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

JUDGMENT OF THE GENERAL COURT (Sixth Chamber)

24 September 2019 (*)

(Common foreign and security policy — Restrictive measures taken in view of the situation in Ukraine — Freezing of funds — List of persons, entities and bodies subject to the freezing of funds and economic resources — Maintenance of the applicant’s name on the list — Council’s obligation to verify that the decision of an authority of a third State was taken in accordance with the rights of the defence and the right to effective judicial protection)

In Case T‑301/18,

Oleksandr Viktorovych Yanukovych, residing in Saint Petersburg (Russia), represented by T. Beazley QC, E. Dean and J. Marjason-Stamp, Barristers,

applicant,

v

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

defendant,

APPLICATION under Article 263 TFEU seeking the annulment of Council Decision (CFSP) 2018/333 of 5 March 2018 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2018 L 63, p. 48) and of Council Implementing Regulation (EU) 2018/326 of 5 March 2018 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2018 L 63, p. 5), in so far as the applicant’s name was maintained on the list of persons, entities and bodies subject to those restrictive measures,

THE GENERAL COURT (Sixth Chamber),

composed of G. Berardis (Rapporteur), President, D. Spielmann and Z. Csehi, Judges,

Registrar: F. Oller, Administrator,

having regard to the written part of the procedure and further to the hearing on 6 June 2019,

gives the following

Judgment

 Factual background to the dispute

1        The present case has been brought in the context of the restrictive measures adopted against certain persons, entities and bodies in view of the situation in Ukraine following the suppression of the demonstrations in Independence Square in Kiev (Ukraine) in February 2014.

2        The applicant, Mr Oleksandr Viktorovych Yanukovych, is a businessman and the son of the former President of Ukraine, Mr Viktor Feodorovych Yanukovych.

3        On 5 March 2014, the Council of the European Union adopted 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). On the same day, the Council adopted 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) (together, ‘the March 2014 acts’).

4        Recitals 1 and 2 of Decision 2014/119 state:

‘(1)      On 20 February 2014, the Council condemned in the strongest terms all use of violence in Ukraine. It called for an immediate end to the violence in Ukraine, and full respect for human rights and fundamental freedoms. It called upon the Ukrainian Government to exercise maximum restraint and opposition leaders to distance themselves from those who resort to radical action, including violence.

(2)      On 3 March 2014, the Council agreed to focus restrictive measures on the freezing and recovery of assets of persons identified as responsible for the misappropriation of Ukrainian State funds and persons responsible for human rights violations, with a view to consolidating and supporting the rule of law and respect for human rights in Ukraine.’

5        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.’

6        The detailed rules governing that freezing of funds are laid down in Article 1(3) to (6) of Decision 2014/119.

7        In accordance with Decision 2014/119, Regulation No 208/2014 requires measures for the freezing of funds to be adopted and lays down the detailed rules governing that freezing of funds in terms which are identical, in essence, to those used in that decision.

8        The names of the persons covered by the March 2014 acts appear on the list contained in the Annex to Decision 2014/119 and in Annex I to Regulation No 208/2014 (‘the list’) together with, inter alia, the reasons for their listing.

9        The applicant’s name was on the list along with the identifying information ‘son of former President [Yanukovych]; businessman' 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.’

10      By application lodged at the Court Registry on 14 May 2014, the applicant brought an action, registered as Case T‑348/14, seeking, inter alia, the annulment of the March 2014 acts, in so far as they concerned him.

11      On 29 January 2015, the Council adopted Decision (CFSP) 2015/143 amending Decision 2014/119 (OJ 2015 L 24, p. 16) and Regulation (EU) 2015/138 amending Regulation No 208/2014 (OJ 2015 L 24, p. 1).

12      Decision 2015/143 clarified, with effect from 31 January 2015, the listing criteria for persons against whom the freezing of funds is directed. In particular, Article 1(1) of Decision 2014/119 was 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      Regulation 2015/138 amended Regulation No 208/2014 in accordance with Decision 2015/143.

14      On 5 March 2015, the Council adopted Decision (CFSP) 2015/364 amending Decision 2014/119 (OJ 2015 L 62, p. 25) and Implementing Regulation (EU) 2015/357 implementing Regulation No 208/2014 (OJ 2015 L 62, p. 1) (together, ‘the March 2015 acts’). Decision 2015/364, first, replaced Article 5 of Decision 2014/119, by extending the application of the restrictive measures, in so far as the applicant was concerned, until 6 March 2016, and, second, amended the Annex to that decision. Implementing Regulation 2015/357 consequently amended Annex I to Regulation No 208/2014.

15      By the March 2015 acts, the applicant’s name was maintained on the list with the identifying information ‘son of former President, businessman’ and the following new statement of reasons:

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

16      On 8 April 2015, the applicant modified his forms of order in Case T‑348/14 so that they would also cover the annulment of Decision 2015/143, Regulation 2015/138 and the March 2015 acts, in so far as those acts concerned him.

