Case T‑193/22

OT

v

Council of the European Union

Judgment of the General Court (First Chamber, Extended Composition) of 15 November 2023

(Common foreign and security policy – Restrictive measures taken in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine – Freezing of funds – List of persons, entities and bodies subject to freezing of funds and economic resources – Inclusion and maintenance of the applicant’s name on the lists – Notion of ‘leading businessperson’ – Article 2(1)(g) of Decision 2014/145/CFSP – Plea of illegality – Obligation to state reasons – Error of assessment – Right to be heard – Right to property – Freedom to conduct a business – Proportionality – Misuse of powers)

  1. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures against certain persons and entities in view of the situation in Ukraine – Freezing of funds of persons responsible for, supporting or implementing actions or policies undermining or threatening the territorial integrity, sovereignty or independence of Ukraine, and of natural or legal persons, bodies or organisations associated with them – Scope of the review

    (Art. 275, second para., TFEU; Charter of Fundamental Rights of the European Union; Council Decision (CFSP) 2022/429; Council Regulations 2022/427 and 2022/1529)

    (see paragraph 34)

  2. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures taken having regard to the situation in Ukraine – Scope of the review – Restricted review for general rules – Criteria for adopting restrictive measures

    (Council Regulation No 269/2014, Arts 2 and 3(1))

    (see paragraph 35)

  3. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – No adoption by the Council of restrictive measures directed against businesspersons who are not Russian nationals – No breach of the principle of equal treatment

    (Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, 2022/427 and 2022/1529)

    (see paragraphs 38-40)

  4. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Criteria for adopting restrictive measures – Provision of active material or financial support to the Russian decision-makers responsible for the annexation of Crimea or the destabilisation of eastern Ukraine – Benefit drawn from those decision-makers – Concept – No need to establish a link between the advantages obtained and the annexation of Crimea or the destabilisation of eastern Ukraine – Compliance with the principle of legal certainty requiring clarity, precision and foreseeability of the effects of legal rules

    (Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, Art. 3(1)(d), 2022/427 and 2022/1529)

    (see paragraphs 42-44)

  5. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Judicial review of legality – Sufficiently clear and precise measures – Appropriateness of the restrictive measures – Restrictive measures pursuing a legitimate aim of the common foreign and security policy – Compliance with the principle of legal certainty requiring clarity, precision and foreseeability of the effects of legal rules

    (Art. 21(2)(c) TEU; Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, Art. 3(1)(g), 2022/427 and 2022/1529)

    (see paragraphs 45-51, 56, 58)

  6. Acts of the institutions – Statement of reasons – Obligation – Scope – Restrictive measures taken having regard to the situation in Ukraine – Leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Obligation to identify in the statement of reasons the specific and concrete elements justifying that measure – Decision falling within a context known to the person concerned, enabling him to understand the scope of the measure taken against him – Whether a summary statement of reasons is sufficient

    (Art. 296, second para., TFEU; Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, 2022/427 and 2022/1529)

    (see paragraphs 63-68, 75)

  7. EU law – Principles – Rights of the defence – Right to effective judicial protection – Restrictive measures – Obligation to disclose individual and specific grounds for the decisions adopted – Right to be heard prior to the adoption of such measures – Limitations – Conditions

    (Art. 296, second para., TFEU; Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, 2022/427 and 2022/1529)

    (see paragraphs 79-82)

  8. EU law – Principles – Rights of the defence – Right to effective judicial protection – Restrictive measures taken having regard to the situation in Ukraine – Obligation to disclose individual and specific grounds for the decisions adopted – Scope – Notification to the person concerned through publication in the Official Journal – Whether permissible – Conditions – Council not able to effect notification

    (Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530, Art. 3(2); Council Regulations No 269/2014, Art. 14(2), 2022/427 and 2022/1529)

    (see paragraphs 87-92)

  9. EU law – Principles – Rights of the defence – Right to effective judicial protection – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Obligation to disclose incriminating evidence – Scope – Unlawfulness of the act depending on proving a procedural relevance of the breach of that obligation

    (Charter of Fundamental Rights of the European Union, Art. 41(2)(a); Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, 2022/427 and 2022/1529)

