Case T‑692/15

HTTS Hanseatic Trade Trust & Shipping GmbH

v

Council of the European Union

(Common foreign and security policy — Restrictive measures taken against Iran with a view to preventing nuclear proliferation — Freezing of funds — Obligation to state reasons — Non-contractual liability — Sufficiently serious breach of a rule of law intended to confer rights on individuals)

Summary — Judgment of the General Court (Third Chamber), 13 December 2017

1. Non-contractual liability — Conditions — Unlawfulness — Damage — Causal link — Burden of proof

2. Non-contractual liability — Conditions — Unlawfulness — Assessment of the legality of the institutions’ conduct — fund-freezing measures — Claim for damages by an economic operator subject to an individual restrictive measure — Criteria

   (Art. 21 TEU; Art. 215(2) TFEU)

3. Non-contractual liability — Conditions — Sufficiently serious breach of a rule of law intended to confer rights on individuals — Rules of evidence — Annulment of one or more acts of the Council at the origin of the harm allegedly suffered by the applicant, including where annulment results from a judgment of the General Court delivered before the action for damages has been brought — Lack of irrefutable evidence

4. Non-contractual liability — Conditions — Rules of evidence — Possibility for an institution to rely on all relevant facts and matters occurring before the action for damages was brought against it — Facts and matters adduced in the context of an action for damages by the institution which adopted a freezing-funds measure are not nugatory

   (Art. 24(1)(1) TEU; Art. 215(2) TFEU)

5. Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies identified by the Council as being engaged in nuclear proliferation — Obligation to extend that measure to entities owned or controlled by such an entity — Whether an entity is owned or controlled — Assessment on a case-by-case basis by the Council — Criteria

   (Council Regulations No 668/2010 and No 961/2010)

6. EU law — Principles — Rights of defence — Right to effective judicial protection — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Obligation to disclose individual and specific grounds for the decisions adopted — Scope

7. Non-contractual liability — Conditions — Unlawfulness — Insufficient reasoning in a legislative act — Not included

   (Art. 340(2), TFEU)

1.  See the text of the decision.

   (see paras 29-31)

2.  An individual restrictive measure capable of applying to a non-State entity, such as a measure freezing funds, is not in itself an autonomous act of the Council in the nature of a penal or administrative sanction adopted against that entity, but a measure which is necessary, within the meaning of Article 215(2) TFEU, for implementing the common foreign and security policy, intended to enable the European Union to achieve, step by step, the practical outcome which it is seeking in the context of international relations, here to bring an end to the nuclear proliferation activities of the Islamic Republic of Iran. Furthermore, the wider objective of maintaining peace and international security, in accordance with the objectives of the Union’s external action stated in Article 21 TEU, is such as to justify negative consequences for economic operators, even significant negative consequences, arising from decisions implementing acts adopted by the Union with a view to achieving that fundamental objective.

   Thus, in assessing the conduct of the institution concerned, the Court, hearing an action for damages brought by an economic operator, is also required, having regard in particular to Article 215(2) TFEU, to take account of that fundamental objective of Union foreign policy, except where the operator is able to establish that the Council failed to comply with its mandatory obligations in a flagrant or inexcusable manner, or that it infringed, again in a flagrant or inexcusable manner, a fundamental right recognised by the Union.

   (see paras 44-46)

3.  The fact that one or more of the acts of the Council giving rise to the losses claimed by the applicant may have been annulled, even by a judgment of the General Court delivered before the action for damages had been brought, is not irrefutable evidence of a sufficiently serious breach on the part of that institution, giving rise ipso jure to liability on the part of the Union.

   (see para. 48)

4.  Unlike an action for annulment, an action based on non-contractual liability may be brought up to five years after the occurrence of the event giving rise to the damage in question. Consequently, the institution in respect of which non-contractual liability is said to have arisen is, in principle, entitled to rely, by way of defence, on all relevant facts and matters occurring before the action for damages was, within that five-year period, brought against it, just as the applicant is entitled to rely on evidence post-dating the occurrence of damage in order to prove the scope and extent of such damage.

   As to the fact that it is possible for the institution to rely, by way of defence, on all relevant facts and matters occurring before the action for damages was brought against it, it should be observed that this answers the need for the competent court to determine, on an inter partes basis, the relevance and importance of the facts alleged by the parties to the case so as to make a ruling as to whether or not extra-contractual liability has arisen on the part of the Union. The justification for this possibility is particularly clear in an area of European Union activity such as the common foreign and security policy (CFSP), which, by reason of its objectives and content, is subject to specific rules and procedures which are laid down by the Treaties (see the second subparagraph of Article 24(1) TEU) and are intended inter alia to take account, as necessary, of the development of the factual and legal situation to which the Union’s international action relates. To that extent, to render effects brought about by the institution concerned nugatory, in the context of an action for damages, where that institution, pursuant to a decision adopted in accordance with Title V, Chapter 2 TEU, has proceeded, on the basis of Article 215(2) TFEU, to adopt the freezing of funds measure in question, would be to create a serious hindrance to the effective exercise of the functions which the treaties assign, in matters of the CFSP, to the Union institutions, by providing for the necessary restrictive measures to be adopted in aid of the implementation of the CFSP.

   (see paras 49-51)

5.  In assessing the legality of a restrictive measure, what is contemplated by the concept of a company ‘owned or controlled by another entity’ is a situation in which the natural or legal person involved in the nuclear proliferation activity of the State in question is able to influence the commercial decisions of another undertaking with which it has a commercial relationship, even in the absence of any legal tie between the two economic entities, or any link in terms of ownership or equity participation. In that respect, the Council must assess whether an entity is ‘owned or controlled’ on a case-by-case basis, by reference, inter alia, to the degree to which the entity concerned is owned or controlled, and that the Council has a certain margin of appreciation in this regard.

   (see paras 56, 57)

6.  See the text of the decision.

   (see paras 75-78)

7.  See the text of the decision.

   (see para. 88)