17      On 4 March 2016, the Council adopted Decision (CFSP) 2016/318 amending Decision 2014/119 (OJ 2016 L 60, p. 76) and Implementing Regulation (EU) 2016/311 implementing Regulation No 208/2014 (OJ 2016 L 60, p. 1) (together, ‘the March 2016 acts’).

18      By the March 2016 acts, the application of the restrictive measures was extended to 6 March 2017. The statement of reasons for the applicant’s designation, as set out in the March 2015 acts, was not amended.

19      By application lodged at the Court Registry on 13 May 2016, the applicant brought an action, registered as Case T‑245/16, seeking the annulment of the March 2016 acts, in so far as they concerned him.

20      By judgment of 15 September 2016, Yanukovych v Council (T‑348/14, EU:T:2016:508), the General Court annulled the March 2014 acts, in so far as they concerned the applicant, and dismissed the application for annulment, contained in the amendment to the originating application, concerning, first, Decision 2015/143 and Regulation 2015/138 and, second, the March 2015 acts.

21      On 23 November 2016, the applicant brought an appeal before the Court of Justice of the European Union, registered as Case C‑599/16 P, against the judgment of 15 September 2016, Yanukovych v Council (T‑348/14, EU:T:2016:508).

22      On 3 March 2017, the Council adopted Decision (CFSP) 2017/381 amending Decision 2014/119 (OJ 2017 L 58, p. 34) and Implementing Regulation (EU) 2017/374 implementing Regulation No 208/2014 (OJ 2017 L 58, p. 1) (together, ‘the March 2017 acts’).

23      By the March 2017 acts, the application of the restrictive measures was extended to 6 March 2018. The statement of reasons for the applicant’s designation, as set out in the March 2015 acts and the March 2016 acts, was not amended.

24      By letter dated 6 March 2017, the Council, inter alia, notified the applicant of the time limit for submitting observations prior to a decision being taken regarding the possible maintenance of his name on the list.

25      By application lodged at the Court Registry on 12 May 2017, the applicant brought an action, registered as Case T‑286/17, seeking the annulment of the March 2017 acts, in so far as they concerned him.

26      By judgment of 19 October 2017, Yanukovych v Council (C‑599/16 P, not published, EU:C:2017:785), the Court of Justice dismissed the applicant’s appeal seeking to have the General Court’s judgment of 15 September 2016, Yanukovych v Council (T‑348/14, EU:T:2016:508) set aside in part.

27      By letter dated 29 November 2017, the applicant submitted his observations on the possible maintenance of his name on the list and asked the Council not to renew the restrictive measures taken against him.

28      By letter of 18 December 2017, the Council sent the applicant, inter alia, updated attestations dated 20 October 2017 from the Prosecutor General’s Office of Ukraine (‘the PGO') and addressed to the High Representative of the European Union for Foreign Affairs and Security Policy, concerning the criminal proceedings to which he was subject in Ukraine. In that letter, the Council also informed the applicant that it intended to maintain the restrictive measures against him on the basis of a slightly modified statement of reasons. By letter of 10 January 2018, the applicant submitted his observations.

29      By letters dated 16 January and 8 and 22 February 2018, the Council informed the applicant that it had received further information from the Ukrainian authorities and sent him two letters from the PGO dated 5 January 2018, a letter from the National Anticorruption Bureau of Ukraine dated 6 February 2018 and further information from the European External Action Service (EEAS). The applicant submitted his observations by letters dated 25 January and 16 February 2018.

30      On 5 March 2018, the Council adopted Decision (CFSP) 2018/333 amending Decision 2014/119 (OJ 2018 L 63, p. 48) and Implementing Regulation (EU) 2018/326 implementing Regulation No 208/2014 (OJ 2018 L 63, p. 5) (together, ‘the contested acts’).

31      By the contested acts, the applicant’s name was maintained on the list along with the identifying information ‘son of former President, businessman’ and the following new statement of reasons:

‘Person subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets and for being an accomplice thereto.’

32      By letter of 8 March 2018, the Council informed the applicant that the restrictive measures against him were to be maintained and it then replied to the observations which the applicant had made in previous correspondence and sent him a copy of the contested acts. Furthermore, it notified the applicant of the time limit for submitting observations prior to a decision being taken regarding the possible maintenance of his name on the list.

33      By judgment of 11 July 2019, Yanukovych v Council (T‑245/16 and T‑286/17, not published, EU:T:2019:505), the General Court annulled the March 2016 acts and March 2017 acts, in so far as they concerned the applicant.

 Procedure and forms of order sought

34      By application lodged at the Court Registry on 13 May 2018, the applicant brought an action for annulment of the contested acts.

