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

JUDGMENT OF THE GENERAL COURT (Fourth Chamber)

18 September 2024 (*)

( Common foreign and security policy – Restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine – Freezing of funds – Lists of persons, entities and bodies subject to the freezing of funds and economic resources – Inclusion of the applicant’s name on the list – Support for the regime – Financial support – Benefiting from the regime – Error of assessment )

In Case T‑534/22,

Belarusian Potash Company AAT, established in Minsk (Belarus), represented by V. Ostrovskis, lawyer,

applicant,

v

Council of the European Union, represented by J. Rurarz and A. Boggio‑Tomasaz, acting as Agents,

defendant,

supported by

Republic of Latvia, represented by K. Pommere and J. Davidoviča, acting as Agents,

intervener,

THE GENERAL COURT (Fourth Chamber),

composed of R. da Silva Passos, President, S. Gervasoni and N. Półtorak (Rapporteur), Judges,

Registrar: V. Di Bucci,

having regard to the written part of the procedure,

having regard to the fact that no request for a hearing was submitted by the parties within three weeks after service of notification of the close of the written part of the procedure, and having decided to rule on the action without an oral part of the procedure, pursuant to Article 106(3) of the Rules of Procedure of the General Court,

gives the following

Judgment

1        By its action under Article 263 TFEU, the applicant, Belarusian Potash Company AAT, seeks annulment of (i) Council Implementing Decision (CFSP) 2022/881 of 3 June 2022 implementing Decision 2012/642/CFSP concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (OJ 2022 L 153, p. 77) and Council Implementing Regulation (EU) 2022/876 of 3 June 2022 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (OJ 2022 L 153, p. 1) (together, ‘the initial acts’), and (ii) Council Decision (CFSP) 2023/421 of 24 February 2023 amending Decision 2012/642 (OJ 2023 L 61, p. 41) and Council Implementing Regulation (EU) 2023/419 of 24 February 2023 implementing Article 8a of Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (OJ 2023 L 61, p. 20) (together, ‘the maintaining acts’), in so far as those acts concern the applicant.

 Background to the dispute and events subsequent to the bringing of the action

2        The applicant is a company, established in Minsk (Belarus), that sells and exports potassium fertilisers.

3        The present case has been brought in the context of the restrictive measures adopted by the European Union since 2004 in view of the situation in Belarus with regard to democracy, the rule of law and human rights, and the involvement of Belarus in the Russian aggression against Ukraine.

4        On 18 May 2006, the Council of the European Union adopted, pursuant to Articles [75 and 215 TFEU], Regulation (EC) No 765/2006 concerning restrictive measures against President Lukashenko and certain officials of Belarus (OJ 2006 L 134, p. 1) and, on 15 October 2012, it adopted, pursuant to Article 29 TEU, Decision 2012/642/CFSP concerning restrictive measures against Belarus (OJ 2012 L 285, p. 1).

5        In the versions applicable when the initial acts were adopted, Article 4(1)(b) of Decision 2012/642 and Article 2(1) and (5) of Regulation No 765/2006 provide for the freezing of all funds and economic resources belonging to, owned, held or controlled by, inter alia, natural or legal persons, entities or bodies benefiting from or supporting the Lukashenko regime.

6        On 24 February 2022, the President of the Russian Federation announced a military operation in Ukraine and, on the same day, Russian armed forces attacked Ukraine at a number of places in the country.

7        On 24 February 2022, the High Representative of the Union for Foreign Affairs and Security Policy published a declaration on behalf of the European Union condemning the ‘unprovoked invasion’ of Ukraine by the armed forces of the Russian Federation and stated that ‘the price to be paid for the involvement of Belarus in the unjustified and unprovoked military aggression [then] being conducted against Ukraine will be high’ and that ‘those who, in Belarus, collaborate[d] in these attacks against Ukraine [were to be targeted by restrictive measures] and trade in a certain number of key sectors [was to be restricted]’.

8        As is apparent from the second recital and the citations of the initial acts, those acts were adopted in view of the gravity of the situation in Belarus and in reaction to the persistent human rights violations and systematic repression of civil society and democratic opposition. The citations of the initial acts also refer to the involvement of Belarus in the Russian aggression against Ukraine.

9        By the initial acts, the applicant was listed under entry No 29 in Table B of the list of persons, entities and bodies subject to the restrictive measures contained in the annex to Decision 2012/642 and in Annex I to Regulation No 765/2006 (together, ‘the lists at issue’).

10      In the initial acts, the Council justified including the applicant on the lists at issue on the following grounds:

‘JSC Belarusian Potash Company is the exporting arm of Belarusian state potash producer Belaruskali. Belaruskali is one of the largest sources of revenue for the [Lukashenko] regime. Supplies from the Belarusian Potash Company account for 20% of global potash exports.

The state guarantees the Belarusian Potash Company monopoly rights to export potassium fertilisers. Thanks to preferential treatment from the Belarusian authorities, the company earns a substantial revenue. Therefore, the Belarusian Potash Company benefits from and supports the [Lukashenko] regime.’

11      On 7 June 2022, the Council published a Notice for the attention of persons subject to the restrictive measures provided for in the initial acts (OJ 2022 C 221, p. 2) in the Official Journal of the European Union. The natural and legal persons concerned by that notice had the possibility, pursuant to that notice, of submitting to the Council, by 30 November 2022, a request for reconsideration of the decision to include them on the lists at issue.

12      By letter of 29 June 2022, the applicant asked the Council for the evidence on which it had based the initial acts.

