Case T‑426/21

Nizar Assaad

v

Council of the European Union

Judgment of the General Court (Fourth Chamber, Extended Composition), 8 March 2023

(Common foreign and security policy – Restrictive measures adopted against Syria – Freezing of funds – Errors of assessment – Retroactivity – Legitimate expectations – Legal certainty – Res judicata)

1. Judicial proceedings – Production of evidence – Time limit – Late submission of evidence and offers of evidence – Conditions – Evidence produced in the course of the proceedings in response to arguments put forward by the defendant – Admissibility

   (Rules of Procedure of the General Court, Art. 85(1))

   (see paragraphs 61, 67)

2. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures against Syria – Scope of the review – Proof that the measure is well founded – Obligation on the competent EU authority to establish, in the event of challenge, that the reasons relied on against the persons or entities concerned are well founded – Obligation to take account of updated evidence

   (Charter of Fundamental Rights of the European Union, Art. 47; Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849; Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840)

   (see paragraphs 70-76, 88, 89)

3. Common foreign and security policy – Specific restrictive measures against certain persons and bodies in view of the situation in Syria – Decision 2013/255/CFSP – Assumption that influential businesspersons engaged in activities in Syria and members of the Assad and Makhlouf families support the Syrian regime – Whether permissible – Conditions

   (Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849, Arts 27(2)(a) and 28(2)(a); Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840, Art. 15(1a)(a))

   (see paragraphs 78, 79)

4. Common foreign and security policy – Specific restrictive measures against certain persons and bodies in view of the situation in Syria – Decision 2013/255/CFSP and Regulation No 36/2012 – Criteria for adopting restrictive measures – Leading businesspersons operating in Syria – Association with the Syrian regime – Definition

   (Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849, Arts 27(1) and (2)(a) and 28(1) and (2)(a); Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840, Art. 15(1a)(a) and (1b))

   (see paragraphs 79, 80)

5. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures against Syria – Scope of the review – Inclusion of the applicant on the list annexed to the contested decision on account of his status as a leading businessperson operating in Syria, his association with the Syrian regime and his ties to a person or entity subject to the restrictive measures – Documents available to the public – Probative value – Principle of the unfettered assessment of the evidence

   (Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849; Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840)

   (see paragraphs 81, 84-86, 90)

6. Common foreign and security policy – Specific restrictive measures against certain persons and bodies in view of the situation in Syria – Decision 2013/255/CFSP and Regulation No 36/2012 – Presumption of support for the Syrian regime in the case of leading businesspersons operating in Syria – Whether permissible – Conditions – Rebuttable presumption – Evidence to the contrary

   (Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849, Arts 27(2)(a) and 28(2)(a); Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840, Art. 15(1a)(a))

   (see paragraphs 93, 94, 97, 102, 105, 108-118, 120, 124, 126, 127, 173)

7. Common foreign and security policy – Specific restrictive measures against certain persons and bodies in view of the situation in Syria – Decision 2013/255/CFSP and Regulation No 36/2012 – Assumption that persons and entities associated with members of the Assad and Makhlouf families support the Syrian regime – Whether permissible – Conditions – Rebuttable presumption – Evidence to the contrary

   (Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849, Arts 27(2) and (3) and 28(2) and (3); Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840, Art. 15(1a) and (1b))

   (see paragraphs 131-132, 148, 157-160, 173)

8. Common foreign and security policy – Specific restrictive measures against certain persons and bodies in view of the situation in Syria – Decision 2013/255/CFSP and Regulation No 36/2012 – Assumption that members of the Assad and Makhlouf families support the Syrian regime – Whether permissible – Conditions – Rebuttable presumption – Evidence to the contrary

   (Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849, Arts 27(2)(b) and (3) and 28(2)(b) and (3); Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840, Art. 15(1a)(a))

   (see paragraphs 136, 137, 144, 146, 147, 149, 173)

9. Common foreign and security policy – Specific restrictive measures against certain persons and bodies in view of the situation in Syria – Decision 2013/255/CFSP and Regulation No 36/2012 – Criteria for adopting restrictive measures – Support provided to and benefit derived from the Syrian regime – Definition – Autonomous legal criterion – Inclusion on the lists based on a specific, precise and consistent body of evidence – Absence

   (Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849, Arts 27(1) and 28(1); Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840, Art. 15(1)(a))

