Syrian sanctions on George Haswani annulled

The General Court of the EU has just annulled targeted sanctions on George Haswani, because the evidence the EU Council relied on in court did not provide any support for the reasons it had given for including him in the EU’s targeted sanctions on Syria – Case T-231/15 Haswani v Council [2017].  Mr Haswani was included for being an “important Syrian businessman”, co-owner of an engineering and construction company that has ties with the Syrian regime, for being an intermediary with the regime in oil contracts, and enjoying favourable treatment from the regime through Stoytransgaz, a Russian oil company.  The Court, after a detailed analysis of all the evidence put forward by the Council, concluded that the evidence it relied on was vague and general and did not substantiate the reasons given for his inclusion.

The Court rejected Mr Haswani’s claim for damages resulting from his unlawful EU listing because he had not demonstrated that the losses he claimed were caused by the imposition of EU sanctions. The Court also rejected his challenge to subsequent amended sanctions relating to him because he had not properly amended his pleadings to challenge those measures.

EU court rejects Bank Tejarat’s challenge to its re-listing

The General Court of the EU has dismissed another challenge to an EU decision to re-list an Iranian entity that won its challenge to its original sanctions designation.  A link to the judgment is here. The Court regularly now upholds decisions to re-list entities on the revised basis that they provide support for the Government of Iran, in circumstances in which the EU could not sustain the original reasons given for their inclusion (usually on the grounds that they support Iran’s nuclear programme).

Bank Tejarat’s original listing was annulled in January 2015 (see previous blog) then it was re-listed in April 2015 (blog here). The General Court has said its re-listing was not unlawful essentially because it was based (inter alia) on the fact that it supports the Iranian Government by offering financial resources and services for oil and gas development projects which is a significant source of Government funding.

ECJ says actions by armed forces can be terrorist acts for sanctions purposes

The European Court of Justice has just given judgment in the LTTE case, Case C-158/14 A, B, C, D v Minister van Buitenlandse Zaken.  The Court followed the views of Advocate General Sharpston in her opinion (see previous blog). This was a preliminary reference, meaning that the ECJ was answering questions about the interpretation of EU law rather than being asked to invalidate sanctions measures.  The 2 main points in the judgment are that:

  • The preliminary reference was admissible because it was not clear that A, B, C and D would have had standing to bring a direct action in the General Court (since they were not EU-designated) – had they had so they would have had to have brought a direct action not a preliminary reference; and
  • Actions by armed forces during periods of armed conflict within the meaning of international humanitarian law can constitute terrorist offences / terrorist acts for the purposes of the EU’s terrorist asset freezing regime.

General Court rejects another re-listing case; IRISL v Council

The General Court of the EU has rejected another challenge to the re-listing of entities after they have won their annulments challenging their initial listing on the EU’s Iran sanctions; Islamic Republic of Iran Shipping Lines v Council (link to the judgment is here).  The Court has held that the Council was entitled not only to re-list IRISL and some companies said to be connected with it, but that it could introduce new listing criteria that expressly target IRISL-connected companies after IRISL’s designation had been annulled (on which see previous blog). The judgment contains interesting comments on the probative value of witness evidence and the credibility and source of evidence. Maya Lester QC acted for the applicants.

EU Court rejects application by Russian defence company Almaz-Antey

court-of-justice-1The General Court of the EU has dismissed the annulment application brought by Almaz-Antey, a Russian defence firm, which challenged its listing on the EU’s sanctions that target people and entities responsible for undermining the territorial integrity of Ukraine. Case T-255/15 Joint-Stock Company ‘Almaz-Antey’ Air and Space Defence Corp v Council [2016].  This is the 2nd judgment interpreting the EU’s targeted Russia sanctions (the 1st being Rotenberg – see previous blog).

The EU’s reasons given for including Almaz-Antey in July 2014 are that it is a state owned company that manufactures weapons for the Russian army, an army which provides heavy weaponry to Ukrainian separatists used for shooting down aircraft. The Court rejected the applicant’s challenge to the proportionality of the listing criterion, finding that the EU had legitimately amended the criteria to include people / entities “materially or financially supporting actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine”. And the Court held that it was legitimate to include the applicant on the basis of that criterion even though the evidence showed that it had not supplied weapons to Ukraine or for use there; it was enough that it was a state-owned company suppying weapons to the Russian army which itself supplies weapons to the separatists in Eastern Ukraine.

As is often the case, the Court rejected the applicant’s other arguments based on vague reasons, rights of defence and prorportionality, and ordered the applicant to pay the EU Council’s costs. There are interesting comments at paras 147-8 of the judgment about the Council’s use of press articles as evidence.

