Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE GENERAL COURT (Ninth Chamber)

28 January 2016 (*)

(Common foreign and security policy — Restrictive measures adopted in view of the situation in Ukraine — Freezing of funds — List of persons, entities and bodies covered by the freezing of funds and economic resources — Inclusion of the applicant’s name — Proof that inclusion on the list is justified)

In Case T‑486/14,

Edward Stavytskyi, residing in Brussels (Belgium), represented by J. Grayston, Solicitor, and by P. Gjørtler, G. Pandey, D. Rovetta and M. Gambardella, lawyers,

applicant,

v

Council of the European Union, represented by V. Piessevaux and J.‑P. Hix, acting as Agents,

defendant,

APPLICATION for annulment of Council Implementing Decision 2014/216/CFSP of 14 April 2014 implementing Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2014 L 111, p. 91) and of Council Implementing Regulation (EU) No 381/2014 of 14 April 2014 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2014 L 111, p. 33), in so far as the applicant’s name was included on the list of persons, entities and bodies covered by those restrictive measures,

THE GENERAL COURT (Ninth Chamber),

composed of G. Berardis (Rapporteur), President, O. Czúcz and A. Popescu, Judges,

Registrar: L. Grzegorczyk, Administrator,

having regard to the written procedure and further to the hearing on 24 September 2015,

gives the following

Judgment

 Background

1        The applicant, Edward Stavytskyi, is a former Minister for Energy and the Coal Industry of Ukraine.

2        On 5 March 2014, the Council of the European Union adopted, on the basis of Article 29 TEU, Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2014 L 66, p. 26).

3        Article 1(1) and (2) of Decision 2014/119 provides as follows:

‘1.      All funds and economic resources belonging to, owned, held or controlled by persons having been identified as responsible for misappropriation of Ukrainian State funds and persons responsible for human rights violations in Ukraine, and natural or legal persons, entities or bodies associated with them, as listed in the Annex, shall be frozen.

2.      No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of natural or legal persons, entities or bodies listed in the Annex.’

4        The detailed rules for implementation of the restrictive measures at issue are defined in the subsequent paragraphs of that article.

5        On the same date, the Council adopted, on the basis of Article 215(2) TFEU, Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2014 L 66, p. 1).

6        In accordance with Decision 2014/119, Regulation No 208/2014 requires the adoption of the restrictive measures at issue and lays down the detailed rules for implementation of those restrictive measures in terms which are essentially identical to those used in that decision.

7        The names of the persons covered by Decision 2014/119 and Regulation No 208/2014 appear on the list in the annex to that decision and in Annex I to that regulation (‘the list’) along with, in particular, a statement of the reasons for their listing. The applicant’s name does not appear on that list.

8        On 6 March 2014, the Council published in the Official Journal of the European Union a Notice for the attention of the persons subject to the restrictive measures provided for in Decision 2014/119 and in Regulation No 208/2014 concerning restrictive measures in view of the situation in Ukraine (OJ 2014 C 66, p. 1). According to that Notice, ‘the persons concerned may submit a request to the Council, together with supporting documentation, that the decision to include them on the … list should be reconsidered ...’. The Notice also draws the attention of the persons concerned ‘to the possibility of challenging the Council’s decision before the General Court … in accordance with the conditions laid down in Article 275, second paragraph, and Article 263, fourth and sixth paragraphs, [TFEU]’.

9        Decision 2014/119 and Regulation No 208/2014 were amended by Council Implementing Decision 2014/216/CFSP of 14 April 2014 implementing Decision 2014/119 (OJ 2014 L 111, p. 91) and by Council Implementing Regulation (EU) No 381/2014 of 14 April 2014 implementing Regulation No 208/2014 (OJ 2014 L 111, p. 33).

10      By Implementing Decision 2014/216 and Implementing Regulation No 381/2014 the applicant’s name was added to the list with the identifying information ‘former Minister of Fuel and Energy of Ukraine’ and the following statement of reasons:

‘Person subject to investigation in Ukraine for involvement in crimes in connection with the embezzlement of Ukrainian State funds and their illegal transfer outside Ukraine.’