    (see paragraph 93)

  10. EU law – Principles – Rights of the defence – Right to effective judicial protection – Restrictive measures taken having regard to the situation in Ukraine – No right to a prior formal hearing – No breach of the right to be heard

    (Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, 2022/427 and 2022/1529)

    (see paragraphs 97-99)

  11. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds – Rights of the defence – Subsequent decision maintaining the name of the applicant on the list of persons covered by those measures – No new grounds – Obligation for the Council to disclose to the person concerned new evidence taken into account during its periodic review of the restrictive measures – Communication of new evidence to the person concerned in order to seek his observations

    (Council Decision 2014/145/CFSP, as amended by Decision (CFSP) 2022/1530; Council Regulations No 269/2014 and 2022/1529)

    (see paragraphs 101, 102)

  12. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Rights of the defence – Subsequent decision maintaining the name of the applicant on the list of persons covered by those measures – No new grounds – No new incriminating evidence – No communication of incriminating evidence – No breach of the right to be heard

    (Council Decision 2014/145/CFSP, as amended by Decision (CFSP) 2022/1530; Council Regulations No 269/2014 and 2022/1529)

    (see paragraphs 103-106)

  13. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures taken having regard to the situation in Ukraine – Scope of the review – Inclusion of the applicant’s name on the list annexed to the contested decision by virtue of his status as a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation – Publicly available documents – Admissibility

    (Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, 2022/427 and 2022/1529)

    (see paragraphs 115-120)

  14. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures taken having regard to the situation in Ukraine – 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 – No error of assessment

    (Charter of Fundamental Rights of the European Union, Art. 47; Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, 2022/427 and 2022/1529)

    (see paragraphs 122-124, 147, 149-151, 155, 157, 160)

  15. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Criteria for adopting restrictive measures – Leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Concept – No need to establish a link between the advantages obtained and the annexation of Crimea or the destabilisation of eastern Ukraine

    (Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, Art. 3(1)(g), 2022/427 and 2022/1529)

    (see paragraphs 138-145)

  16. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Measures to freeze funds not adopted by the Council in respect of other persons in an identical situation – No breach of the principle of equal treatment

    (Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, Art. 3(1)(g), 2022/427 and 2022/1529)

    (see paragraph 148)

  17. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Scope – Leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Concept – Persons who have committed such acts in the past, notwithstanding the lack of evidence establishing current involvement in such acts – Included

    (Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, Art. 3(1)(g), 2022/427 and 2022/1529)

    (see paragraphs 153, 154)

  18. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Criteria for adopting restrictive measures – Leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Concept of economic sector providing a substantial source of revenue

    (Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, Art. 3(1)(g), 2022/427 and 2022/1529)

    (see paragraph 156)

  19. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures taken having regard to the situation in Ukraine – 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 – Breadth of the discretion of that competent authority – Relevance of evidence produced on the basis of a previous inclusion where there are no amendments to the grounds for inclusion or changes in the applicant’s situation or in the context in Ukraine – No changes in the applicant’s situation

    (Council Decision 2014/145/CFSP, as amended by Decision (CFSP) 2022/1530; Council Regulations No 269/2014 and 2022/1529)

    (see paragraphs 168, 169, 171, 173-177, 183-185)

  20. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of certain persons and entities in view of the situation in Ukraine – Restriction of the right to property and the freedom to conduct a business – No breach of the principle of proportionality

    (Charter of Fundamental Rights of the European Union, Arts 16 and 17; Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429 and (CFSP) 2022/1530; Council Regulations No 269/2014, 2022/427 and 2022/1529)

    (see paragraphs 191, 192, 195-200, 202-205)

Résumé

Following the military aggression perpetrated by the Russian Federation (‘Russia’) against Ukraine on 24 February 2022, the Council of the European Union adopted, on 15 March 2022, Decision (CFSP) 2022/429 ( 1 ) and Regulation 2022/427, ( 2 ) by which the applicant’s name was added to the lists of persons, entities and bodies adopted by the Council since 2014 ( 3 ) on grounds of supporting actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

The applicant, a businessman who is a Russian national, had his funds and banking assets frozen by the Council pursuant to Article 2(1)(d) and (g) of Decision 2014/145 on the ground that, as a major shareholder of a large Russian conglomerate which is one of Russia’s largest taxpayers, he is believed to be one of the most influential persons in Russia with ties to the Russian President, who has not failed to reward that conglomerate for its loyalty to the Russian authorities. Those measures were extended in respect of the applicant by Decision (CFSP) 2022/1530 ( 4 ) and Regulation 2022/1529 ( 5 ) of 14 September 2022 for the same reasons.

