CELEX: 62015TJ0533
Common foreign and security policy
Restrictive measures against North Korea with the aim of preventing nuclear proliferation
List of persons and entities to which the freezing of funds and economic resources applies
Inclusion of the applicants’ names
Proof that inclusion on the list is well founded
Obligation to state reasons

Background to the dispute
The applicant in Case T‑264/16, Korea National Insurance Corporation (‘KNIC’), is a North Korean undertaking which operates in the field of insurance.
The applicants in Case T‑533/15, Mr Kim Il-Su and the other applicants whose names appear in the annex, had links with KNIC or with one of its branch offices.
Restrictive measures adopted against the Democratic People’s Republic of Korea
The present cases have been brought in connection with the restrictive measures introduced in order to exert pressure on the Democratic People’s Republic of Korea (DPRK) to end nuclear proliferation activities.
Those activities were described as a threat to international peace and security by the United Nations Security Council (‘UNSC’) in a series of resolutions, in particular Resolutions 1695 (2006), 1718 (2006), 1874 (2009), 2087 (2013) and 2094 (2013).
On 20 November 2006, the Council of the European Union adopted, on the basis of Article 15 TEU, Common Position 2006/795/CFSP concerning restrictive measures against the Democratic People’s Republic of Korea (
OJ 2006 L 322, p. 32
) in order, in particular, to implement UNSC Resolutions 1695 (2006) and 1718 (2006). Articles 1 and 2 thereof prohibited, in essence, the direct or indirect supply, sale or transfer of certain technology and luxury goods to North Korea by nationals of Member States or through or from the territories of Member States. Under Article 3, the Member States were required to take the necessary measures to prevent the entry into, or transit through, their territories of the persons, together with their family members, designated by the Sanctions Committee or by the UNSC, as listed in the Annex to Common Position 2006/795, as being responsible for, including through supporting or promoting, the Democratic People’s Republic of Korea’s policies in relation to its nuclear-related, ballistic missile-related and other weapons of mass destruction-related programmes. Last, Article 4 provided for the freezing of all funds and economic resources belonging to, owned, held or controlled, directly or indirectly, by the persons and entities designated by the Sanctions Committee or by the UNSC as being engaged in or providing support for, including through illicit means, the Democratic People’s Republic of Korea’s nuclear-related, other weapons of mass destruction-related and ballistic missiles-related programmes, or by persons or entities acting on their behalf or at their direction.
Since action by the European Community was necessary in order to implement certain measures provided for by Common Position 2006/795, on 27 March 2007 the Council, pursuant to Articles 60 and 301 EC, adopted Regulation (EC) No 329/2007 concerning restrictive measures against the Democratic People’s Republic of Korea (
OJ 2007 L 88, p. 1
), the content of which was, in essence, identical to that of Common Position 2006/795.
On 27 July 2009, the Council adopted, on the basis of Article 15 TEU, Common Position 2009/573/CFSP amending Common Position 2006/795 (
OJ 2009 L 197, p. 111
), which sought to implement UNSC Resolution 1874 (2009) and, moreover, provided for an expansion of the scope of application of the measures referred to in paragraph 5 above. In particular, it is evident from recitals 13 and 14 of that text that restrictions on admission were required to be applied in respect of persons designated by the European Union and that a freezing of funds or economic resources was required to be applied in respect of the persons and entities designated by the Union. Articles 3 and 4 of Common Position 2006/795 were amended accordingly. In addition, it is apparent on reading those provisions in conjunction with Article 1(8) of Common Position 2009/573 that the list of persons referred to in Annex I thereto was established by the Sanctions Committee or by the UNSC, while the list of persons referred to in Annexes II and III thereto was established by the Council. On 22 December 2009, the Council adopted Decision 2009/1002/CFSP amending Common Position 2006/795 (
OJ 2009 L 346, p. 47
), on the basis of Article 29 TEU. That decision amended, inter alia, Annexes II and III to Common Position 2006/795.
Consequently, on 22 December 2009, the Council adopted, on the basis of Article 215(2) TFEU, Regulation (EU) No 1283/2009 amending Regulation No 329/2007 (
OJ 2009 L 346, p. 1
).
On 22 December 2010, the Council adopted, on the basis of Article 29 TEU, Decision 2010/800/CFSP concerning restrictive measures against the Democratic People’s Republic of Korea and repealing Common Position 2006/795 (
OJ 2010 L 341, p. 32
). While the provisions of that text were, in essence, identical to those of Common Position 2006/795, they also sought to include in the lists annexed to it the names of additional persons and entities identified by the Council as having to be made subject to restrictive measures, and to amend the procedure for amending Annexes I and II to that decision so that the designated persons and entities would be informed of the grounds for their listing and given the opportunity to submit observations and, if observations were submitted or substantial new evidence presented, the Council could review its decision in the light of those observations and inform the person or entity concerned accordingly.
Accordingly, on the same date, the European Commission adopted Regulation (EU) No 1251/2010 amending Regulation No 329/2007 (
OJ 2010 L 341, p. 15
).