11      On 15 April 2014, the Council published in the Official Journal a notice essentially identical to the one which it had published on 6 March 2014 (see paragraph 8 above) and addressed to persons subject to the restrictive measures provided for in Decision 2014/119, as implemented by Implementing Decision 2014/216, and in Regulation No 208/2014, as implemented by Implementing Regulation No 381/2014, concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine.

12      Decision 2014/119 was also amended by Council Decision (CFSP) 2015/143 of 29 January 2015 (OJ 2015 L 24, p. 16), which entered into force on 31 January 2015. As to the criteria for the designation of persons covered by the restrictive measures at issue, according to Article 1 of that decision, Article 1(1) of Decision 2014/119 is replaced by the following:

‘1.      All funds and economic resources belonging to, owned, held or controlled by persons having been identified as responsible for the misappropriation of Ukrainian State funds and persons responsible for human rights violations in Ukraine, and natural or legal persons, entities or bodies associated with them, as listed in the Annex, shall be frozen.

For the purpose of this Decision, persons identified as responsible for the misappropriation of Ukrainian State funds include persons subject to investigation by the Ukrainian authorities:

(a)      for the misappropriation of Ukrainian public funds or assets, or being an accomplice thereto; or

(b)      for the abuse of office as a public office-holder in order to procure an unjustified advantage for him- or herself or for a third party, and thereby causing a loss to Ukrainian public funds or assets, or being an accomplice thereto.’

13      Council Regulation (EU) 2015/138 of 29 January 2015 amending Regulation No 208/2014 (OJ 2015 L 24, p. 1) amended the latter in accordance with Decision 2015/143.

14      Decision 2014/119 and Regulation No 208/2014 were subsequently amended by Council Decision (CFSP) 2015/364 of 5 March 2015 amending Decision 2014/119 (OJ 2015 L 62, p. 25) and by Council Implementing Regulation (EU) 2015/357 of 5 March 2015 implementing Regulation No 208/2014 (OJ 2015 L 62, p. 1). Decision 2015/364 amended Article 5 of Decision 2014/119 by extending the application of the restrictive measures in respect of the applicant until 6 March 2016. Implementing Regulation 2015/357 consequently replaced Annex I to Regulation No 208/2014.

15      By Decision 2015/364 and Implementing Regulation 2015/357, the applicant’s name was maintained on the list with the identifying information ‘former Minister of Fuel and Energy’ and the following new statement of reasons:

‘Person subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets.’

 Procedure and forms of order sought by the parties

16      By application lodged at the Registry of the General Court on 25 June 2014, the applicant brought the present action.

17      On 30 January 2015, the Council submitted a reasoned application in accordance with Article 18(4) of the Instructions to the Registrar of the General Court requesting that the contents of an annex to the rejoinder should not be cited in the documents relating to the present case to which the public has access.

18      On 14 August 2015, in the context of the measures of organisation of procedure provided for in Article 89 of the Rules of Procedure of the General Court, the Court invited the parties to submit their observations on the question whether the applicant still had an interest in bringing proceedings following the amendment of the reason for the inclusion of his name on the list and the extension of the restrictive measures concerning him until 6 March 2016 by Decision 2015/364 and Implementing Regulation 2015/357 and, if so, in relation to which pleas he still had such an interest. The parties complied with that request within the time allowed. The parties also submitted their observations on the replies to the questions within the time allowed.

19      The parties presented oral argument and answered the questions put to them by the Court at the hearing on 24 September 2015.

20      The applicant claims that the Court should:

–        annul Implementing Decision 2014/216 and Implementing Regulation No 381/2014 in so far as they relate to him;

–        order the Council to pay the costs.

21      The Council contends that the Court should:

–        dismiss the action as inadmissible or, in the alternative, as unfounded;

–        order the applicant to pay the costs.