35      On 26 July 2018, the Council lodged the defence.

36      The reply and the rejoinder were lodged at the Court Registry on 14 September and 26 October 2018, respectively.

37      The written part of the procedure was closed on 26 October 2018.

38      On 19 November 2018, the Council submitted a reasoned application, under Article 66 of the Rules of Procedure of the General Court, for the content of certain documents annexed to the originating application and the defence not to be cited in the documents relating to the case to which the public has access.

39      By document lodged at the Court Registry on 26 November 2018, the applicant requested that a hearing be held.

40      By judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), the Court of Justice set aside the judgment of 7 July 2017, Azarov v Council (T‑215/15, EU:T:2017:479) and annulled the March 2015 acts, in so far as they concerned the applicant in the case giving rise to that judgment.

41      On account of the potential impact of the Court of Justice’s ruling in the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), in the present case, the General Court (Sixth Chamber) decided, in the context of the measures of organisation of procedure laid down in Article 89 of the Rules of Procedure, to ask the parties a written question in order to invite them to state, in writing, their views on the consequences to be drawn from that judgment in the present case. The parties complied with that request within the time allowed.

42      By decision of the President of the Sixth Chamber of the General Court of 30 April 2019, the present case and Case T‑300/18, Yanukovych v Council, were joined for the purpose of the oral part of the procedure, on the basis of Article 68 of the Rules of Procedure, the parties having been heard in that respect.

43      Acting on a proposal from the Judge-Rapporteur, the General Court (Sixth Chamber) decided to open the oral part of the procedure.

44      The parties presented oral argument and replied to the questions put to them by the General Court at the hearing on 6 June 2019.

45      The applicant claims that the Court should:

–        annul the contested acts, in so far as they concern him;

–        order the Council to pay the costs.

46      The Council contends that the Court should:

–        dismiss the action;

–        in the alternative, should the contested acts be annulled as regards the applicant, order that the effects of Decision 2018/333 be maintained until the partial annulment of Implementing Regulation 2018/326 takes effect;

–        order the applicant to pay the costs.

 Law

47      In support of the action, the applicant relies, in the originating application, on seven pleas in law, alleging (i) failure to comply with the criteria for inclusion on the list, (ii) manifest error of assessment, (iii) failure to state reasons, (iv) infringement of the rights of the defence and of the right to effective judicial protection, (v) lack of a legal basis, (vi) misuse of power and (vii) infringement of the right to property. In his reply to the question referred to in paragraph 41 above, the applicant submits that, in the present case, the principles arising from the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031) mean that the contested acts must be annulled.

48      The Council, for its part, in the defence, contests the merits of the applicant’s pleas in law mentioned in paragraph 47 above. In its reply to the question referred to in paragraph 41 above and at the hearing, it maintained moreover that the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), did not affect the present case, since the applicant, in his submissions, had not raised a plea similar to that accepted by the Court of Justice in that judgment and such a plea does not involve a matter of public policy. In the alternative, the Council claimed that that plea was, in any event, unfounded in the present case.

49      As a preliminary point, it is therefore appropriate to recall the principles stemming from, inter alia, the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), which are likely to have a significant bearing on the present case.

 Preliminary observations

50      It is apparent from settled case-law that, in a review of restrictive measures, the Courts of the European Union must ensure the review, in principle the full review, of the lawfulness of all Union acts in the light of the fundamental rights forming an integral part of the EU legal order, which include, inter alia, respect for the rights of the defence and the right to effective judicial protection (see judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraphs 20 and 21 and the case-law cited).

51      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 are 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 are to ensure that that decision, which affects that person individually, is taken on a sufficiently solid factual basis. That 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 (see judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraph 22 and the case-law cited).

52      The adoption and the maintenance of restrictive measures, such as those laid down in the March 2014 acts, as amended, taken against a person who has been identified as responsible for the misappropriation of funds of a third State are based, in essence, on the decision of an authority of that state, which was competent to make it, to initiate and conduct criminal investigation proceedings concerning that person and relating to an offence of misappropriation of public funds (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraph 25).

53      In addition, whereas, under the listing criterion, as referred to in paragraph 12 above, the Council can base restrictive measures on the decision of a third State, the obligation, on that institution, to respect the rights of the defence and the right to effective judicial protection means that it must satisfy itself that those rights were complied with by the authorities of the third State which adopted that decision (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraphs 26, 27 and 35).

54      In that regard, the Court of Justice states that the requirement for the Council to verify that the decisions of third States, on which it intends to rely, have been taken in accordance with those rights is designed to ensure that the adoption or the maintenance of the measures for the freezing of funds occurs only on a sufficiently solid factual basis and, accordingly, to protect the persons or entities concerned. Thus, the Council cannot conclude that the adoption or the maintenance of such measures is taken on a sufficiently solid factual basis before having itself verified that the rights of the defence and the right to effective judicial protection were complied with at the time of the adoption of the decision by the third State in question on which it intends to rely (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraphs 28 and 34 and the case-law cited).