Restrictive measures adopted against the applicants
On 22 April 2013, the Council adopted, on the basis of Article 29 TEU, Decision 2013/183/CFSP concerning restrictive measures against the Democratic People’s Republic of Korea and repealing Decision 2010/800/CFSP (
OJ 2013 L 111, p. 52
). That decision sought in particular to take account of the provisions of UNSC Resolution 2094 (2013).
Article 15(1)(b)(ii) of Decision 2013/183 provided for the freezing of all funds and economic resources belonging to, owned, held or controlled, directly or indirectly, by the persons and entities that ‘provide financial services or the transfer to, through, or from the territory of Member States, or involving nationals of Member States or entities organised under their laws, or persons or financial institutions in their territory, of any financial or other assets or resources that could contribute to the DPRK’s nuclear-related, ballistic missile-related or other weapons of mass destruction-related programmes, or persons or entities acting on their behalf or at their direction, or entities owned or controlled by them’ (‘the listing criteria’).
It is apparent from a combined reading of Articles 15 and 19 to 21 of Decision 2013/183 that the list of persons designated in Annex I to that decision was established by the Sanctions Committee or by the UNSC, while the list of persons designated in Annex II to that decision was established by the Council.
Consequently, on 22 July 2013 the Council adopted, on the basis of Article 215 TFEU, Regulation (EU) No 696/2013 amending Regulation No 329/2007 (
OJ 2013 L 198, p. 22
). Article 6(2)(b) of Regulation No 329/2007, as amended by Regulation No 696/2013, provided for all funds and economic resources belonging to, owned, held or controlled by the persons, entities and bodies listed in Annex V to be frozen. It further stated that Annex V included persons, entities and bodies not listed in Annex IV and who, in accordance with point (b) of Article 15(1) of Decision 2013/183, had been identified by the Council as ‘providing financial services or the transfer to, through or from the territory of the Union, or involving nationals of Member States or entities organised under their laws, or persons or financial institutions in the territory of the Union, of any financial or other assets or resources that could contribute to North Korea’s nuclear-related, other weapons of mass destruction-related or ballistic missile-related programmes, or persons, entities or bodies acting on their behalf or at their direction, or persons, entities or bodies owned or controlled by them’.
On 2 July 2015, the Council, on the basis of Article 29 TEU, adopted Decision (CFSP) 2015/1066 amending Decision 2013/183 (
OJ 2015 L 174, p. 25
), and, on the same date, the Commission in turn adopted Implementing Regulation (EU) 2015/1062 amending Regulation No 329/2007 (
OJ 2015 L 174, p. 16
) (together ‘the first set of contested measures’).
By Decision 2015/1066, the names of the applicants in Case T‑533/15 were entered on the list, established by the Council, of persons subject to restrictive measures at point II A of Annex II to Decision 2013/183. That listing was based on the following grounds (‘the first set of grounds relating to the applicants in Case T‑533/15’):
‘Kim Il-Su — Rahlstedter Straße 83 a, 22149 Hamburg — Date of birth: 2.9.1965 — Place of birth: Pyongyang, DPRK — Authorised plenipotentiary representative of the EU-designated KNIC GmbH, acting on behalf of KNIC or at its direction.
Kang Song-Nam — Rahlstedter Straße 83 a, 22149 Hamburg — Date of birth: 5.7.1972 — Place of birth: Pyongyang, DPRK — Authorised plenipotentiary representative of the EU-designated KNIC GmbH, acting on behalf of KNIC or at its direction.
Choe Chun-Sik — Rahlstedter Straße 83 a, 22149 Hamburg — Date of birth: 23.12.1963 — Place of birth: Pyongyang, DPRK — Passport No 745132109 valid until 12.2.2020 — Authorised plenipotentiary representative of the EU-designated KNIC GmbH, acting on behalf of KNIC or at its direction.
Sin Kyu-Nam — Date of birth: 12.9.1972 — Place of birth: Pyongyang, DPRK — Passport No PO472132950 — Head of department of KNIC headquarters in Pyongyang and former authorised plenipotentiary representative of KNIC GmbH Hamburg. Acting on behalf of KNIC or at its direction.
Pak Chun-San — Date of birth: 18.12.1953 — Place of birth: Phyongan, DPRK — Passport No PS472220097 — Head of department of KNIC headquarters in Pyongyang and former authorised plenipotentiary representative of KNIC GmbH Hamburg. Acting on behalf of KNIC or at its direction.
So Tong Myong — Date of birth: 10.9.1956 — Managing Director of KNIC GmbH Hamburg, acting on behalf of KNIC or at its direction’.
In order to reflect the amendments made to Decision 2013/183, the names of the applicants in Case T‑533/15 were also listed at point C of Annex V to Regulation No 329/2007, as amended by Implementing Regulation 2015/1062, on grounds essentially identical to those set out in paragraph 16 above.
