Rami Makhlouf unsuccessful in EU Syria sanctions appeal

CJEU1The Court of Justice of the EU has dismissed Rami Makhlouf’s appeal against the General Court’s judgment which had dismissed his application to annul his EU Syria sanctions listing, finding no errors in the judgment below. Link to blog on lower court judgment here and appeal judgment here.

2 EU Ukraine misappropriation judgments: Arbuzov and Lukash

CJEU1The EU General Court has given two Ukraine misappropriation judgments: Arbuzov v Council T-258/17 and Lukash v Council T-210/16.

The Court annulled the listing of Olena Lukash (current Ukraine politician, former Minister of Justice), although she is no longer listed – the EU decided in March 2018 not to extend her listing when it came for renewal, see Council Decision (CFSP) 2018/333.

In respect of Sergei Arbuzov (former Prime Minister of Ukraine), the Court annulled his re-listing. We previously reported that the Court had annulled his original designation in January 2016 (because the only basis for saying he was “responsible for misappropriating Ukrainian state funds” was a letter in March 2014 from Ukraine’s Prosecutor General that gave no details of the matters alleged against him or the nature of his alleged responsibility), but had upheld his re-listing in July 2017 (there was now sufficient evidence that he was “subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets”).

The Court has now annulled Mr Arbuzov’s 2nd re-listing on the basis that the Council had made a manifest error of assessment in concluding that Mr Arbuzov’s observations concerning the lack of progress in the Ukrainian criminal proceedings had not justified further checks by the Council. The Court said the comments had raised legitimate questions as to the sufficiency of the information provided by the Ukrainian Prosecutor General regarding the criminal proceedings against Mr Arbuzov. Accordingly, the Council should have carried out additional checks with the Ukrainian authorities to clarify the reasons justifying the lack of progress in the criminal proceedings.

Mr Arbuzov was re-listed in March 2018 by Council Decision (CFSP) 2018/333 for the same reasons (2018 re-listing not addressed by this judgment).

Advocate General’s opinion in Bank Mellat

EU3.jpgAdvocate General Mengozzi has published his opinion stating that the European Court of Justice should in his view uphold the General Court’s judgment of 2 June 2016 (see previous blog) rejecting Bank Mellat’s challenge in case T-160/13 to the non-targeted parts of the EU’s former Iran sanctions regime. Link to his (non-binding) opinion is here.

Bank Mellat was seeking to challenge not the targeted asset freeze on it (on which it succeeded – see previous blog), but the wider restrictions on Iranian banks that had been imposed by EU sanctions pre-JCPOA. The General Court had held some of the application inadmissible on jurisdictional grounds. Other aspects were admissible but rejected on the grounds that the restrictions had a valid legal basis and were proportionate.

The Advocate General’s view is that the bank’s appeal is inadmissible because the sanctions under challenge were lifted by the JCPOA on 16 January 2016. In any event he considers that all the grounds of appeal against the General Court judgment should be dismissed, save that it erred in not having considered the effects of the JCPOA. The next step will be the final judgment of the Court of Justice.

EU 2nd re-listing of Syrian businessman Kaddour was lawful

CJEU1The EU General Court has upheld Khaled Kaddour’s 2016 re-listing: Kaddour v Council T-461/16.

On 13 November 2014, the EU General Court annulled his original listing on the basis that the Council had failed to provide evidence to support the claim that he had maintained a professional link with Maher Al-Assad or provided financial support to the Syrian regime (previous blog). The Court then upheld his 2015 re-listing (previous blog) (and now his 2016 re-listing too) because the Court said the Council had now provided “a body of precise and consistent evidence” capable of demonstrating that the applicant still had links with certain key figures of the Syrian regime.

Re-listing of former Ukrainian PM Azarov was lawful

CJEU1.pngIn January 2016, the EU General Court annulled the 2014 designation of former Ukrainian Prime Minister Mykola Azarov on the EU’s Ukraine targeted sanctions list, because the only basis for saying that he was “responsible for misappropriating Ukrainian state funds” (like the basis for many other listings) was a letter from Ukraine’s Prosecutor General (dated March 2014), which gave no details of the matters alleged against him or the nature of his alleged responsibility for the misappropriation of assets (previous blog).

In July 2017, the same Court upheld Mr Azarov’s 2015 re-listing because there was now sufficient evidence that he was “subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets” (previous blog). The Court has now upheld his 2016 re-listing too (which contained the same statement of reasons as his 2015 re-listing): Azarov v Council T-190/16.

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.