55      Moreover, although it is true that the fact that a third State is among the States which acceded to the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), entails review, by the European Court of Human Rights, of the fundamental rights guaranteed by the ECHR, which, in accordance with Article 6(3) TEU, form part of EU law as general principles, that fact cannot render superfluous the verification requirement referred to in paragraph 54 above (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraph 36).

56      The Court of Justice also held that the Council must refer, if only briefly, in the statement of reasons relating to the adoption or the maintenance of the restrictive measures against a person or entity, to the reasons why it considers the decision of the third State on which it intends to rely to have been adopted in accordance with the rights of the defence and the right to effective judicial protection. Thus, it is for the Council, in order to fulfil its obligation to state reasons, to show, in the decision imposing restrictive measures, that it has verified that the decision of the third State on which those measures are based was taken in accordance with those rights (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraphs 29 and 30 and the case-law cited).

57      Ultimately, when it bases the adoption or the maintenance of restrictive measures, such as those in the present case, on the decision of a third State to initiate and conduct criminal proceedings for misappropriation of public funds or assets by the person concerned, the Council must, first, ensure that, at the time of the adoption of that decision, the authorities of that third State have complied with the rights of the defence and the right to effective judicial protection of the person against whom the criminal proceedings at issue have been brought and, second, refer to, in the decision imposing restrictive measures, the reasons for which it considers that that decision of the third State has been adopted in accordance with those rights.

58      In the case in point, in its response to the written question referred to in paragraph 41 above, the applicant states that the Court of Justice’s reasoning and conclusion in the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031) are of significant importance in the present case, since the circumstances which triggered the Council’s verification obligation in the case giving rise to that judgment are, in essence, identical to those leading to the adoption of the contested acts. Thus, first, the applicant complains that the Council did not verify, as it considered that it was not under an obligation to do so, whether the decision of the Ukrainian authorities, on which it intended to rely in order to maintain the applicant’s name on the list, had been adopted in accordance with the applicant’s rights of defence and his right to effective judicial protection. Second, he criticises the Council for failing to indicate, in the statement of reasons justifying the maintenance of his name on the list, the reasons why the Council considered that that decision of the Ukrainian authorities had been adopted in accordance with those rights. Moreover, the Council’s letter of 8 March 2018, notifying the applicant of the renewal of the restrictive measures against him, fails to mention any such reasons.

59      By contrast, the Council contends that the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), has no bearing on the present case, since the applicant did not raise, in his submissions, a plea in law alleging infringement of the Council’s obligation to verify whether the decision of an authority of a third State to initiate and conduct criminal proceedings concerning an offence of misappropriation of public funds was adopted in accordance with the rights of the defence and the right to effective judicial protection. The applicant’s arguments concerning an alleged infringement of fundamental rights, on the one hand, are of a very general nature, and on the other hand, referred to proceedings which are not related to the proceedings on which the Council relied. According to the Council, such a plea does not involve a matter of public policy and cannot therefore be raised by the General Court of its own motion.

60      At the hearing, the applicant contested the Council’s plea of inadmissibility against his plea in law concerning the Council’s verification obligation and claimed that that plea in law could not be dismissed on the ground that it was a new plea and, in any event, in so far as the statement of reasons for the contested acts was concerned, it was a plea involving a matter of public policy which could be raised by the General Court of its own motion.

61      In those circumstances, it is necessary to rule on the plea of inadmissibility which the Council has, in essence, raised with regard to the argument relied on by the applicant in his reply to the question referred to in paragraph 41 above.

 The plea of inadmissibility raised by the Council

62      The plea of inadmissibility raised by the Council consists, in essence, in maintaining, as it confirmed at the hearing in response to a question from the General Court, that the applicant, when relying on the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), invokes a new plea, without complying with the conditions laid down for that purpose in Article 84 of the Rules of Procedure and without that plea involving a matter of public policy.

63      Article 84 of the Rules of Procedure reads as follows:

‘1.      No new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure.

2.      Any new pleas in law shall be introduced in the second exchange of pleadings and identified as such. Where the matters of law or of fact justifying the introduction of new pleas in law are known after the second exchange of pleadings or after it has been decided not to authorise a second exchange of pleadings, the main party concerned shall introduce the new pleas in law as soon as those matters come to his knowledge ...’

64      In that regard, in the first place, it should be noted that, in principle, the introduction of a new plea must comply with the requirements laid down in Article 84 of the Rules of Procedure. However, those requirements do not apply where a plea, although it may be qualified as new, is a plea involving a matter of public policy (see, to that effect, judgments of 15 September 2016, La Ferla v Commission and ECHA, T‑392/13, EU:T:2016:478, paragraph 65, and of 20 July 2017, Badica and Kardiam v Council, T‑619/15, EU:T:2017:532, paragraphs 40 to 43).

