves, where there is a less intrusive standard of review), the Court will (as it has been doing in recent cases) review the facts and evidence relied on by the Council to justify a designation.

There are currently pending in the General Court a number of applications for annulment by IRISL and by a number of companies and individuals listed on the grounds of alleged connections with IRISL.

ECJ HOLDS THAT CHAFIQ AYADI HAS A CONTINUING INTEREST IN HIS EUROPEAN COURT PROCEEDINGS

195px-european_court_of_justice_insignia-svgA few days after the Grand Chamber of the European Court of Justice held in Abdulrahim  that people de-listed from EU sanctions lists in the course of proceedings still have an interest in their actions for annulment continuing (see previous blog), the ECJ has applied the same principle to Chafiq Ayadi, a resident of Ireland who was listed and de-listed by the UN Security Council 1267 Committee (and consequently by the European Union) at the same time as Yassin Kadi. 
 
Mr Ayadi’s appeal against the General Court’s judgment in his case has succeeded for the same reason as Mr Abdulrahim’s – his interest in the annulment proceedings continues, in order to allow him to try to obtain a declaration from the Court that he should never have been included on the list, and thereby obtain some form of reparation and rehabilitation. Mr Ayadi’s case has now been referred back to the General Court for it to rule on his application for annulment.

EU ECONOMIC SANCTIONS ON SYRIAN REGIME TO CONTINUE UNTIL JUNE 2014

Flag_of_Syria_svgThe European Union Council has extended economic sanctions against the Syrian regime until June 1, 2014.

The sanctions impose EU wide assets freezes and travel bans on 179 people and 54 entities alleged to be associated with the violent repression in Syria. These targeted measures supplement existing export and import bans, an oil embargo and restrictions on investments, financial activity and the transport sector. At the same time, the EU has relaxed rules to allow EU governments to authorise the provision of banking services to opposition groups in Syria, provided such services do not breach the Council’s restrictive measures.

The Council’s decision came into effect on 1 June 2013 when these measures were published in the EU Official Journal.