EU Court rejects Al-Ghabra’s annulment application

Mr Al-Ghabra was designated by the UN on its counter-terrorist asset freezing measures in 2006 at the UK’s request. He applied to the General Court of the EU to annul his listing and subsequent re-listings in 2013. The Court has just rejected that application in Case T-248/13 Al-Ghabra v Commission (13 December 2016). The Court found that his application was out of time in so far as it related to his original designation, that the Commission could not be criticised for failure to follow the procedure and legal standards set out in Kadi II (see previous blog) for reviewing UN designations, and that although that review had taken an unreasonable length of time, it had not prejudiced the applicant’s rights of defence. The Court also rejected the applicant’s suggestions that the Commission had not satisfied that the UN had relied on evidence obtained by torture or had failed to gather exculpatory material, and that there was insufficient evidence to justify the EU implementation of Mr Al-Ghabra’s designation.

2 more Iran bank re-listings upheld by EU court

The General Court annulled the original targeted sanctions on the Export Development Bank of Iran and Bank Refah Kargaran in September 2013.  They had been listed in July 2010 on the grounds that they had helped designated entities to circumvent sanctions (Bank Refah Karagan was said to have helped Bank Melli Iran to do so), and in the case of the Export Development Bank that it had provided financial services to companies associated with nuclear proliferation.

The EU re-listed them after the banks won their annulment actions (as it frequently does), changing the criterion it relied on from helping a designated person to evade sanctions to providing “support for the Government of Iran”. The new allegation in November 2013 against the Export Development Bank is that it is “a state-owned enterprise providing financial support to the Iranian government”, and against Bank Refah is that it is an “entity providing financial support to the Iranian Government.  It is 94% owned by the [OSS], which is itself controlled by the Iranian government, and provides banking services to government ministries”.

The EU Court has upheld both re-listings in judgments linked to here (Export Development Bank of Iran & Bank Refah Kargaran) on the grounds that the Council had demonstrated (on the new criterion) that the banks provide financial support of a sufficiently important kind to the Government of Iran to justify their designation.  As in past cases, there was no need for the Council to show that the financial support was itself directly related to Iran’s nuclear programme, but rather that it was “quantitatively or qualitatively” significant.

1st EU Russia sanctions judgment – Arkady Rotenberg’s 1st listing was unlawful and 2nd lawful in part

The General Court of the EU has today decided the 1st case challenging the legality of a Russian EU sanctions listing. The case was brought by Arkady Rotenberg and the judgment is here – Case T-720/14 Rotenberg v Council.  Maya Lester QC appeared for Mr Rotenberg.

The Court held that Mr Rotenberg’s original listing in July 2014 was unlawful. This was because the EU could not prove that he:

  • Was “associated with people responsible for undermining the territorial integrity of Ukraine” because the EU could not prove that AR was a shareholder in / controlled Giprotransmost or a beneficial owner of Volgomost, which had conducted a feasibility study into the construction of  bridge from Russia into Crimea. In order to fulfil that criterion, the Court said the EU would have to have demonstrated “a direct or indirect link” between the activities or actions of listed people and the situation in Ukraine.
  • “Benefitted from decision-makers who were responsible for the annexation of Crimea”, because the EU had relied on contracts Mr Rotenberg’s companies had won for the Sochi Olympics that had been awarded before President Putin had threatened the annexation of Crimea. The Court said that in order for that criterion to satisfy the principle of legal certainty, it had to be interpreted to mean that the Russian decision-makers in question (who had to be named) “should already at the very least have started to prepare the annexation of Crimea and the destabilisation of Eastern Ukraine” in which case those benefitting from those decision makers could not have been “unaware of the involvement of those decision-makers” in those preparations, and that they would be prevented from supporting those decision-makers by the resources they derived from those benefits being targeted.

Mr Rotenberg’s listing in July 2015 was also in part unlawful because it repeated those 2 reasons.  However, the July 2015 listing was upheld because it had added 2 new reasons for suggesting that Mr Rotenberg had benefitted from decision-makers (in this case President Putin) responsible for the annexation of Crimea which the Court said were sufficient, namely that Mr Rotenberg:

  • owns Stroygazmontazh which had been awarded a contract to build a bridge between Russia and Crimea, which the Court held would undermine Ukraine’s territorial integrity, and
  • is the Chairman of the publishing house Prosvescheniye, and as chairman the Court said Mr Rotenberg “could not reasonably have been unaware of the editorial line in publications of the publishing house which he headed” namely a public relations campaign to persuade Crimean children that they are Russian citizens.

The applicant’s additional arguments on the vagueness of reasons, proportionality, rights of defence and data protection did not succeed. Each side was ordered to bear its own costs.