65      According to settled case-law, in the context of an action for annulment, a plea involving a matter of public policy may be invoked by the parties at any stage of the proceedings, since such a plea may, or even must, be raised by the court of its own motion (judgments of 8 July 2004, Mannesmannröhren-Werke v Commission, T‑44/00, EU:T:2004:218, paragraph 210, and of 14 April 2015, Ayadi v Commission, T‑527/09 RENV, not published, EU:T:2015:205, paragraph 44; see also, to that effect, judgments of 20 February 1997, Commission v Daffix, C‑166/95 P, EU:C:1997:73, paragraphs 23 to 25, and of 3 May 2018, Malta v Commission, T‑653/16, EU:T:2018:241, paragraphs 47 and 48). According to that case-law, a plea based on the absence of or an inadequate statement of reasons of an EU act constitutes a plea involving a matter of public policy.

66      In its judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), the Court of Justice, having found that the judgment of 7 July 2017, Azarov v Council, (T‑215/15, EU:T:2017:479), should be set aside, found that the state of the proceedings allowed final judgment to be given and annulled the acts at issue. For that purpose, it noted that it was in no way apparent from the statement of reasons for those acts that the Council had verified that the Ukrainian judicial authorities had respected the rights of defence and the right to effective judicial protection of the person concerned and it referred to the grounds it had set out in paragraphs 25 to 30 and 34 to 42 of its judgment (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraphs 43 to 46).

67      In particular, paragraph 30 of the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), clearly states that ‘it is for the Council, in order to fulfil its obligation to state reasons, to show, in the decision imposing the restrictive measures, that it has verified that the decision of the third State on which those measures are based was taken in accordance with [the rights of the defence and the right to effective judicial protection]’.

68      In addition, paragraph 30 of the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), refers to paragraph 37 of the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583), in which the Court of Justice had clearly stated that ‘the statements of reasons for [the contested] regulations [did] not, therefore, disclose whether the Council [had] fulfilled its verification obligation’, and it had concluded, in paragraph 38 of that judgment, that the General Court had correctly found that the acts at issue ‘were vitiated by a failure to give sufficient reasons’.

69      It follows from those elements that, in the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), the Court of Justice ultimately found that the statement of reasons for the acts at issue was insufficient so far as concerns the way in which the Council had verified compliance with the rights of the defence and the right to effective judicial protection by the Ukrainian authorities in the criminal proceedings for misappropriation of public funds which formed the basis of the restrictive measures adopted and maintained by the Council against the applicant in the case giving rise to that judgment.

70      Admittedly, the Court of Justice’s choice, in the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), to approach the question of compliance with the rights at issue by the Ukrainian authorities from the perspective of the Council’s compliance with the obligation to state reasons does not equate to the arguments that the applicant, in the case giving rise to the judgment of 7 July 2017, Azarov v Council (T‑215/15, EU:T:2017:479), had invoked in relation to the Council’s obligation to verify that the level of protection of fundamental rights guaranteed in Ukraine was equivalent to that existing in the Union. Those arguments were not part of its plea alleging infringement of the obligation to state reasons, but of that alleging that the Council had made a manifest error of assessment, as is apparent from paragraph 166 of that judgment, as well as, moreover, paragraph 41 of the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031).

71      However, in the light of the elements put forward in paragraphs 66 to 69 above, it is clear, as the applicant pointed out at the hearing, that in the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), the Court of Justice focused on the obligation to state reasons.

72      Thus, since the Court of Justice, in its judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), annulled the acts at issue on the basis of a plea involving a matter of public policy, the Council’s plea of inadmissibility summarised in paragraph 59 above must be rejected.

73      That conclusion cannot be called in question by the argument, which the Council derived indirectly, at the hearing, from paragraph 40 of the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), according to which, had it really been question of a plea involving a matter of public policy, the Court of Justice would have also made that observation in the case giving rise to the judgment of 19 October 2017, Yanukovych v Council (C‑599/16 P, not published, EU:C:2017:785), which was subsequent to the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583). The fact that the Court of Justice did not raise such a plea of its own motion in the context of that case cannot be interpreted as precluding, in the present case, the existence of a failure to state reasons for the contested acts that may be raised by the General Court of its own motion as a plea involving a matter of public policy.

74      In the second place, in any event, it should be recalled that, according to settled case-law, whereas the introduction of new pleas in law in the course of proceedings is, in principle, prohibited, a plea, or a grievance, however, which amounts to amplifying a plea or grievance put forward previously, whether directly or by implication, in the originating application and which is closely connected therewith must be declared admissible (see, to that effect, judgments of 11 July 2013, Ziegler v Commission, C‑439/11 P, EU:C:2013:513, paragraph 46, and of 26 February 2016, Bodson and Others v EIB, T‑240/14 P, EU:T:2016:104, paragraph 30).

