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.

Judgments on duties of EU when listing for Ukraine misappropriation

We reported in January 2016 (here) that the EU Court had annulled the designations of Mykola Azarov and Sergej Arbuzov, both former Prime Ministers of Ukraine, because the only basis for saying that they were “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 them and the nature of their alleged responsibility for misappropriation of assets.

The EU Court has now upheld their re-listings on the basis that there was sufficient evidence that they are “subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets”.  Judgments here; Cases T-221/15 Arbuzov and T-215/15 Azarov.  The General Court rejected grounds for annulment based on insufficient reasons, rights of defence, misuse of powers, and disproportionate breach of fundamental rights. It held that the EU Council has to check that the listed person is facing criminal proceedings for misappropriation of state funds in Ukraine, but it does not have to question the evidence underlying those proceedings or the procedure (particularly since Ukraine is a member of the Council of Europe & ECHR) and it is up to the EU to decide it if needs additional evidence or clarification.

When can EU court applicants challenge re-listings? AG opinion in HX appeal

HX was included in the EU’s Syria sanctions in 2014. Advocate General Kokott (the German Advocate General at the Court of Justice) has given her opinion in HX’s EJ appeal. See Opinion in Case C-423/16 P HX v Council and previous blog on the case here.

In the AG’s view, the General Court had been unduly formalistic and should have permitted HX to modify his application at the oral hearing to challenge his 2015 as well as 2014 listing (the Court had refused the modification because he made the application orally and not in a document). However, since all the 2015 listing did was extend the 2014 listing (which had been annulled in any case) by a year, HX had not been disadvantaged by the General Court’s decision.

ECJ rejects Faqih / Sanabel appeal

We previously reported on the General Court’s Kadi(2) type judgment (link here) rejecting the application for annulment brought by the Sanabel Relief Agency Ltd and 3 people connected with it (Al-Faqih, Abdrabbah, & Nasuf) on the grounds that the Commission had complied with its Kadi (2) duties of independently assessing the evidence for EU implementations of UN terrorist sanctions listings, the applicants had been sent narrative summaries, the EU had assessed their responses and the UN’s reasons, and the applicants had eventually been de-listed.  The Sanabel Relief Agency had ceased to exist so the Court also held that it had no continuing interest in the proceedings. The Court of Justice has just affirmed that judgment on appeal in Case C-19/16 P Faqih & Ors v Commission (Council intervening) – link to the appeal judgment here.  The ECJ has held that the Court below was entitled to have held that:

  1. Sanabel Relief agency no longer existed in law and therefore did not have capacity to bring legal proceedings before the EU court;
  2. the applicants’ proportionality plea was insufficiently particularised; and
  3. the Commission had properly discharged its Kadi (2) duties.

EU court rejects free speech challenge by Kiselev to Russia designation

The General Court of the EU has rejected an application to annul the inclusion of Dmitrii Kiselev on the EU’s restrictive measures. Judgment here; Case T-262/15 Kiselev v Council.  Mr Kiselev was included in March 2014 on the EU’s asset freezing & travel ban measures for being a State-appointed propagandist supporting the deployment of Russian forces in Ukraine. The Court has held (in summary) that:

  1. The EU’s Russia sanctions do not breach the EU / Russia Partnership Agreement because Russia’s actions in Ukraine fall within the exceptions for “war or serious international tension constituting threat of war”.
  2. The phrase “active support” for the Russian Government’s actions in Ukraine should be interpreted as referring to “persons who – without being themselves responsible for the actions and policies of the Russian Government destabilising Ukraine and without themselves implementing those actions or policies – provide support for those policies or actions” and covers only forms of support which are significant enough to “contribute to the continuance of” Russia’s “actions and policies destabilising Ukraine”.
  3. Including Mr Kiselev was a justified and proportionate restriction on his freedom of expression. He had given active support by portraying events in Ukraine in a light favourable to the Russian Government. Less restrictive measures such as a system of prior authorisation would not  have been as effective in pursuing the aim of “bringing pressure to bear on Russia’s decision-makers responsible for the situation in Ukraine”.

Safa Nicu – EU appeal court judgment on damages for sanctions listings

The European Court of Justice has given its judgment on an appeal brought by Safa Nicu, an Iranian company that successfully applied in 2014 to have its listing on the EU’s sanctions against Iran annulled, and on a cross-appeal brought by the EU Council. Case C-45/15 P Safa Nicu v Council [2017].

Safa Nicu appealed against the General Court’s decision to dismiss most of its €7.7m claim for damages resulting from the imposition of EU sanctions, awarding it €50,000 for reputational damage. The Council’s cross-appeal called for the Court to set-aside the decision to award Safa Nicu non-pecuniary damages.  The General Court judgment was the first awarding damages in a sanctions case (see previous blog), and the Court of Justice has upheld the judgment below on all points.  The main points are as follows:

  1. The ECJ upheld the General Court’s reasoning that the Council’s failure to substantiate the reasons for Safa Nicu’s listing with evidence for 3 years was a “sufficiently serious breach” of EU law (the pre-condition for an award of damages from an EU institution). The Court rejected the Council’s argument that the obligations on the Council had not been clear at the relevant time – the principles had been clear from the court’s case law since at least Kadi I.
  2. The ECJ also said the General Court had been correct to have considered all circumstances of the case in deciding whether to award damages, including whether annulment provided sufficient reparation, the gravity of the breach, its duration, the Council’s conduct, and the effect of listing Safa Nicu on third parties.
  3. The Court held that the General Court had also been justified in dismissing Safa Nicu’s claims for material damage, because the company had not provided sufficient evidence on the damage caused by the sanctions or the causal link between the imposition of sanctions and its losses.