13      On 22 July 2022, the applicant received the working documents bearing the references WK 5541/2022 INIT, WK 6656/2022 INIT and WK 6656/2022 ADD 1, respectively.

14      By letter of 30 November 2022, the applicant lodged a request with the Council for reconsideration of its inclusion on the lists at issue by the initial acts.

15      By letter of 21 December 2022, the Council informed the applicant of its intention to maintain the restrictive measures against it, and sent to it working document WK 17501/2022 INIT, dated 13 December 2022.

16      On 12 January 2023, the applicant submitted its observations to the Council.

17      On 24 February 2023, in response to the request for reconsideration, the Council sent the applicant an official letter in which it reiterated the allegations made in the initial statement of reasons. In the same letter, the Council informed the applicant that it had decided to continue to include the applicant on the lists at issue.

18      By way of the maintaining acts, the measures taken against the applicant were extended to 28 February 2024, on the same grounds as those set out in the initial acts, with the addition – by the first sentence of the second paragraph – of the following clarification: ‘The state guaranteed the Belarusian Potash Company monopoly rights to export potassium fertilisers.’

 Procedure and forms of order sought

19      The applicant claims that the Court should:

–        annul the initial and maintaining acts in so far as they concern it;

–        order the Council to pay the costs.

20      The Council contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

21      The Republic of Latvia submits that the Court should dismiss the action.

 Law

22      It is appropriate to examine, in the first place, the application for partial annulment of the initial acts and then, in the second place, the application for partial annulment of the maintaining acts.

 The application for partial annulment of the initial acts

23      In support of its application for partial annulment of the initial acts, the applicant raises four pleas in law, alleging (i) infringement of the principle of legality of the initial acts in so far as they concern it; (ii) infringement of the right to effective judicial protection and of the obligation to state reasons; (iii) manifest error of assessment; and (iv) infringement of the principle of proportionality.

24      It is appropriate to begin by examining the second plea.

 The second plea, alleging infringement of the right to effective judicial protection and of the obligation to state reasons

25      The applicant claims that it is not in a position to understand the reasons behind the Council’s decision to include it on the list of sanctioned persons or properly to challenge that decision. The statement of reasons provided by the Council refers to the same factual allegations to demonstrate that the criteria of ‘support’ and ‘benefit’ are met. The Council drew no distinction between those two criteria, even though the case-law requires it to do so. The applicant maintains that its rights of defence were therefore infringed and the Council failed to fulfil its obligation to give specific and clear reasons for compliance with those criteria. The applicant adds that most of the information provided by the Council is either false or outdated.

26      The Council, supported by the Republic of Latvia, disputes that line of argument.

27      It should be recalled that, according to settled case-law, the purpose of the obligation to state the reasons on which an act adversely affecting an individual is based, which is a corollary of the principle of respect for the rights of the defence, is, first, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the Courts of the European Union and, second, to enable those courts to review the legality of that act (see judgment of 23 September 2014, Ipatau v Council, T‑646/11, not published, EU:T:2014:800, paragraph 92 and the case-law cited).

28      The statement of reasons required by Article 296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measures in such a way as to enable the person concerned to ascertain the reasons for the measures and to enable the court having jurisdiction to exercise its power of review (see judgment of 23 September 2014, Ipatau v Council, T‑646/11, not published, EU:T:2014:800, paragraph 93 and the case-law cited).

29      The statement of reasons for an act of the Council which imposes a restrictive measure must not only identify the legal basis of that act but also the actual and specific reasons why the Council considers, in the exercise of its discretion, that such a measure must be adopted in respect of the party concerned (see judgment of 24 May 2023, Lyubetskaya v Council, T‑556/21, not published, EU:T:2023:283, paragraph 19 and the case-law cited).

30      The statement of reasons required by Article 296 TFEU must, however, be appropriate to the act at issue and the context in which it was adopted. The requirement to state reasons must be assessed in the light of the circumstances of the case, in particular the content of the act, the nature of the reasons given and the interest which the addressees or other persons affected by the act within the meaning of the fourth paragraph of Article 263 TFEU may have in receiving explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment of 23 September 2014, Ipatau v Council, T‑646/11, not published, EU:T:2014:800, paragraph 95 and the case-law cited).

31      In particular, the reasons given for a measure adversely affecting a person are sufficient if that measure was adopted in a context which was known to that person and which enables him or her to understand the scope of the measure concerning him or her (see judgment of 23 September 2014, Ipatau v Council, T‑646/11, not published, EU:T:2014:800, paragraph 96 and the case-law cited).

32      As is clear from the statement, recalled in paragraph 10 above, of reasons justifying the inclusion of the applicant on the lists at issue, the latter was included on those lists because (i) it is the exporting arm of the Belarusian State potash producer, Belaruskali, which is a major source of revenue for the Lukashenko regime, and (ii) the State guarantees the applicant’s monopoly rights to export potassium fertilisers. As a result of preferential treatment from the Belarusian authorities, the applicant earns substantial revenue. Consequently, the applicant benefits from and supports the Lukashenko regime.

33      In that connection, the use, in that statement of reasons, of the wording ‘benefits from and supports the [Lukashenko] regime’ refers explicitly to the listing criteria at issue mentioned in paragraph 5 above, from which it is apparent that persons, entities or bodies identified as benefiting from or supporting the Lukashenko regime are to be included on the lists at issue. The applicant could thus readily understand the criteria on which its inclusion on the lists at issue was based.

34      In order for the statement of reasons for the initial acts to be sufficient, there was no need to distinguish between the facts depending on whether they corresponded to the act of ‘supporting’ or to that of ‘benefiting’ from the regime, in particular because the factual allegations may be indicative of both ‘supporting’ and ‘benefiting’ from that regime.