75      In the present case, as the Council points out, without being contradicted by the applicant, it is true that the latter did not derive any arguments, in his pleadings, from the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583). It should nevertheless be noted that the applicant has claimed, on numerous occasions, that (i) the Ukrainian authorities had infringed his rights of defence and his right to effective judicial protection, (ii) the situation in Ukraine was generally incompatible with the existence of sufficient guarantees, (iii) the decision to maintain his name on the list had not been adopted on a sufficiently solid factual basis, (iv) the criminal proceedings on which the Council had relied had already been ongoing for four years, with no apparent outcome set out by the PGO and (v) that static situation showed that the Ukrainian authorities wished to maintain pressure on the applicant and that they would continue to allege the existence of such proceedings to impose the freezing of funds resulting from the measures at issue.

76      It must be stated that the arguments put forward by the applicant in his reply to the question referred to in paragraph 41 above, as summarised in paragraph 58 above, are closely linked to the arguments mentioned in paragraph 75 above. Thus, regardless of whether this is a plea involving a matter of public policy, the applicant cannot be considered as being precluded from asking the General Court to follow, in the present case, the same approach as that of the Court of Justice in the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031).

77      In the third place, it must be recalled that the principle of prohibiting the introduction of new pleas is subject to an exception, in that the introduction of a new plea is permitted where such pleas are based on legal or factual elements which came to light in the course of the procedure, as provided for in Article 84 of the Rules of Procedure (see paragraph 63 above).

78      In that regard, it has been held that although, admittedly, case-law emanating from the Courts of the European Union which merely confirms law which ought to have been known to the applicant when he brought his action cannot be regarded as a new matter allowing a fresh plea to be raised, the position is otherwise with case-law which provides further clarifications (see, to that effect, judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 125 and the case-law cited).

79      In the present case, when the applicant brought the action, there existed case-law from the General Court according to which, first, the approach taken in the judgment of 16 October 2014, LTTE v Council (T‑208/11 and T‑508/11, EU:T:2014:885), could not be applied in the context of the restrictive measures taken by the Council in view of the situation in Ukraine and, second, only if the Council’s political decision to support the new Ukrainian regime proved to be manifestly erroneous could any inconsistency between the protection of fundamental rights in Ukraine and that in place in the European Union have a bearing on the legality of those measures (see, to that effect, judgments of 7 July 2017, Azarov v Council, T‑215/15, EU:T:2017:479, paragraphs 166 to 178, and of 8 November 2017, Klymenko v Council, T‑245/15, not published, under appeal, EU:T:2017:792, paragraphs 218 to 232). However, by judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), the Court of Justice reversed that case-law of the General Court, which must be regarded, as the applicant argued at the hearing, as a matter of law capable of justifying the introduction of a new plea or complaint.

80      It follows from the foregoing considerations that the applicant’s argument based on the principles stemming in particular from the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), as they result from paragraphs 50 to 57 above, is admissible.

 Substance

81      The arguments which the applicant derives from the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031) have been summarised in paragraph 58 above.

82      The Council maintains that, although it did not specifically refer to judicial oversight in the statement of reasons for the contested acts, during the adoption of those acts, it knew that such oversight had been carried out in Ukraine, as several letters from the PGO show. It contends that those letters are evidence of several judicial decisions taken in Ukraine against the applicant, such as a decision of the Pechersk District Court (Kiev) of 11 October 2016, granting permission for his detention and his compelled appearance before that court and the decision of the investigating judge of the Pechersk District Court of 7 February 2018 to refer back to the PGO the application for a special pre-trial investigation. In addition, respect for the applicant’s rights of defence and his right to effective judicial protection is demonstrated by decisions concerning the seizure of his property made by Pechersk Court and the fact that the applicant lodged, before that court, an application for annulment of the PGO’s decision of 11 October 2017 dismissing his application seeking that no further action be taken in a set of criminal proceedings against him.

83      According to the Council, those examples show that, when it relied on the decisions of the Ukrainian authorities referred to in the PGO’s letters, it was able to verify that such decisions had been taken in accordance with the applicant’s rights of defence and his right to effective judicial protection.

84      As a preliminary point, it must be noted that the applicant is subject to new restrictive measures adopted by means of the contested acts on the basis of the listing criterion set out in Article 1(1) of Decision 2014/119, as clarified in Decision 2015/143, and in Article 3 of Regulation No 208/2014, as clarified in Regulation 2015/138 (see paragraphs 12 and 13 above). That criterion provides for the freezing of funds of persons who have been identified as responsible for the misappropriation of public funds, including persons subject to investigation by the Ukrainian authorities.

85      It is common ground that the Council, in order to decide to maintain the applicant’s name on the list, relied on the fact that he was subject to ‘criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets and for being an accomplice thereto’, which was evidenced by the PGO’s letters, a copy of which the applicant had received (see paragraphs 28 and 29 above).

86      The maintenance of the restrictive measures taken against the applicant was therefore based, as in the case giving rise to the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), on the PGO’s decision to initiate and conduct criminal investigation proceedings concerning an offence of misappropriation of Ukrainian State funds.

