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).

Court upholds EU adoption of UN sanctions on DRC gold export company

The General Court of the EU dismissed a case brought by a gold export company Uganda Commercial Impex Ltd to annul its inclusion on the EU’s sanctions on the Democratic Republic of Congo.  Judgment here Cases T-107/15 and T-347/15 Uganda Commercial Impex Ltd v Council [2017].

The EU sanctioned Uganda Commercial Impex because the UN Sanctions Committee had said (since 2007) that (inter alia) it “bought gold through a regular commercial relationship with traders in the DRC tightly linked to militias. This constitutes ‘provision of assistance’ to illegal armed groups in breach of the arms embargo”.

The Court said the EU institutions had discharged their duty properly in implementing this UN listing. In particular, the court said listing was justified by the UN panel of expert reports on which it was based (and dismissed grounds for annulment based on the duty give reasons, proportionality and rights of defence).  The applicant’s evidence refuting the panel of experts’ report was declared inadmissible because it had not been submitted with the EU court application and because the witness statement was given by one of the company’s directors who therefore has “a direct personal interest in the outcome of the present proceedings” (the Court has taken this approach to witness statements in a few recent sanctions cases).

ECJ terrorist re-listing judgments on Hamas and LTTE

The Grand Chamber of the ECJ has upheld an application brought by the EU Council to set aside a decision of the General Court to annul the designation of Hamas (see previous blog), and has dismissed the application to set aside the judgment annulling the re-listing of the Liberation Tigers of Tamil Eelam (LTTE) (see previous blog).  Case C-79/15 P Council v Hamas and Case C-599/14 P Council v LTTE.

The ECJ said the General Court was wrong to have held that in considering whether a re-listing remained justified on the basis of ongoing terrorist risk, the EU had to decide only on the basis of material that had been assessed by the national authorities.

Because the General Court’s decision to annul Hamas’ listing was solely based on that ground, ECJ referred the case back to the General Court. However, in LTTE’s case the ECJ found that the General Court’s decision to annul was correct on other grounds despite that error; the Council had not included in its reasons an assessment of whether the Indian competent authority protected rights of defence and effective judicial review in a manner equivalent to protection at EU level.

EU Court upholds conflict diamonds CAR asset freeze

Companies buying and selling diamonds challenged the EU implementation of their UN sanctions listing in 2015 for “providing support for armed groups or criminal networks through the illicit exploitation or trade of natural resources in the Central African Republic”. Badica and Kardiam said the EU had not established that those grounds were correct, and that the EU had simply reproduced the UN Security Council’s reasoning, without performing its own analysis.  The EU General Court has rejected their claim, finding that even though there was insufficient evidence to establish support to armed groups through trade in goods, there was sufficient evidence that Badica and Kardiam had continued to buy diamonds from the CAR after the export ban imposed by the Kimberley process.  The judgment is here – Case T-619/15 Central African Republic Diamond Purchasing Office v Council and the Court’s press release is here.

ECJ clarifies rules on bringing sanctions cases on behalf of deceased applicants

The Court of Justice held this month in Case C-505/16 P Olga Yanukovych v Council & Commission that the General Court had been right to reject an application for annulment seeking to annul the re-listing of Viktor Yanukovych, son of the former President of Ukraine, on the EU’s Ukraine misappropriation sanctions, after he had died.  Viktor Yanukovych’s widow Olga Yanukovych had tried to continue the application for annulment on his behalf after his death but the ECJ held that she had not done so in the procedurally correct manner and the application was inadmissible.