   (see paragraphs 161, 166-170, 172, 173)

10. Acts of the institutions – Temporal application – Retroactive effect of a substantive rule – Conditions – Examination of the content of the act – Rules on restrictive measures identifying individuals – Subsequent amendment of information identifying a listed person – Retroactive effect of the adopted acts

    (Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849; Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840)

    (see paragraphs 189-194, 198, 200, 201, 204, 205, 207-211, 244)

11. Acts of the institutions – Temporal application – Non-retroactivity – Exceptions – Conditions – Accomplishment of an objective in the general interest and respect for legitimate expectations – Rules on restrictive measures identifying individuals – Subsequent amendment of information identifying a listed person – Infringement of the principles of legal certainty and the protection of legitimate expectations

    (Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836, (CFSP) 2021/751 and (CFSP) 2022/849; Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840)

    (see paragraphs 212, 216-219, 225, 226-228, 235, 238, 240, 241, 245-249, 254)

12. Judicial proceedings – Res judicata – Scope – Order of the General Court declaring the inadmissibility of an action seeking annulment of acts concerning restrictive measures in the absence of any interest, on the part of the applicant, in bringing proceedings – Subsequent and retroactive amendment of information identifying a listed person – Fresh application seeking annulment of subsequent acts adopted against the applicant – Infringement of the principle of res judicata

    (Charter of Fundamental Rights of the European Union, Art. 47; Council Decision 2013/255/CFSP, as amended by Decisions (CFSP) 2015/1836 and (CFSP), 2021/751 and (CFSP) 2022/849; Council Regulation No 36/2012, as amended by Regulations 2015/1828, 2021/743 and 2022/840)

    (see paragraphs 257, 259-264, 268, 270, 271, 273)

13. Action for annulment – Judgment annulling a measure – Effects – Limitation by the Court – Restrictive measures against certain persons and entities in view of the situation in Syria – Annulment at two different times of two acts containing identical restrictive measures – Risk of legal certainty being seriously affected – Maintenance of the effects of the first of those acts until the taking effect of annulment of the second

    (Arts 264, second para., and 280 TFEU; Statute of the Court of Justice, Art. 60; Council Decision (CFSP) 2022/849; Council Regulation 2022/840)

    (see paragraphs 276-280)

Résumé

The applicant, Mr Nizar Assaad, is a businessperson who holds Syrian, Lebanese and Canadian nationalities and, according to the Council of the European Union, has close ties to the Syrian regime.

His name was included in 2011 on the lists of persons and entities subject to restrictive measures against the Syrian Arab Republic by the Council, ( 1 ) then, in the absence of precise identification, after correction and addition of supplementary identifying information, ( 2 ) the Council had considered that those acts did not designate him. He was again included on the lists in 2020, ( 3 ) then retained on them in 2021 and 2022, ( 4 ) on the grounds, according to the Council, that he was a leading businessperson with close ties to the regime, that he was associated with the Assad and Makhlouf families and that he was, as the founder and head of the company Lead Contracting & Trading Ltd, one of the biggest investors in the oil sector.

Those grounds were based on, first, the ‘leading businesspersons operating in Syria’ criterion, ( 5 ) second, the ‘association with the Syrian regime’ criterion, ( 6 ) and, last, the ‘association with persons or entities subject to restrictive measures’ criterion, on account, according to the Council, of the applicant’s ties to the Assad and Makhlouf families. ( 7 )

The applicant brought an action for annulment against the acts adopted in 2021 and 2022 in so far as they concern him. The General Court upholds that action by dealing, inter alia and for the first time, with the question whether the Council may lawfully attach retroactive effect to acts adopted in the context of a restrictive measures regime. The Court also addresses the question of the force of res judicata of an earlier judicial decision with regard to the question whether the Council and the Court are bound by the finding made by that decision as to the identity of a listed person.

