When does re-listing breach right to effective remedy? AG’s opinion in NITC

EU3Advocate General Tanchev (the Bulgarian AG in the EU Court of Justice) has given his opinion in the National Iranian Tanker Company’s (NITC) re-listing appeal, Case C-600/16 P (see previous blog here on the General Court judgment under appeal). Link to Opinion here, which does not bind the Court of Justice; the Court will give judgment in the next few months. Maya Lester QC (inter alia) acts for the NITC.

The NITC had argued that its right to an effective remedy (and other principles of EU law) was breached because it had been re-listed on the EU’s Iran sanctions having had its original listing annulled, without there being any change of fact; the only change was that the EU Council had said NITC should be re-listed because the form of support it was said to be providing to the Iranian Government as a tanker company was “logistical” rather than (as before) “financial”.

The Opinion contains an interesting analysis of the right to an effective remedy under the EU Charter and ECHR. The AG’s view is that that principle curtails the EU’s discretion to adopt measures that re-list after an error identified in an EU judgment, and that damages wouldn’t provide a remedy in those circumstances because there wouldn’t be a sufficiently serious breach of EU law. However, in his view, NITC’s right to an effective remedy had not been breached on the facts because logistical support was different from providing financial support to the Government of Iran, so the Council was not re-litigating the same point. He also said that there was no evidence that the Council had held back arguments at the time of first listing for use in re-listing (so-called “warehousing”) – this raises interesting issues about the circumstances in which there could be such evidence available to the applicant and the consequences.

General Court Stavytskyi judgment defining misappropriation of state funds in Ukraine sanctions

CJEU1Edward Stavytskyi, former Minister for Energy and the Coal Industry of Ukraine, was listed on the EU’s March 2014 sanctions imposing an EU asset freeze on people said to be responsible for the misappropriation of Ukrainian state funds. Like everyone else on that list, Mr Stavytskyi was included for being a person under investigation in Ukraine for “involvement in crimes in connection with the embezzlement of Ukrainian state funds and their illegal transfer outside Ukraine”. Like a number of others, he successfully challenged his initial listing in Case T-486/14 (see previous blog here) because the sole basis for his inclusion at that time was a letter from March 2014 from Ukraine’s Prosecutor General which provided no details of what was alleged against him.

The EU General Court has rejected his challenge to his re-listing in Case T-242/16. The Court has said that the reasons given for his inclusion were sufficiently specific, the criteria for designating individuals in these measures has a proper legal basis when properly interpreted, and that the documents from the Ukrainian authorities now contained sufficient information about the allegations. The judgment has interesting passages defining the concept of misappropriation of state funds for these purposes.

First judgment on EU North Korea sanctions

CJEU1The EU General Court has given judgment in the first case about the EU’s North Korea DPRK sanctions regime. Judgment here (Maya Lester QC appeared for the applicants).

The Korea National Insurance Company was subject to an EU asset freeze for (in summary) “generating substantial foreign exchange revenue which could be used to contribute” to the DPRK’s nuclear / ballistic programme. The Court found, in essence, that as a state-owned insurance company that generated a profit (even if it did not generate substantial foreign exchange revenue) the listing criterion was fulfilled. The Court also rejected claims brought by individuals who had held positions in the company, on the basis that their witness evidence explaining (inter alia) their retirement / absence of ongoing links with the company had no probative value because it was prepared for the purposes of the EU case.

Klyuyev’s 2017 EU re-listing annulled

CJEU1.pngThe EU General Court has annulled the 2017 listing of Sergiy Klyuyev on its Ukraine misappropriation sanctions. He is a member of the Ukrainian Parliament and brother of the former head of the Presidential Administration of Ukraine, Andriy Klyuyev. Judgment here: Sergiy Klyuyev v Council T-731/15 (21 February 2018). The Court declined to annul his 2015 – 2016 re-listings, although he won an earlier case annulling his original listing (see previous blog).

His 2017 re-listing was annulled because the Council had provided no evidence to support the designation of Andriy Klyuyev, with whom the applicant was identified as being ‘associated’, and had not taken into account the applicant’s evidence (including that he was no longer the subject of pre-trial investigation in Ukraine). The Council should have made further enquiries of the Ukrainian authorities, since the evidence gave rise to doubts about the reliability of the Council’s information. The judgment contains interesting comments about the purpose and interpretation of the EU’s Ukraine sanctions regime.