35      Thus, with a view to ensuring that the reasons for the initial acts are stated to the requisite legal standard, the Council is not required to distinguish between the facts that have been established in order to conclude that the person in question supports the Lukashenko regime and benefits from it.

36      Furthermore, it is clear that the initial acts also refer to the ‘actual and specific reasons’, recalled in paragraph 10 above, why the applicant is regarded as supporting and benefiting from the Lukashenko regime.

37      As regards the applicant’s arguments relating to the credibility of certain items of evidence, it must be stated that those arguments are not concerned with the obligation to state reasons, but seek to cast doubt on whether the statement of reasons is well founded.

38      In that connection, it should be made clear that the obligation to state reasons established by Article 296 TFEU is an essential procedural requirement which must be distinguished from the question whether the reasoning is well founded, which is concerned with the substantive legality of the measure at issue. The reasoning of a decision consists in a formal statement of the grounds on which that decision is based. If those grounds are unsupported or are vitiated by errors, that will vitiate the substantive legality of the decision, but not the statement of reasons in it (see judgment of 6 October 2020, Bank Refah Kargaran v Council, C‑134/19 P, EU:C:2020:793, paragraph 64 and the case-law cited).

39      Consequently, in the light of the foregoing considerations, it must be found that the initial acts are sufficiently reasoned and do not infringe the applicant’s right to effective judicial protection. Therefore, the second plea must be rejected as unfounded.

 The first plea, alleging infringement of the principle of legality

40      The applicant claims that the initial acts infringe the principle of legal certainty, which entails an infringement of the principle of legality. The relevant criteria applied to the applicant contain a number of terms which are not defined either by the initial acts or by the case-law. Therefore, the meaning of those terms, namely ‘[Lukashenko] regime’, ‘state’, ‘Belarusian authorities’, ‘support’ and ‘benefit’, is not clear to the applicant, and it cannot unambiguously understand them or decide how to act in the context of the measures taken against it by the Council.

41      The Council, supported by the Republic of Latvia, disputes that line of argument.

42      It should be recalled that the criteria for including on the lists at issue entities and persons ‘benefiting from or supporting the [Lukashenko] regime’ are established by Article 4(1)(b) of Decision 2012/642. The applicant’s claim is therefore essentially concerned with challenging the wording of that provision of Decision 2012/642.

43      In that connection, the case-law makes it possible to consider that a plea of illegality may be raised implicitly in so far as it is sufficiently clear from the application that the applicant intended to raise such a plea (see, to that effect, judgments of 15 September 2016, Yanukovych v Council, T‑346/14, EU:T:2016:497, paragraph 56; of 15 September 2016, Yanukovych v Council, T‑348/14, EU:T:2016:508, paragraph 57; and of 22 September 2021, Al-Imam v Council, T‑203/20, EU:T:2021:605, paragraph 39 (not published)).

44      It is apparent from an examination of the application, in particular paragraphs 29 and 46 thereof, that the applicant, without formally raising a plea of illegality under Article 277 TFEU, relies on the unlawfulness of the aforementioned criteria, laid down by Article 4(1)(b) of Decision 2012/642, in the context of the claim for annulment of the initial acts.

45      In that connection, it should be recalled that according to settled case-law, the principle of legal certainty – which is one of the general principles of EU law – requires, particularly, that rules of law be clear, precise and predictable in their effects, in particular where they may have negative consequences on individuals and undertakings. A penalty, even of a non-criminal nature, cannot be imposed unless it rests on a clear and unambiguous legal basis. The principle of legal certainty means, in particular, that any EU legislation, in particular when it imposes or permits the imposition of sanctions, must be clear and precise so that the persons concerned may know without ambiguity what rights and obligations flow from it and may take steps accordingly. That requirement of a clear and precise legal basis has also been enshrined in the field of restrictive measures (see, to that effect, judgment of 4 September 2015, NIOC and Others v Council, T‑577/12, not published, EU:T:2015:596, paragraphs 131 and 132 and the case-law cited).

46      In accordance with settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part. The legislative history of a provision of EU law may also reveal elements that are relevant to its interpretation (see judgment of 2 September 2021, CRCAM, C‑337/20, EU:C:2021:671, paragraph 31 and the case-law cited).

47      Furthermore, the Courts of the European Union must, in their judicial review of restrictive measures, allow the Council a broad discretion in establishing the general criteria defining the category of persons that could be made subject to restrictive measures (judgment of 13 September 2018, Vnesheconombank v Council, T‑737/14, not published, EU:T:2018:543, paragraph 94).

48      The existence of vague terms in a provision does not necessarily entail an infringement of fundamental rights, and the fact that a law confers a discretion is not in itself inconsistent with the requirement of foreseeability, provided that the scope of the discretion and the manner of its exercise are indicated with sufficient clarity, having regard to the legitimate aim in question, to give the individual adequate protection against arbitrary interference. Moreover, the requirement of foreseeability which accompanies the principle that penalties must have a proper legal basis – which requires that legislation must clearly define offences and penalties – does not preclude the law from conferring discretion the scope and manner of exercise of which are indicated with sufficient clarity. Those principles of case-law are also applicable with regard to restrictive measures which, although they are not aimed in principle at penalising infringements, but constitute preventive measures, have a considerable impact on the rights and freedoms of the persons concerned (see, to that effect, judgments of 16 July 2014, National Iranian Oil Company v Council, T‑578/12, not published, EU:T:2014:678, paragraphs 116 and 117, and of 4 September 2015, NIOC and Others v Council, T‑577/12, not published, EU:T:2015:596, paragraphs 135 and 136 and the case-law cited).