 Law

 The applicant’s continuing interest in bringing proceedings

22      As was stated in paragraphs 14 and 15 above, Decision 2015/364 and Implementing Regulation 2015/357 amended the reason for including the applicant’s name on the list annexed to Implementing Decision 2014/216 and Implementing Regulation No 381/2014 and extended the application of the restrictive measures, as regards the applicant, until 6 March 2016.

23      The applicant did not bring an action against Decision 2015/364 or Implementing Regulation 2015/357, which have therefore become final in so far as he is concerned.

24      The Council submits that, since the applicant did not challenge either Decision 2015/364 or Implementing Regulation 2015/357, which replaced the restrictive measures imposed by Decision 2014/119 and Regulation No 208/2014, he accepted being subject to those restrictive measures and thus lost his interest in bringing proceedings.

25      It is established case-law that the purpose of the action must, like the interest of an applicant in bringing proceedings, continue until the final decision, failing which there will be no need to adjudicate, which presupposes that the action must be liable, if successful, to procure an advantage for the party bringing it (see, to that effect and by analogy, judgment of 6 June 2013 in Ayadi v Commission, C‑183/12 P, EU:C:2013:369, paragraph 59 and the case-law cited).

26      Moreover, according to the case-law, whilst recognition of the illegality of the contested act cannot, as such, compensate for material harm or for interference with a person’s private life, it is nevertheless capable of rehabilitating the person concerned or constituting a form of reparation for the non-material harm which he has suffered by reason of that illegality, and of thereby establishing that he retains his interest in bringing proceedings (see, to that effect, judgment of 28 May 2013 in Abdulrahim v Council and Commission, C‑239/12 P, ECR, EU:C:2013:331, paragraphs 70 to 72).

27      In the present case, in response to a written question from the Court (see paragraph 18 above), the applicant claims that the case-law, according to which an applicant’s interest in bringing proceedings does not necessarily disappear because the act contested by the applicant has ceased to have effect in the course of proceedings, is also applicable in a situation, such as in the present case, in which the contested act was amended and that subsequent amendment was not challenged by the applicant.

28      It must be stated that the applicant retains an interest in bringing proceedings arising from the fact that recognition of the illegality of Decision 2014/119 and of Regulation No 208/2014 may form the basis of a subsequent action for compensation for material and non-material damage suffered as a result of those acts during the period of their application, that is to say, for the period from 6 March 2014 to 6 March 2015 (see, to that effect and by analogy, judgment in Abdulrahim v Council and Commission, cited in paragraph 26 above, EU:C:2013:331, paragraph 82).

29      In that regard, it must be held that the fact that Decision 2014/119 and Regulation No 208/2014 are no longer in force, given that they have been amended, in so far as they concern the applicant, by Decision 2015/364 and Implementing Regulation 2015/357, cannot be equated with annulment by the Court of acts adopted initially, in so far as that amendment does not amount to recognition of the illegality of the acts in question (see, to that effect and by analogy, judgment of 11 June 2014 in Syria International Islamic Bank v Council, T‑293/12, EU:T:2014:439, paragraphs 36 to 41 and the case-law cited).

30      It must therefore be concluded that the applicant’s interest in bringing proceedings continues to exist despite the retention of the restrictive measures affecting him, and despite the fact that he has not brought an action against Decision 2015/364 or Implementing Regulation 2015/357.

 Substance

31      In support of the action, the applicant relies on seven pleas in law. The first alleges an infringement of the right to be heard. The second alleges an infringement of the obligation to give proper notice. The third alleges a failure to state reasons. The fourth alleges an infringement of the rights of defence. The fifth alleges an error in the choice of legal basis. The sixth alleges a manifest error of assessment, while the seventh alleges an infringement of the right to protection of personal data.

32      The Court considers that it is appropriate to examine the sixth plea first.

33      As a preliminary point, it must be noted that, contrary to what the Council asserted at the hearing, by the sixth plea in law, the applicant did not simply propose that the case-law of the European Court of Human Rights be applied, without challenging the factual basis on which the measures concerning him had been adopted.