Findings of the Court

As regards, in the first place, the plea alleging errors of assessment, the Court first of all examines the criterion of the status of a leading businessperson operating in Syria in the light of the grounds for listing relied on by the Council against the applicant. Although it is apparent from the evidence submitted by the Council that the applicant was indeed an investor in the Syrian oil sector, first, the applicant has demonstrated that he no longer has any interests in the company Lead Syria, ( 8 ) which was in liquidation when the contested acts were adopted, and, second, the Council has failed to forward any argument to call into question the reliability of the evidence adduced by the applicant or to challenge the latter’s resignation from Lead UAE, ( 9 ) with the result that the applicant may be regarded as no longer being involved in that company. The same applies to the applicant’s lack of involvement in several other Syrian entities and his participation in various chambers of commerce. The Council has therefore failed to substantiate to the requisite legal standard that the applicant had commercial interests in Syria or was a member of certain trade-related bodies. The Court concludes that the Council has failed to demonstrate, when the contested acts were adopted, that the applicant was a leading businessperson operating in Syria in accordance with the criterion laid down in Decision 2013/255.

Next, as regards the applicant’s ties to members of the Assad family, the Court notes that the applicant is not a member of that family and that the ties attributed to him by the Council are of a professional nature only, on account of activities in the oil sector in particular. However, the examination of the evidence submitted by the Council in that regard leads the Court to conclude that the Council has failed to adduce a sufficiently concrete, precise and consistent body of evidence to support that finding. It reaches a similar conclusion concerning the absence of ties, on the applicant’s part, with the Makhlouf family.

Lastly, as regards the applicant’s alleged association with the Syrian regime as a result of his support for that regime or the benefit he derives from the policies pursued by that regime, the Court finds, first of all, that it is not on account of his business activities in Syria or his ties to members of the Makhlouf and Assad families, or even on account of other responsibilities or activities of Lead Syria, that the applicant can be associated with the Syrian regime. On the contrary, he distanced himself from that regime, specifically in 2012. The Council has therefore failed to demonstrate to the requisite legal standard that the applicant is associated with the Syrian regime and, accordingly, the Court upholds the applicant’s first plea in law concerning the lack of merit for the reasons for listing relied on by the Council against the applicant.

As regards, in the second place, the reference, made by the Council in the contested acts, to the date of the applicant’s initial listing on 23 August 2011, the Court examines, first, whether those acts have, by their content, retroactive effect. That is true of the acts adopted in 2021, which are a continuation of previous acts which they amend and which were adopted after the Council admitted having made an error as to the identity of the person concerned. The amendment, in those acts, of the date of the applicant’s initial listing does have a retroactive effect on his legal situation. That is the case, first, as to his reputation and integrity and, second, with regard to his legal situation in France in the light of a ministerial decision of 12 February 2020, based on the 2019 acts, which had frozen his funds in that Member State.

The Court then examines the possible infringement of the principles of legal certainty and of the protection of legitimate expectations by reason of that retroactivity. As regards the possible existence of a public interest, it points out that legal certainty can be guaranteed, and the effectiveness of the restrictive measures ensured, only if the persons and entities concerned are clearly identified by the Council in the acts at issue. It is therefore legitimate and necessary for the Council to be able to correct errors made as to the identity of a person, in order to ensure that the objectives of the restrictive measures are attained by enabling third parties to know who the subject of those measures is and the person concerned to bring, where appropriate, an action against those measures. As to the existence of a legitimate expectation on the part of the applicant, based on the situation prior to the correction of that error of identification, the Court recalls that it is not necessary for the applicant to have been the addressee of acts constituting subjective rights in order for him to be able to rely on the protection of his legitimate expectations, just as it is not for him to show that he received precise, unconditional and consistent assurances such as to establish the existence of a legitimate expectation on his part. In the light of the circumstances of the present case, namely the exchanges of correspondence between the Council and the applicant’s representatives, the corrigenda adopted by the Council on account of those exchanges ( 10 ) and the position taken by the Council in an earlier case, Assaad v Council, ( 11 ) the Court finds that the Council affirmed to the applicant, on several occasions, that he was not the person initially referred to in the acts adopted in 2011. In that regard, the Court disputes the Council’s argument that any conclusion as to the identity of a person subject to restrictive measures is merely declaratory and notes that the letters in question, together with the various acts adopted by the Council, gave rise to the applicant’s expectation that he was not the person concerned. The Court concludes that the Council failed to respect the applicant’s legitimate expectations and the principle of legal certainty by adopting measures against him with retroactive effect.