87      In the first place, the fact remains that the statement of reasons for the contested acts relating to the applicant (see paragraph 31 above) does not include a single reference to the fact that the Council verified compliance, by the Ukrainian judicial authorities, with the applicant’s rights of defence and his right to effective judicial protection and that, therefore, such a failure to refer to those reasons amounts to an early indication that the Council did not carry out such a verification.

88      In the second place, it must be noted that none of the information contained in the letter of 8 March 2018 (see paragraph 32 above) makes it possible to consider that the Council had information relating to compliance with the rights at issue by the Ukrainian authorities so far as concerned the criminal proceedings against the applicant and, even less so, that the Council had assessed such information, in order to verify that those rights had been sufficiently complied with by the Ukrainian judicial authorities at the time of the adoption of the decision to initiate and conduct criminal investigation proceedings concerning an offence of misappropriation of public funds or assets committed by the applicant. In that letter, as in the case giving rise to the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031, paragraph 24), the Council merely stated that the PGO’s letters, supplied to the applicant beforehand (see paragraphs 28 and 29 above) showed that the applicant continued to be subject to criminal proceedings for misappropriation of public funds or assets.

89      In the third place, it must be observed that, contrary to its claims, the Council was under an obligation to verify compliance with the rights of the defence and the right to effective judicial protection irrespective of any evidence adduced by the applicant to show that, in the present case, his personal situation had been affected by the problems which he pointed out relating to the functioning of the judicial system in Ukraine. In any event, although the applicant had claimed, by adducing evidence, that the Ukrainian judicial authorities had infringed his rights of defence and his right to effective judicial protection and that the situation in Ukraine was generally incompatible with the existence of sufficient guarantees in that regard, the Council did not maintain that it had verified compliance with such rights. On the contrary, it repeatedly stated in its pleadings that it was not under any obligation to do so and that such obligation did not stem either from the case-law principles laid down in the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583), relied on by the applicant.

90      In the fourth place, it should be recalled that, in its reply to the question on the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), the Council, as regards the substance, merely put forward the arguments summarised in paragraphs 82 and 83 above.

91      In that regard, first, it must be noted that the Council accepts that the statement of reasons for the contested acts does not explicitly cover the issue of compliance with the rights of the defence and the right to effective judicial protection in the light of the decision to initiate and conduct the criminal proceedings justifying the inclusion and maintenance of the applicant’s name on the list.

92      Second, it must be noted that the Council claims that it is clear from the file before the Court in the present case that the conduct of the criminal investigations had been subject to judicial oversight in Ukraine. More specifically, according to the Council, the existence of several judicial decisions adopted in the context of the criminal proceedings against the applicant shows that, when it relied on the decision of the Ukrainian authorities referred in the PGO’s letters, (i) it was able to verify that that decision had been taken in accordance with the rights of the defence and the right to effective judicial protection and (ii) it checked that a certain number of judicial decisions in the context of those criminal proceedings had been taken in accordance with those rights.

93      All the judicial decisions mentioned by the Council fall within the scope of the criminal proceedings which justified the inclusion and maintenance of the applicant’s name on the list and are merely incidental in the light of those proceedings, since they are either restrictive or procedural in nature. It is true that those decisions are capable of supporting the Council’s argument concerning the existence of a sufficiently solid factual basis, namely the fact that, in accordance with the listing criterion, the applicant was subject to criminal proceedings concerning, inter alia, an offence of misappropriation of Ukrainian State funds or assets. However, such decisions are not ontologically capable, alone, of demonstrating, as the Council maintains, that the decision of the Ukrainian judicial authorities to initiate and conduct those criminal proceedings, on which the maintenance of the restrictive measures directed against the applicant is, in essence, based, was taken in accordance with his rights of defence and his right to effective judicial protection.

94      In any event, it must be noted, as the applicant did, that the Council is not in a position to refer to any document in the file of the procedure which resulted in the adoption of the contested acts showing that it actually examined the decisions of the Ukrainian courts on which it relies now and from which it was able to conclude that the essence of the applicant’s rights of defence and his right to effective judicial protection had been complied with.

95      Indeed, the Council does not even seek to explain how the existence of those decisions makes it possible to consider that the protection of the rights at issue had been guaranteed, even if, as the applicant had claimed on several occasions in his letters sent to the Council, those proceedings, which had already been ongoing for several years, and had been, in some instances, suspended or transferred several times between investigation bureaux, were still at the pre-trial investigation stage and had been brought before a Ukrainian court for the consideration not of the substance but, at most, of mere procedural questions.

96      In that regard, it should be noted that Article 6(1) of the ECHR provides that in the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. That right relates to the principle of effective judicial protection which has, moreover, been enshrined in Article 47 of the Charter of Fundamental Rights (see, to that effect, judgment of 16 July 2009, Der Grüne Punkt — Duales System Deutschland v Commission, C‑385/07 P, EU:C:2009:456, paragraphs 177 and 179).