49      In the light of the foregoing, it should be held, first, that the broad wording of the criteria at issue conferring a discretion on the Council can be compatible with the principles of proportionality and legal certainty (see, to that effect, judgment of 22 September 2016, Tose’e Ta’avon Bank v Council, T‑435/14, not published, EU:T:2016:531, paragraph 39).

50      Second, the meaning and scope of the terms in question must be determined by considering their usual meaning in everyday language, while also taking into account the context in which they occur and the purposes of the rules of which they are part, it being noted that the interpretation of a provision of EU law cannot have the result of depriving the clear and precise wording of that provision of all effectiveness (judgment of 18 October 2023, MAZ-upravljajusaja kompanija holdinga Belavtomaz v Council, T‑532/21, not published, EU:T:2023:656, paragraph 52).

51      It should also be borne in mind that a regulation providing for restrictive measures must be interpreted in the light not only of the decision adopted in the framework of the common foreign and security policy referred to in Article 215(2) TFEU, but also of the historical context in which the provisions were adopted by the European Union, that regulation being one such provision. The same applies to a decision adopted in the area of the common foreign and security policy, which must be interpreted taking into account the context in which it is adopted (judgment of 18 October 2023, MAZ-upravljajusaja kompanija holdinga Belavtomaz v Council, T‑532/21, not published, EU:T:2023:656, paragraph 53).

52      In the light of the case-law cited in paragraph 51 above, it should be observed that, in the context of the restrictive measures taken against Belarus since 2004, the criteria of ‘benefiting’ from the Lukashenko regime and ‘supporting’ that regime were introduced by Article 1(1) and (2) of Council Decision 2012/36/CFSP of 23 January 2012 amending Decision 2010/639/CFSP concerning restrictive measures against Belarus (OJ 2012 L 19, p. 31).

53      Furthermore, it was apparent from recitals 3 and 4 of Decision 2012/36 that, in view of the gravity of the situation in Belarus, additional restrictive measures against that country had to be adopted, including with respect to persons and entities benefiting from or supporting the Lukashenko regime, in particular persons and entities providing financial or material support to the regime.

54      Article 2 of Regulation No 765/2006 was consequently amended by Article 1 of Council Regulation (EU) No 114/2012 of 10 February 2012 amending Regulation No 765/2006 (OJ 2012 L 38, p. 3).

55      On 1 November 2012, Council Decision 2010/639/CFSP of 25 October 2010 concerning restrictive measures against certain officials of Belarus (OJ 2010 L 280, p. 18) was repealed and replaced by Decision 2012/642.

56      As is apparent from recitals 1 to 5 and 8 of Decision 2012/642, the restrictive measures against Belarus were taken and extended as a result of the continued lack of respect in that country for human rights, democracy and the rule of law and were, therefore, directed, in particular, against those responsible for fraud and violations of international electoral standards in connection with certain election or referendum procedures in Belarus, and against those responsible for serious human rights violations and the repression of peaceful demonstrators in the aftermath of those procedures.

57      Furthermore, in that regard, it should be recalled that it is apparent from recital 6 of Decision 2012/642 that, in so far as concerns persons and entities benefiting from or supporting the Lukashenko regime, the objective is to target any person or entity supporting that regime, in particular – but not exclusively – persons and entities providing financial or material support thereto.

58      It follows from the foregoing that, by introducing the act of benefiting from or supporting the Lukashenko regime as criteria justifying the inclusion of a name on the lists at issue, the Council, in view of the serious and persistent nature of the breach of human rights, democracy and the rule of law and the repression of civil society and democratic opposition in Belarus, sought to increase pressure on that regime by broadening the circle of persons and entities subject to EU restrictive measures. In that respect, the Council has provided for the possibility of applying measures freezing funds and economic resources to, inter alia, persons and entities benefiting from or supporting the Lukashenko regime and in particular – but not exclusively – those providing financial support to it (see, to that effect, judgment of 18 October 2023, MAZ-upravljajusaja kompanija holdinga Belavtomaz v Council, T‑532/21, not published, EU:T:2023:656, paragraph 60).

59      Third, the applicant’s claims as to the comprehension of the wording used in the listing criteria – namely, in the present case, of the expressions ‘[Lukashenko] regime’, ‘state’, ‘Belarusian authorities’, ‘support’ and the act of ‘benefiting’ – do not relate to compliance with the principle of legal certainty, but rather to the application of those criteria by the Council, which is the subject of the third plea in law.

60      Thus, the arguments put forward by the applicant do not call into question the lawfulness of the listing criteria established by Article 4(1)(b) of Decision 2012/642, which are sufficiently clear and precise. Consequently, they comply with the principle of legal certainty.

61      As regards the expressions ‘state’ and ‘Belarusian authorities’, which do not appear in the criteria established by Article 4(1)(b) of Decision 2012/642, but which are only mentioned in the initial acts, it should be noted, as the Council does, that they must be understood in their usual sense, especially since the applicant has not put forward any arguments capable of casting doubt on such a conclusion.

62      The first plea must therefore be rejected.

 The third plea, alleging error of assessment

63      The applicant claims that the Council made a manifest error of assessment in considering that it benefits from or supports the Lukashenko regime. It refers to the grounds for its inclusion on the lists at issue and explains why, in its view, the Council failed to demonstrate that it benefits from or supports that regime. The applicant adds that most of the information provided by the Council is either false, outdated or not relevant to it.