34      The applicant claims in the application that ‘the Council decided [to include his name on the list] on the mere grounds that [it] held information that an unspecified investigation was being conducted in Ukraine in relation to the Applicant’. He goes on to submit that ‘the mere allegation that an unspecified investigation was being conducted against an individual, supposedly as part of criminal proceedings in Ukraine, could not in itself constitute sufficient grounds for the EU to decide to support such investigations by listing the individual concerned’. He concludes by asserting that ‘the Council … made the decision to list the Applicant without due consideration of facts’.

35      Thus, by that plea, the applicant claims, in essence, that the measure concerning him was adopted without a sufficiently solid factual basis.

36      The Council maintains that it is clear from the letter from the Office of the Prosecutor General of Ukraine to the High Representative of the European Union for Foreign Affairs and Security Policy of 7 March 2014 (‘the letter of 7 March 2014’) that the Ukrainian law-enforcement bodies had brought criminal proceedings based on the applicant’s misappropriation of public funds, which is a criminal offence under Article 191 of the Ukrainian Criminal Code. It also observes that evidence postdating Implementing Decision 2014/216 and Implementing Regulation No 381/2014 confirmed that the applicant was the subject of a pretrial investigation in such criminal proceedings.

37      It should be noted that, although the Council has a broad discretion as regards the general criteria to be taken into consideration for the purpose of adopting restrictive measures, the effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires that, as part of the review of the lawfulness of the grounds which form the basis of the decision to include or to maintain a person’s name on the list of persons subject to restrictive measures, the Courts of the European Union must ensure that that decision, which affects that person individually, is taken on a sufficiently solid factual basis. This entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, are substantiated by sufficiently specific and concrete evidence (see judgment of 21 April 2015 in Anbouba v Council, C‑605/13 P, ECR, EU:C:2015:248, paragraphs 41 and 45 and the case-law cited).

38      In the present case, the criterion laid down in Article 1(1) of Decision 2014/119 provides that restrictive measures are to be adopted against persons who have been identified as responsible for the misappropriation of public funds. Furthermore, it is clear from recital 2 of that decision that the Council adopted those measures ‘with a view to consolidating and supporting the rule of law ... in Ukraine’.

39      The name of the applicant was included on the list on the ground that he was a ‘person subject to investigation in Ukraine for involvement in crimes in connection with the embezzlement of Ukrainian State funds and their illegal transfer outside Ukraine’. It thus appears that the Council took the view that the applicant was the subject of a preliminary investigation or inquiry, which had not (or had not yet) culminated in the bringing of a formal charge, in relation to his alleged involvement in the misappropriation of public funds.

40      In support of the reason for including the applicant’s name on the list, the Council invokes the letter of 7 March 2014 and other evidence postdating Implementing Decision 2014/216 and Implementing Regulation No 381/2014.

41      The letter of 7 March 2014 states that ‘the law-enforcement bodies of Ukraine have launched a number of criminal proceedings based on the facts of crimes committed by former high officials’. Those former high officials, who include the applicant, are listed immediately afterwards, together with a reference to the offence which they are suspected of having committed under the Ukrainian Criminal Code (in the present case, appropriation of Ukrainian State funds). That letter also states that ‘the investigation of the above unlawful acts checks the facts related to the appropriation of large amounts of the State assets and their further unlawful transfer outside Ukraine’.

42      With regard to the case file, the letter of 7 March 2014 is the only item of evidence submitted by the Council in the present proceedings which predates Implementing Decision 2014/216 and Implementing Regulation No 381/2014. The lawfulness of those acts must therefore be assessed in the light of that item of evidence alone.

43      It is therefore necessary to establish whether the letter of 7 March 2014 constitutes sufficient proof to support the conclusion that the applicant had been ‘identified as responsible for the misappropriation of Ukrainian State funds’ within the meaning of Article 1(1) of Decision 2014/119.