2 more EU Ukraine misappropriation judgments: Klymenko’s listing upheld, Ivanyushchenko’s annulled

CJEU1Two new EU General Court Ukraine misappropriation judgments – Klymenko v Council T-245/15 and Ivanyushchenko v Council T-246/15.

As we have reported, the Court has annulled designations on the EU Ukraine list which imposes restrictive measures on those said to be “responsible for misappropriating Ukrainian state funds”, where there is insufficient evidence that the relevant person is “subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets”.

In the two most recent judgments, the Court considered the information set out in various letters from the prosecutors to decide whether it was sufficiently specific and up to date as regards the allegations against each applicant to form the basis for EU designation. In Mr Ivanyushchenko’s case, the Court annulled his designation because the evidence was beset with inconsistencies or irrelevant, such that the Council should have had doubts about its accuracy and sought further information. In Mr Klymenko’s case, the Court declined to annul.

ECJ rejects Yanukovych appeals

CJEU1The European Court of Justice has dismissed the appeals of Viktor Yanukovych, former President of Ukraine, and his son Oleksandr Yanukovych, against the General Court judgments refusing to annul their listings on the EU’s Ukraine misappropriation sanctions. Links to judgments here: C-598/16 and C-599/16, both of 19 October 2017. Judgments below here: T-346/14 and T-348/14.

We previously reported that the General Court annulled their original listings, which had said that they were “subject to investigation in Ukraine…for the embezzlement of Ukrainian state funds”, for the same reason as all the Court’s previous Ukraine judgments (see eg previous blog here), namely that the listings were only based on a letter from Ukraine’s prosecutor stating that investigations had been opened into a number of former senior officials to establish the misappropriation of public funds, but said nothing about what each individual was accused of.  The Court then upheld the amended reasons given in subsequent listings saying that they were “subject to criminal proceedings” by the Ukrainian authorities for the “misappropriation of public funds or assets”, on the basis of a Ukrainian prosecutors’ letter.

The ECJ upheld this approach, and regarded the appeals as a request impermissibly for the appeal court to reassess the facts found by the court below, and dismissed the arguments that the listing criterion for the Ukraine misappropriation regime did not pursue a valid foreign policy objective or that the General Court had been wrong to rely on the Ukrainian prosecutor’s letter as a sufficient underpinning for the sanctions.

EU Court rejects 2 Tunisia cases

The General Court has rejected 2 applications to annul listings on the EU’s Tunisia sanctions, brought by Sirine Ben Ali and Mohamed Mabrouk. Links to judgments here: T-149/15 and T-175/15, both of 5 October 2017.  These are the regimes the EU imposed in 2011 on those said to have misappropriated Tunisian state funds.

The Court rejected both cases, finding that it was sufficient for the applicants’ inclusion in these measures that there are ongoing judicial proceedings against them in Tunisia for misappropriation offences.  The Court rejected arguments that those proceedings were taking unreasonably long, unlikely to lead to trial and politically motivated, and that the EU sanctions had run their course given that Tunisia was now a democracy.  The Court did say that by analogy with the counter-terrorism Kadi case law the EU had to examine the evidence sent to it by the Tunisian authorities, but that it had done so sufficiently in these cases.  The judgments cover many other points about admissibility, confirmatory decisions etc too, and also consider whether less onerous alternatives were possible in the proportionality analysis.

 

BelTechExport’s Belarus re-listing upheld by EU Court

The General Court of the EU has dismissed BelTechExport’s application for its re-listing on the EU’s targeted Belarus sanctions to be annulled. Judgment here: Case T-765/15 BelTechExport ZAO v Council [2017]. BelTechExport, an arms manufacturer, was listed on the grounds that it “benefits from the regime as a main exporter of arms and military equipment in Belarus, which requires authorisation from the Belarusian authorities”, but has since been removed from the EU’s sanctions lists (see previous blog).

BelTechExport was previously listed on the basis that “It supports and provides revenue to the Lukashenka regime by its sale of arms”, “benefits from the regime as the main exporter of arms and military equipment owned by the state or produced by state owned companies”, and has ties to a listed individual, Vladimir Peftiyev; the Court annulled that designation (see previous blog).