64      The Council, supported by the Republic of Latvia, disputes that line of argument.

65      As a preliminary point, it should be pointed out that the third plea in law must be regarded as alleging error of assessment, and not manifest error of assessment. Whilst it is, admittedly, true that the Council has a degree of discretion to determine, on a case-by-case basis, whether the legal criteria on which the restrictive measures at issue are based are satisfied, the fact remains that the Courts of the European Union must ensure the review, in principle the full review, of the lawfulness of all EU acts (see judgment of 6 September 2023, Pumpyanskiy v Council, T‑291/22, not published, EU:T:2023:499, paragraph 40 and the case-law cited).

66      Furthermore, it should be borne in mind that the effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires inter alia that, as part of the review of the lawfulness of the grounds which are the basis of the decision to list or to maintain the name of a person or entity on the lists of persons subject to restrictive measures, the Courts of the European Union are to ensure that that decision, which affects that person or entity 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 the question whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, is substantiated (judgment of 13 September 2023, Synesis v Council, T‑97/21 and T‑215/22, not published, EU:T:2023:531, paragraph 35).

67      That is because it is the task of the competent EU authority to establish, in the event of challenge, that the reasons relied on against the person or entity concerned are well founded, and not the task of that person or entity to adduce evidence of the negative, namely that those reasons are not well founded (see judgment of 13 September 2023, Synesis v Council, T‑97/21 and T‑215/22, not published, EU:T:2023:531, paragraph 37 and the case-law cited).

68      If the competent EU authority provides relevant information or evidence, the Courts of the European Union must then determine whether the facts alleged are made out in the light of that information or evidence and assess the probative value of that information or evidence in the circumstances of the particular case and in the light of any observations submitted in relation to them by, among others, the person or entity concerned (see judgment of 13 September 2023, Synesis v Council, T‑97/21 and T‑215/22, not published, EU:T:2023:531, paragraph 38 and the case-law cited).

69      It should be recalled that the inclusion of the applicant’s name on the lists at issue has been justified by the reasons set out in paragraph 10 above. It is therefore necessary to examine, as a first step, whether the facts put forward in the statement of reasons for the applicant’s listing are established and, as a second step, whether they fall within the scope of Article 4(1)(b) of Decision 2012/642.

70      In the first place, first, the applicant disputes the fact put forward by the Council that it is the exporting arm of Belaruskali, and submits that all the information relating to Belaruskali, which is a separate legal entity, should be disregarded. Moreover, the applicant states that the fact that ‘Belaruskali is one of the largest sources of revenue for the [Lukashenko] regime’ is irrelevant.

71      It is apparent from the information before the Court that, in the market for potassium fertilisers in Belarus, Belaruskali is a public establishment which has a monopoly in that it is the sole producer of potassium fertilisers in Belarus and one of the largest such producers in the world. In 2019, Belaruskali generated a turnover of 2.3 billion United States dollars (USD) (approximately EUR 2.15 billion).

72      Therefore, Belaruskali is one of the largest sources of revenue for the Lukashenko regime, which, moreover, is not disputed by the applicant.

73      The items of evidence on which the Council relied show that Belaruskali holds 48% of the applicant’s shares. ‘Belarusian Railways’, a State association under the supervision of the Ministry of Transport and Communications, owns 42% of the applicant’s shares.

74      It follows therefrom that, although the applicant and Belaruskali are separate entities, the links between them are well established.

75      It is also apparent from the information before the Court that sales to other countries of potassium fertilisers produced by Belaruskali are made through the applicant, which is even referred to as the ‘State trader’s intermediary’ in a video of 3 January 2022 published on the website ‘belsat.eu’. In that regard, the applicant is presented, in an article from the magazine Forbes dated 2 October 2020, as ‘one of the largest suppliers of mineral fertilisers in the world’, while it was described as a ‘State-owned company’ by its former CEO, in Belarus Today on 22 July 2020, and has also been described as one of the ‘Belarusian economy’s flagships’.

76      Moreover, the applicant does not claim to export products other than potassium fertilisers coming from Belaruskali. The applicant’s activities are therefore directly dependent on Belaruskali.

77      Accordingly, the Council did not err in considering that the applicant is an ‘exporting arm’ of Belaruskali.

78      Second, as regards the fact put forward by the Council that ‘supplies from the [applicant] account for 20% of global potash exports’, the applicant maintains that that statement simply describes its activities. However, the mere fact that it has a large share of the global market is not sufficient to demonstrate that it supports or benefits from the regime. Moreover, according to the applicant, its exports have decreased considerably.

79      In that connection, it should be noted that the Council produced an item of evidence in which the applicant’s CEO stated that, in 2019, it exported 21.3% of the world’s potash production.

80      The applicant claims that its export volumes had decreased even before the adoption of the initial acts and no longer accounted for 20% of all global potash exports. However, by merely mentioning the extent to which potash exports had decreased during the first seven months of 2022 compared with the first seven months of 2021 in a number of specific destinations, the applicant has not stated what its share was on the global market for exports of potassium fertilisers on the date of adoption of the initial acts.

81      Third, the applicant disputes the Council’s factual allegation that the State guarantees its monopoly rights for the export of potassium fertilisers. The monopoly enjoyed by the applicant ended in March 2022. The applicant adds that, at present, at least three companies are licensed to export potash.

82      In that regard, it should be recalled that Presidential Decrees No 398 of 2005 and No 399 of 2013, confirming the existence of that monopoly, were produced by the Council in Annexes B.4 and B.5 to the defence. The applicant argues that, in order to justify the inclusion of a person on a sanctions list, the Council is not entitled to rely on documents which it did not take into consideration when adopting the initial acts. However, that argument does not call into question the existence of such a monopoly until March 2022.