The applicant brought an action for annulment of the Council acts before the General Court of the European Union.

The Court, which dismisses the action for annulment brought by the applicant in its entirety, rules inter alia, in the examination of a plea of illegality, on the legality of the listing criteria adopted by the Council, which are based in particular on the applicant’s material and financial support of the Russian Government and the benefit he obtains in return, and on his status as a leading businessperson involved in economic sectors providing a substantial source of revenue to the Russian Government.

Findings of the Court

With regard to the plea of illegality raised by the applicant concerning Article 1(d) and (g) of Regulation 2022/330 ( 6 ) (‘criterion (d)’ and ‘criterion (g)’), which, in his view, breach inter alia the principle of legal certainty and have recourse to criteria which are inappropriate having regard to the objectives of those measures, the Court notes that it is absolutely clear from its wording that criterion (d) applies in a targeted and selective manner to persons who, even if they do not, as such, have any link with the destabilisation of Ukraine, support, materially or financially, or benefit from Russian decision-makers responsible for that destabilisation. In addition, that criterion does not require that the persons or entities concerned benefit personally from the annexation of Crimea or the destabilisation of Ukraine.

In respect of criterion (g), the Court holds that its wording refers sufficiently clearly and precisely to leading businesspersons involved in sectors providing a substantial source of revenue to the Russian Government. It follows that the persons referred to may be considered to be influential on account of their importance in the sector in which they are involved and the importance of that sector for the Russian economy. Furthermore, there is a rational connection between their targeting and the objective of the restrictive measures at issue, which is to increase pressure on Russia and the costs of Russia’s actions to undermine the territorial integrity, sovereignty and independence of Ukraine. The Court also states that those criteria, as interpreted in the light of the legislative and historical content in which they were adopted, are not manifestly inappropriate having regard to the objective of the restrictive measures and the prime importance of maintaining peace. Accordingly, it rejects the complaint alleging breach of the principle of legal certainty, the complaint disputing that those criteria are necessary and appropriate and, therefore, the plea of illegality.

With regard, further, to the manifest error of assessment relied on by the applicant, alleging, first, the purported absence of probative value of the evidence produced in support of criterion (g), the Court recalls that the activity of the EU Courts is governed by the principle of the unfettered assessment of the evidence. The evidence must be assessed according to its credibility, having regard to the reliability of the account it contains and, in particular, to the person from whom the document originates, the circumstances in which it came into being, the person to whom it was addressed and whether, on its face, the document appears to be sound and reliable. In the absence of investigative powers in third countries, the assessment of the EU authorities may, moreover, rely on publicly available sources of information. In that regard, the Court notes that the conflict situation involving Russia and Ukraine can make it particularly different to access the primary source of some information and to collect testimonies from persons who agree to be identified and states that ensuing investigation difficulties can prevent specific evidence and objective information from being provided. In the light of those considerations, the Court concludes that in the case at issue the probative value of the items in the evidence file provided by the Council cannot be discounted.

Second, as regards the second part of the plea in law, the Court points out that that plea in law must be regarded as alleging an error of assessment of the facts having regard to criterion (g) and not a ‘manifestly’ incorrect assessment of the facts, as the EU Courts must ensure the review, in principle the full review, of the lawfulness of all EU acts. It also states that the judicial review ( 7 ) must be effective and is based, in particular, on a verification of the factual allegations in the summary of reasons underpinning the decision at issue. Furthermore, the assessment whether the reasons relied on against the person concerned are well founded must be carried out by examining the evidence and information in its context. The Council thus discharges the burden of proof borne by it if it presents to the EU Courts a set of indicia sufficiently specific, precise and consistent to establish that there is a sufficient link between the person concerned and the regime or the situations being combated.