97      In addition, the European Court of Human Rights noted, first, that the purpose of the reasonable time principle was, inter alia, to protect a person charged with a criminal offence against excessive procedural delays, to avoid leaving that person in a state of uncertainty about his or her fate too long and to prevent delays which might jeopardise the effectiveness and credibility of the administration of justice (see ECtHR, 7 July 2015, Rutkowski and Others v. Poland, CE:ECHR:2015:0707JUD007228710, § 126 and the case-law cited) and, second, that infringement of that principle could be established, inter alia, when the investigation stage of criminal proceedings was characterised by a certain number of periods of inactivity attributable to the authorities with competence to conduct that investigation (see, to that effect, ECtHR, 6 January 2004, Rouille v. France, CE:ECHR:2004:0106JUD005026899, §§ 29 to 31; 27 September 2007, Reiner and Others v. Romania, CE:ECHR:2007:0927JUD000150502, §§ 57 to 59; and 12 January 2012, Borisenko v. Ukraine, CE:ECHR:2012:0112JUD002572502, §§ 58 to 62).

98      Furthermore, it follows from the case-law that, where a person has been subject to restrictive measures for several years, on account, in essence, of the same preliminary investigations — including some which have been suspended — conducted by the PGO, the Council is required to explore in greater detail the question of a possible infringement of the fundamental rights of that person by the Ukrainian authorities (see, to that effect, judgment of 30 January 2019, Stavytskyi v Council, T‑290/17, EU:T:2019:37, paragraph 132).

99      Therefore, in the present case, the Council should have at the very least indicated the reasons for which it could consider that the applicant’s right to effective judicial protection before the Ukrainian judicial authorities, which is clearly a fundamental right, had been complied with so far as concerns the question of establishing whether his case had been heard within a reasonable time.

100    It cannot therefore be found that the information available to the Council at the time of the adoption of the contested acts enabled it to verify that the decision of the Ukrainian judicial authorities on which, in essence, the maintenance of the restrictive measures directed against the applicant are based had been taken in accordance with his rights.

101    Furthermore, in that regard, it must also be noted, as the Court of Justice made clear in the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), that the case-law of the Court of Justice — according to which, in particular, in the event of the adoption of a decision to freeze funds such as that adopted in respect of the applicant, it is not for the Council or General Court to verify whether or not the investigations to which the person concerned by those measures was subject were well founded, but only to verify whether that was the case in relation to the decision to freeze funds in the light of the document or documents on which that decision was based (see, to that effect, judgments of 5 March 2015, Ezz and Others v Council, C‑220/14 P, EU:C:2015:147, paragraph 77; of 19 October 2017, Yanukovych v Council, C‑599/16 P, not published, EU:C:2017:785, paragraph 69; and of 19 October 2017, Yanukovych v Council, C‑598/16 P, not published, EU:C:2017:786, paragraph 72) — cannot be interpreted as meaning that the Council is not required to verify that the decision of the third State on which it intends to base the adoption of restrictive measures was taken in accordance with the rights of the defence and the right to effective judicial protection (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraph 40 and the case-law cited). 

102    In the light of the foregoing, it has not been established that the Council, prior to the adoption of the contested acts, verified that the Ukrainian judicial authorities complied with the applicant’s rights of defence and his right to effective judicial protection.

103    In those circumstances, the contested acts must be annulled in so far as they concern the applicant, without it being necessary to examine the other pleas in law and arguments put forward by the applicant or the request for confidential treatment submitted by the Council.

104    With respect to the Council’s alternative claim (see paragraph 46, second indent, above), seeking, in essence, that the effects of Decision 2018/333 be maintained until the expiry of the period of time allowed for bringing an appeal and, in the event that an appeal is lodged, until the decision ruling on that appeal, it is sufficient to observe that Decision 2018/333 was effective only until 6 March 2019. Consequently, the annulment of that decision by the present judgment has no effect on the period after that date, so that it is not necessary to rule on the question of maintaining the effects of that decision (see, to that effect, judgment of 6 June 2018, Arbuzov v Council, T‑258/17, EU:T:2018:331, paragraph 107 and the case-law cited).

 Costs

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

hereby:

1.      Annuls Council Decision (CFSP) 2018/333 of 5 March 2018 amending 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) 2018/326 of 5 March 2018 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 Mr Oleksandr Viktorovych Yanukovych’s name was maintained on the list of persons, entities and bodies subject to those restrictive measures;

2.      Orders the Council of the European Union to pay the costs.

Delivered in open court in Luxembourg on 24 September 2019.

Table of contents

Factual background to the dispute

Procedure and forms of order sought

Law

Preliminary observations

The plea of inadmissibility raised by the Council

Substance

Costs

*      Language of the case: English.

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