83      In addition, it is apparent from the evidence produced by the applicant that, since March 2022, entities wishing to obtain a licence to export potassium fertilisers must initiate a procedure before the Ministry of Anti-monopoly Regulation and Trade. The applicant was one of the first two undertakings, together with Belaruskali, to obtain such a licence. That demonstrates preferential treatment on the part of the Belarusian State with regard to the applicant.

84      Fourth, the applicant disputes the Council’s factual allegation that it received preferential treatment from the Belarusian authorities. The applicant maintains that the revenue obtained by it is not the subject of any preferential treatment and in any case is very low.

85      However, that fact is confirmed by the very existence, until March 2022, of the applicant’s monopoly as regards the export of potassium fertilisers. The applicant exports products to more than 100 countries and, between January and July 2020 alone, exports of potassium fertilisers from Belarus stood at USD 1.4 billion (approximately EUR 1.3 billion).

86      Thus, the facts taken into account by the Council in order to include the applicant on the lists at issue must be regarded as having been established.

87      In the second place, the applicant claims that the factors set out above do not amount to the act of ‘benefiting from’ the regime or to ‘support for the regime’ within the meaning of Article 4(1)(b) of Decision 2012/642.

88      In accordance with the case-law cited in paragraph 50 above, the meaning and scope of the terms in question must be determined by considering their usual meaning in everyday language, while also taking into account, in particular, the purposes of the rules of which they are part and the need to preserve the effectiveness of their clear and precise wording.

89      As a preliminary point, it should be observed that it is apparent both from the clear and precise wording of Article 4(1)(b) of Decision 2012/642, which refers to persons and entities ‘benefiting from or supporting the [Lukashenko] regime’, and from the objective pursued by that provision, which is to increase pressure on that regime, that it is the relationship that certain persons and entities have with that regime which justifies the adoption of restrictive measures, where that relationship takes the form of support, in particular financial support (see, to that effect, judgment of 18 October 2023, MAZ-upravljajusaja kompanija holdinga Belavtomaz v Council, T‑532/21, not published, EU:T:2023:656, paragraph 65).

90      First, as regards ‘support for the regime’, it should be noted that the potash sector, in addition to being highly regulated in Belarus, is one of the strategic sectors of the Belarusian economy which also plays a role in the Lukashenko regime’s foreign policy.

91      As is clear from paragraph 71 above, Belarus is one of the world’s largest producers of potassium fertilisers and, consequently, that business sector generates billions of dollars in gross sales every year. However, such significant sales are achievable mainly as a result of exports.

92      The Council was therefore right to consider that the applicant’s activities, consisting of the export of potassium fertilisers, provide a means for the regime to secure high levels of revenue and international currency.

93      That assertion is borne out by the material in the file submitted by the Council to support the grounds for including the applicant on the lists at issue. The applicant is described as ‘financ[ing] the regime’ in an article published in Farm Journal on 30 July 2013. Furthermore, it is apparent from a report of 26 August 2020 published on the website ‘Fitch ratings’ that potassium exports are an important source of foreign currency revenue for Belarus.

94      According to an article dated 21 March 2022 published on the website ‘politring.com’, President Lukashenko stressed that the main task of the applicant’s new CEO was to find ways to trade, including trade with the European Union, because ‘business is business’ and ‘work on the potash market will be akin to trading in weapons and other special equipment. Everything should be quiet, calm’. The applicant’s new CEO confirmed that approach, stating that, despite the sanctions, he still expected to trade with the European Union and that trade should be as discreet as the arms trade, according to an article published on the website ‘euronews.com’ on 22 March 2022.

95      Furthermore, it should be borne in mind that 90% of the applicant’s shares are held by public entities, namely 48% by Belaruskali, a State-owned undertaking, and 42% by Belarusian Railways. This means that the applicant may pay dividends to those public entities, through which the funds from those dividends are transferred to the State. Since the criterion of support for the Lukashenko regime covers, in particular, persons and entities financially supporting it, those payments constitute a form of financial support (see, to that effect, judgment of 18 October 2023, MAZ-upravljajusaja kompanija holdinga Belavtomaz v Council, T‑532/21, not published, EU:T:2023:656, paragraph 69).

96      The same conclusion must apply to financial support for the regime in the form of financial revenue.

97      Contrary to the applicant’s claims, in order to establish that the applicant supports the Lukashenko regime, the Council did not rely solely on the fact that it complied with its obligation to pay tax, but also took into consideration its links with Belaruskali in the light of its export volumes resulting from those links, which means that the applicant’s support for the regime takes the form of high levels of revenue and international currency as well as dividends (see paragraph 92 above).

98      In that regard, the applicant argues, in essence, that no information relating to Belaruskali should be taken into account in the present case, since Belaruskali is a separate entity from the applicant, with which it has only a purely contractual relationship.

99      However, in this instance, it is clear from paragraph 77 above that the fact taken into account by the Council that the applicant is an ‘exporting arm’ of Belaruskali has been established. Accordingly, the applicant makes it possible for Belaruskali to export potassium fertilisers outside Belarus and thus enables it to increase revenue and foreign currency for the State.

100    Moreover, as the Council rightly points out, since Belaruskali generated a turnover of USD 2.3 billion (approximately EUR 2.15 billion) in 2019, it was bound to pay a significant amount of tax to the Belarusian State, beyond the statutory obligation applicable to all Belarusian taxpayers. Such financial flows would not be possible without the applicant’s activities, which consist of exporting fertilisers produced by Belaruskali outside Belarus.