44      Although, as the Council submits, the letter of 7 March 2014 was sent by a high judicial body in a third country, that is to say, the Prosecutor General of Ukraine, it contains only a general and generic statement linking the applicant’s name, among those of other former senior officials, to an investigation which essentially sought to establish that misappropriation of public funds had in fact occurred. Even though the letter identifies the offence which the applicant is suspected of having committed under the Ukrainian Criminal Code, that is to say, the appropriation of Ukrainian State funds, penalised under Article 191 of that code, it does not provide any details as to confirmation of the acts which the investigation conducted by the Ukrainian authorities was in the process of verifying and, still less, as to the applicant’s individual liability, even if presumed, in respect of those acts.

45      It is true, as the Council submits, that, in the context of the application of restrictive measures, the EU Courts have held that identification of a person as responsible for an offence did not necessarily imply that that person had been convicted of that offence (see, to that effect, judgments of 5 March 2015 in Ezz and Others v Council, C‑220/14 P, ECR, EU:C:2015:147, paragraph 72, and 27 February 2014 Ezz and Others v Council, T‑256/11, ECR, EU:T:2014:93, paragraphs 57 to 61).

46      However, in the context of the cases which gave rise to the case-law cited in paragraph 45 above, the applicants had at least been the subject of an order of the Prosecutor General of the third country concerned seeking to seize their assets, which had been endorsed by a criminal court (judgment in Ezz and Others v Council, cited in paragraph 45 above, EU:T:2014:93, paragraph 132). Consequently, the imposition of restrictive measures on the applicants in those cases was based on specific facts of which the Council was aware.

47      In the present case, the Court finds, first, that the Council did not have any information regarding the acts or conduct specifically attributed to the applicant by the Ukrainian authorities and, secondly, that, even if it is examined in its context, the letter of 7 March 2014 on which it relies cannot constitute a sufficiently solid factual basis within the meaning of the case-law cited in paragraph 37 above for inclusion of the applicant’s name on the list on the ground that he had been ‘identified as responsible’ for the misappropriation of State funds.

48      Irrespective of the stage of the proceedings to which the applicant was deemed to be subject, the Council could not adopt restrictive measures against him without knowing the acts of misappropriation of public funds which the Ukrainian authorities specifically alleged against him. It is only by being aware of such acts that the Council would have been in a position to establish that they were capable, first, of being categorised as misappropriation of public funds and, secondly, of undermining the rule of law in Ukraine, the consolidation and support of which, as was recalled in paragraph 38 above, constitute the objective pursued by the adoption of the restrictive measures in question.

49      Furthermore, it is for the competent European Union authority to establish, in the event of challenge, that the reasons relied on against the person concerned are well founded, and not the task of that person to adduce evidence of the negative, that those reasons are not well founded (judgments of 18 July 2013 in Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, ECR, EU:C:2013:518, paragraphs 120 and 121, and 28 November 2013 Council v Fulmen and Mahmoudian, C‑280/12 P, ECR, EU:C:2013:775, paragraphs 65 and 66).

50      In view of all of the foregoing, the inclusion of the applicant’s name on the list does not comply with the criteria for the designation of persons covered by the restrictive measures at issue which are laid down in Decision 2014/119, as amended by Implementing Decision 2014/216.

51      Since the sixth plea in law is well founded, the action must be upheld in that it seeks annulment of Implementing Decision 2014/216 in so far as it concerns the applicant, without there being any need to rule on the applicant’s other pleas.

52      For the same reasons, Implementing Regulation No 381/2014 must be annulled in so far as it concerns the applicant.

 Costs

53      Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

54      Since the Council has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.

On those grounds,

THE GENERAL COURT (Ninth Chamber)

hereby:

1.      Annuls Council Implementing Decision 2014/216/CFSP of 14 April 2014 implementing Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, and Council Implementing Regulation (EU) No 381/2014 of 14 April 2014 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, in so far as they concern Mr Edward Stavytskyi;

2.      Orders the Council of the European Union to bear its own costs and to pay those incurred by Mr Stavytskyi.

Delivered in open court in Luxembourg on 28 January 2016.

[Signatures]

* Language of the case: English.

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