With regard, in the first place, to the initial inclusion of the applicant on the lists based on criterion (g), the Court notes that that criterion has recourse to the notion of ‘leading businesspersons’ in connection with involvement in ‘economic sectors providing a substantial source of revenue to the [Russian] Government’, without any other condition concerning a link, whether direct or indirect, with that government. In that respect, there is a rational connection between the targeting of that category of persons and the objective of the restrictive measures in question, which is to increase pressure on Russia and the costs of its actions against Ukraine. The Court states that an interpretation to the contrary would run counter to both the wording of criterion (g) and the objective pursued. Having regard to the wording, the persons referred to must be considered to be ‘leading’ on account of their importance in the sector in which they are involved and the importance of that sector for the Russian economy. As for the objective of the restrictive measures at issue, the Court notes that it is not to penalise certain persons or entities because of their links with the situation in Ukraine or with the Russian Government, but to impose economic sanctions on Russia in order to increase pressure on it and the costs of its actions against Ukraine. It concludes that criterion (g) does not require the Council to demonstrate the existence of close links or a relationship of interdependence with the Russian Government nor is it dependent on the imputability to the applicant of the decisions to continue the conflict in Ukraine or a direct or indirect link with the destabilisation of that country.

In this regard, the Court observes that the Council did not commit an error of assessment by considering the applicant to be a leading businessperson, describing him, inter alia, as a ‘major shareholder of the Alfa Group conglomerate’, even though he sold his shares in that company. In view of criterion (g), the notion of ‘leading businesspersons’ refers to facts occurring both in the past and over time with the result that the grounds for listing the applicant may refer to a factual situation which existed before the adoption of the initial acts and which has been modified, without, however, necessarily meaning that the restrictive measures adopted against him on that basis are obsolete.

With regard, in the second place, to the maintenance of the applicant’s name on the lists based on that criterion, the Court points out that it is for the Council, in the course of the periodic review of restrictive measures, to conduct an updated assessment of the situation and to appraise the impact of the previously adopted measures in the light of their objective in respect of the persons concerned. In order to justify such maintenance, the Council may base its decision on the same evidence justifying the initial inclusion, provided that the grounds for inclusion remain unchanged and the context has not changed in such a way that that evidence is now out of date. In the present case, the Court notes that the purported sale of the applicant’s shares in ABH Holdings has not been established by sufficiently convincing evidence. Consequently, the Council was fully entitled to take the view that the applicant’s individual situation had not really changed since his initial inclusion on the lists at issue. The Council did not therefore commit an error of assessment in maintaining the restrictive measures at issue.

Lastly, as regards the breaches of the principle of proportionality, the right to property, the freedom to conduct a business and the right to pursue a profession alleged by the applicant, the Court holds that the disadvantages suffered by the applicant in that regard are not disproportionate in view of the importance of the objective pursued by the contested acts.

Accordingly, the Court dismisses the action in its entirety.

( 1 ) Council Decision (CFSP) 2022/429 of 15 March 2022 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2022 L 87I, p. 44).

( 2 ) Council Implementing Regulation (EU) 2022/427 of 15 March 2022 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2022 L 87I, p. 1).

( 3 ) Council Decision 2014/145/CFSP of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2014 L 78, p. 16).

( 4 ) Council Decision (CFSP) 2022/1530 of 14 September 2022 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2022 L 239, p. 149).

( 5 ) Council Implementing Regulation (EU) 2022/1529 of 14 September 2022 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2022 L 239, p. 1).

( 6 ) Council Regulation (EU) 2022/330 of 25 February 2022 amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2022 L 51, p. 1). Under Article 1 thereof:

‘… 1. Annex I shall include: …

(d) natural or legal persons, entities or bodies supporting, materially or financially, or benefiting from Russian decision-makers responsible for the annexation of Crimea or the destabilisation of Ukraine;

…

(g) leading businesspersons or legal persons, entities or bodies involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine, and natural or legal persons, entities or bodies associated with them.’

( 7 ) Article 47 of the Charter of Fundamental Rights of the European Union.