101    Thus, as the ‘exporting arm’ of Belaruskali, the applicant’s activities are closely linked to Belaruskali, and the Council could legitimately refer to the role played by Belaruskali in the global market for potassium fertilisers in order to establish that the applicant supports the Lukashenko regime.

102    Moreover, although Belaruskali’s funds were frozen, there is a not insignificant danger that that company may exert pressure on its ‘exporting arm’, namely the applicant, in order to circumvent the effect of the measures applying to it, so that the freezing of the funds of those entities is necessary and appropriate in order to ensure the effectiveness of the measures adopted and to ensure that those measures are not circumvented (see, to that effect and by analogy, judgments of 13 March 2012, Melli Bank v Council, C‑380/09 P, EU:C:2012:137, paragraph 58, and of 22 September 2016, NIOC and Others v Council, C‑595/15 P, not published, EU:C:2016:721, paragraph 89).

103    Second, as regards the act of ‘benefiting’ from the Lukashenko regime, it is common ground that, since 2013, the applicant has held the exclusive right – granted by the Belarusian State – to engage in foreign trade in potassium-based mineral or chemical fertilisers. The applicant does not, moreover, dispute that fact and simply asserts that that monopoly ceased to exist before the adoption of the initial acts, that is to say, in March 2022.

104    The mere existence of a monopoly on a market as important, from the perspective of the Belarusian economy as a whole, as the market for potassium fertilisers and for the export thereof is sufficient to conclude, as the Council did, that an undertaking benefits from the regime. Furthermore, as is clear from paragraph 83, even after March 2022, when the applicant’s monopoly in that field expired, the applicant continues to receive preferential treatment from the Belarusian State.

105    It follows from the foregoing that the Council did not err in finding that the position occupied by the applicant in the Belarusian economy and the fact that it represented a source of revenue for the Lukashenko regime were sufficient for it to be considered that the applicant benefited from and supported that regime within the meaning of Article 4(1)(b) of Decision 2012/642.

106    Therefore, the third plea must be rejected.

 The fourth plea, alleging infringement of the principle of proportionality

107    The applicant claims that the initial acts have dramatic consequences that will reverberate not only within the European Union, but also throughout the world. Thus, the restrictive measures imposed on the applicant are clearly disproportionate in view of the extremely negative impact on third countries, on Belarus and on the applicant.

108    The Council, supported by the Republic of Latvia, disputes that line of argument.

109    It should be recalled, first of all, that the principle of proportionality is one of the general principles of EU law and requires that measures implemented through provisions of EU law be appropriate for attaining the legitimate objectives pursued by the legislation at issue and must not go beyond what is necessary to achieve them (see judgment of 13 March 2012, Melli Bank v Council, C‑380/09 P, EU:C:2012:137, paragraph 52 and the case-law cited).

110    The case-law makes clear in that respect that, with regard to judicial review of compliance with the principle of proportionality, the EU legislature must be allowed a broad discretion in areas such as the common foreign and security policy (CFSP), which involve political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Therefore, the legality of a measure adopted in those areas can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue (see judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 146 and the case-law cited).

111    In the present case, it should be noted that the applicant maintains that the initial acts infringe the principle of proportionality in that they have an extremely negative impact not only on its interests, but also on Belarus and on third countries. However, it merely raises that argument, without referring to any specific evidence to support such a position. The applicant has therefore not adduced any factual evidence in support of its claims.

112    Therefore, the fourth plea must be rejected.

113    In the light of all the foregoing considerations, the application for partial annulment of the initial acts must be dismissed.

 The application for partial annulment of the maintaining acts

114    By a statement of modification, the applicant seeks, pursuant to Article 86 of the Rules of Procedure of the General Court, annulment of the maintaining acts in so far as they concern it, reiterating the pleas in law and arguments raised in the application against the initial acts.

115    The Council is of the view that it has already demonstrated in the defence and the rejoinder that the applicant supported and benefited from the Lukashenko regime, and contends that the evidence available to it justifies maintaining the applicant’s name on the lists at issue.

116    In the context of the first plea, alleging infringement of the principle of legality of the maintaining acts, the applicant has failed to submit any arguments in addition to those put forward against the initial acts.

117    Consequently, since the first plea has already been rejected, above, in the context of the examination of the lawfulness of the initial acts (see paragraph 62 above), it must be rejected on the same grounds in so far as it is directed at the maintaining acts.

118    In the context of the second plea, alleging infringement of the right to effective judicial protection and of the obligation to state reasons, the applicant puts forward a fresh argument relating to the obligation of judicial protection, consisting of the obligation to carry out a periodic review of the initial acts. In essence, the applicant claims that, when deciding to maintain the name of an entity on a list, the Council must examine not only the initial reasons for including the entity on the lists at issue, but also the observations and evidence submitted by the applicant.

119    In the context of fourth plea, which must be examined together with the second plea, the applicant claims that, since the Council failed to carry out, in the present case, a proper regular review of its listing and it did not therefore have the benefit of the related procedural safeguards, the conditions laid down by the case-law for assessing the proportionality of measures such as the maintaining acts are not satisfied, with the result that those acts are manifestly disproportionate.