As regards, in the third and last place, the plea alleging infringement of the principle of res judicata, in the present case, of the order handed down in the earlier case of Assaad v Council, which had found that the applicant’s action was inadmissible since, not being the person referred to in the 2011 lists, he had no interest in bringing proceedings, the Court finds that, by stating in the contested acts that the applicant was the subject of the 2011 measures, the Council has caused a decision and measures which are contrary, or even incompatible in terms of their effects, to coexist in the EU legal order and has, consequently, infringed the principle of res judicata of the aforementioned order in relation to the 2011 acts. However, since the principle of res judicata cannot be extended so that an order settles questions relating to another set of legal acts, adopted on the basis of other evidence and relating to different basic acts, the Court concludes that the applicant has no basis for maintaining that the contested measures were adopted, from 2020 onwards, in breach of the principle of res judicata.

In the light of the foregoing, the Court annuls the contested acts in so far as they concern the applicant, while maintaining the effects of Decision 2022/849 as regards the applicant until the date of expiry of the period for bringing an appeal or, if an appeal is brought within that period, until any dismissal of that appeal.

( 1 ) Council Implementing Decision 2011/515/CFSP of 23 August 2011 implementing Decision 2011/273/CFSP concerning restrictive measures against Syria (OJ 2011 L 218, p. 20) and Council Implementing Regulation (EU) No 843/2011 of 23 August 2011 implementing Regulation (EU) No 442/2011 concerning restrictive measures in view of the situation in Syria (OJ 2011 L 218, p. 1).

( 2 ) Council Decision 2011/735/CFSP of 14 November 2011 amending Decision 2011/273/CFSP (OJ 2011 L 296, p. 53), and Council Regulation (EU) No 1150/2011 of 14 November 2011 amending Regulation (EU) No 442/2011 (OJ 2011 L 296, p. 1).

( 3 ) Council Decision (CFSP) 2020/719 of 28 May 2020 amending Decision 2013/255/CFSP concerning restrictive measures against Syria (OJ 2020 L 168, p. 66) and Council Implementing Regulation (EU) 2020/716 of 28 May 2020 implementing Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria (OJ 2020 L 168, p. 1).

( 4 ) Council Implementing Decision (CFSP) 2021/751 of 6 May 2021 implementing Decision 2013/255/CFSP concerning restrictive measures against Syria (OJ 2021 L 160, p. 115), and Council Implementing Regulation (EU) 2021/743 of 6 May 2021 implementing Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria (OJ 2021 L 160, p. 1); Council Decision (CFSP) 2022/849 of 30 May 2022 amending Decision 2013/255/CFSP (OJ 2022 L 148, p. 52), and Council Implementing Regulation (EU) 2022/840 of 30 May 2022 implementing Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria (OJ 2022 L 148, p. 8) (‘the contested acts’).

( 5 ) See Article 27(2)(a) and Article 28(2)(a) of Decision 2013/255/CFSP, as amended by Decision (CFSP) 2015/1836, and Article 15(1a)(a) of Regulation (EU) No 36/2012, as amended by Regulation (EU) 2015/1828.

( 6 ) See Article 27(1) and Article 28(1) of Decision 2013/255/CFSP, as amended by Decision (CFSP) 2015/1836, and Article 15(1)(a) of Regulation (EU) No 36/2012, as amended by Regulation (EU) 2015/1828.

( 7 ) See the last sentence of Article 27(2) and the last sentence of Article 28(2) of Decision 2013/255/CFSP, as amended by Decision (CFSP) 2015/1836, as well as the last sentence of Article 15(1a) of Regulation (EU) No 36/2012, as amended by Regulation 2015/1828.

( 8 ) Lead Contracting and Trade Company.

( 9 ) Lead Contracting and Trading Limited.

( 10 ) Decision 2011/735/CFSP amending Decision 2011/273/CFSP (OJ 2011 L 296, p. 53) and Council Regulation (EU) No 1150/2011 of 14 November 2011 amending Regulation No 442/2011 (OJ 2011 L 296, p. 1), and corrigenda to Council Implementing Decision 2013/185/CFSP of 22 April 2013 implementing Council Decision 2012/739/CFSP concerning restrictive measures against Syria, and to Council Implementing Regulation (EU) No 363/2013 of 22 April 2013 implementing Regulation No 36/2012 (OJ 2013 L 123, p. 28).

( 11 ) Order of 24 May 2012, Assaad v Council (T‑550/11, not published, EU:T:2012:266).