120    It should be borne in mind that restrictive measures are measures of a precautionary and, by definition, provisional nature, the validity of which always depends on whether the factual and legal circumstances which led to their adoption continue to apply and on the need to persist with them in order to achieve their objective. It is thus for the Council, in the course of its periodic review of those restrictive measures, to conduct an updated assessment of the situation and to appraise the impact of such measures, in order to determine whether they have made it possible to attain the objectives pursued by the initial inclusion of the names of the persons and entities concerned on the list at issue or whether the same conclusion in respect of those persons and entities can still be drawn (judgment of 12 February 2020, Amisi Kumba v Council, T‑163/18, EU:T:2020:57, paragraphs 58 and 59). In addition, in order to justify retaining a person’s name on the list, the Council is not prohibited from basing its decision on the same evidence justifying the initial inclusion, re-inclusion or previous retention of the name of the person concerned on the list, provided that (i) the reasons given for inclusion remain unchanged and (ii) the context has not changed in such a way that that evidence is now out of date. That context includes not only the situation of the country in respect of which the system of restrictive measures was established, but also the particular situation of the person concerned (see judgment of 26 October 2022, Ovsyannikov v Council, T‑714/20, not published, EU:T:2022:674, paragraph 78 and the case-law cited).

121    In the present case, the applicant’s claim as set out in its statement of modification concerning infringement of the Council’s obligation to carry out a periodic review is unfounded.

122    First, by letter of 21 December 2022, the Council informed the applicant of its intention to extend the restrictive measures against it and enclosed additional evidence on which the Council relied in the context of the annual review of the measures, and the applicant submitted observations on the extension of the measures and the new evidence by letter of 12 January 2023.

123    Second, by letter of 27 February 2023, the Council replied to the applicant’s observations. That letter contained detailed arguments explaining the reasons why the Council took the view that the applicant’s arguments were not sufficient for it to alter its assessment and that it was appropriate to continue to apply restrictive measures to the applicant.

124    The applicant was therefore able to submit its comments before the maintaining acts were adopted, and its observations were taken into account by the Council. In addition, all of the arguments on the merits of the grounds for maintaining the applicant’s inclusion on the lists at issue refer not to the issue of judicial protection, but to the validity of the initial acts.

125    Moreover, inasmuch as the applicant essentially reiterates the arguments which have already been rejected in the context of the examination of the second and fourth pleas in respect of the initial acts, without submitting fresh arguments concerning the maintaining acts, those arguments must be rejected for the same reasons in the context of the examination of the lawfulness of the maintaining acts.

126    It follows that the second and fourth pleas must be rejected in their entirety.

127    In the context of the third plea, the applicant alleges an error of assessment of the facts and infringement of Article 4(1)(b) of Decision 2012/642.

128    In that regard, it should be noted that, in so far as they concern the applicant, the grounds for the maintaining acts are essentially the same as the grounds for the initial acts, the only difference being the use of the past tense in the first sentence of the second paragraph of the grounds for the listing at issue, relating to the existence of the applicant’s monopoly rights for the export of potassium fertilisers.

129    The applicant submits that the reason for its inclusion on the list at issue – on which it continues to appear following the maintaining acts – cannot be an outdated event, since, pursuant to the Presidential Decrees of March 2022, other entities are now able to export potassium fertilisers.

130    In that regard, first of all, the activity of several entities on a market as important as the potassium fertiliser export market in Belarus does not in itself preclude the applicant from enjoying the regime’s support.

131    Next, even though the potassium fertiliser export market has been formally opened up, as demonstrated by the items of evidence submitted by the Council when the maintaining acts were adopted, the applicant continues to enjoy special privileges within that market, since, in accordance with Presidential Decree No 77 of 5 March 2022, it secured the right to use the word ‘Belarusian’ in its name and in the particulars of documents or promotional materials, and to use a seal, stamps and letterheads depicting the emblem of the Republic of Belarus.

132    It is true that, as is apparent from the items of evidence submitted by the Council when the maintaining acts were adopted, other entities may now apply for a licence to export potassium fertilisers. However, that is not sufficient to conclude that the applicant does not retain its dominant position on the export market for Belarusian potassium fertilisers. Moreover, unlike other entities, the applicant enjoys privileged access since it is not required to go through the procedure for applying for a licence to export potassium fertilisers.

133    Lastly, it is apparent from an article on the website ‘export.by’ of 7 April 2021, submitted in working document 17501/2022 INIT, that, even following the end of the applicant’s monopoly on the export market for Belarusian potassium fertilisers, it continues to receive significant benefits from the Belarusian Government, including consent to enter into a voluntary insurance agreement to cover political and commercial risks during the implementation of a short-term export contract.

134    Therefore, contrary to the applicant’s claims concerning the items of evidence submitted in working document 17501/2022 INIT, it must be held that, although that evidence suggests that the potassium fertiliser export market has opened up, it is not such as to call into question the fact that the applicant continues to enjoy privileges and a leading position.

135    Consequently, the third plea must be rejected as unfounded and, in consequence, the application for partial annulment of the maintaining acts dismissed.

136    In the light of all of the foregoing considerations, the present action must be dismissed in its entirety.

 Costs

137    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 applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those of the Council, in accordance with the form of order sought by the Council.

138    Under Article 138(1) of the Rules of Procedure, the Member States and institutions which have intervened in the proceedings are to bear their own costs. Consequently, the Republic of Latvia must be ordered to bear its own costs.

On those grounds,

THE GENERAL COURT (Fourth Chamber)

hereby:

1.      Dismisses the action;

2.      Orders Belarusian Potash Company AAT to bear its own costs and to pay those incurred by the Council of the European Union;

3.      Orders the Republic of Latvia to bear its own costs.

Delivered in open court in Luxembourg on 18 September 2024.

*      Language of the case: English.

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