On 31 March 2016 the Council adopted, on the basis of Article 29 TEU, Decision (CFSP) 2016/475 amending Decision 2013/183 (
OJ 2016 L 85, p. 34
), and, on 27 April 2016 the Commission in turn adopted Implementing Regulation (EU) 2016/659 amending Regulation No 329/2007 (
OJ 2016 L 114, p. 9
) (together ‘the second set of contested measures’).
By Decision 2016/475, KNIC’s name was entered on the list, established by the Council, of entities subject to restrictive measures at point II B of Annex II to Decision 2013/183. That listing was based on the following grounds (‘the grounds relating to KNIC’):
‘Korea National Insurance Corporation (KNIC) and its branch offices (a.k.a. Korea Foreign Insurance Company) — Haebangsan-dong, Central District, Pyongyang, DPRK — Rahlstedter Strasse 83 a, 22149 Hamburg. Korea National Insurance Corporation of Alloway, Kidbrooke Park Road, Blackheath, London SE3 0LW — Korea National Insurance Corporation (KNIC), a State-owned and controlled company, is generating substantial foreign exchange revenue which could contribute to the DPRK’s nuclear-related, ballistic-missile-related or other weapons-of-mass-destruction-related programmes. Furthermore, the KNIC headquarters Pyongyang is linked to Office 39 of the Korean Worker’s Party, a designated entity’.
Regulation No 2016/659 added KNIC’s name to point D of Annex V to Regulation No 329/2007. KNIC’s listing was, in essence, based on grounds identical to those set out in paragraph 19 above.
By Decision 2016/475, the entries concerning the applicants in Case T‑533/15 at point II A of Annex II to Decision 2013/183 were amended as follows (‘the second set of grounds relating to the applicants in Case T‑533/15’):
‘Kim Il-Su — Date of birth: 2.9.1965 — Place of birth: Pyongyang, DPRK — Manager in the reinsurance department of Korea National Insurance Corporation (KNIC) based in the headquarters in Pyongyang and former authorised chief representative of KNIC in Hamburg, acting on behalf of KNIC or at its direction.
Kang Song-Sam — Date of birth: 5.7.1972 — Place of birth: Pyongyang, DPRK — Former authorised representative of Korea National Insurance Corporation (KNIC) in Hamburg, continues to act for or on behalf of KNIC or at its direction.
Choe Chun-Sik — Date of birth: 23.12.1963 — Place of birth: Pyongyang, DPRK — Passport No 745132109 — Valid until 12.2.2020 — Director in the reinsurance department of Korea National Insurance Corporation (KNIC) based in the headquarters in Pyongyang acting on behalf of KNIC or at its direction.
Sin Kyu-Nam — Date of birth: 12.9.1972 — Place of birth: Pyongyang, DPRK — Passport No PO472132950 — Director in the reinsurance department of Korea National Insurance Corporation (KNIC) based in the headquarters in Pyongyang and former authorised representative of KNIC in Hamburg, acting on behalf of KNIC or at its direction.
Pak Chun-San — Date of birth: 18.12.1953 — Place of birth: Pyongyang, DPRK — Passport No PS472220097 — Director in the reinsurance department of Korea National Insurance Corporation (KNIC) based in the headquarters in Pyongyang at least until December 2015 and former authorised chief representative of KNIC in Hamburg, continues to act for or on behalf of KNIC or at its direction.
So Tong Myong — Date of birth: 10.9.1956 — President of Korea National Insurance Corporation (KNIC), acting on behalf of KNIC or at its direction’.
In order to reflect the amendments made to Decision 2013/183, the entries concerning the applicants in Case T‑533/15 at point C of Annex V to Regulation No 329/2007 were amended by Regulation No 2016/659. Those entries were, in essence, identical to those set out in paragraph 21 above.
On 27 May 2016, the Council adopted, on the basis of Article 29 TEU, Decision (CFSP) 2016/849 concerning restrictive measures against the Democratic People’s Republic of Korea and repealing Decision 2013/183 (
OJ 2016 L 141, p. 79
). Consequently, on 27 May 2016, the Council adopted Regulation (EU) 2016/841 amending Regulation No 329/2007 (
OJ 2016 L 141, p. 36
).
By Decision 2016/849, the Council, in line with UNSC Resolution 2270 (2016) adopted in response to the nuclear test conducted by the Democratic People’s Republic of Korea on 6 January 2016, decided to impose additional restrictive measures.
Article 27(1)(b) of Decision 2016/849 (‘the amended listing criteria’) provides:
‘1.   All funds and economic resources belonging to or owned, held or controlled, directly or indirectly, by the following persons and entities shall be frozen:
...
(b)
the persons and entities not covered by Annex I, as listed in Annex II, that: ...
(ii)
provide financial services or the transfer to, through, or from the territory of Member States, or involving nationals of Member States or entities organised under their laws, or persons or financial institutions in their territory, of any financial or other assets or resources that could contribute to the DPRK’s nuclear-related, ballistic-missile-related or other weapons of mass destruction-related programmes, or persons or entities acting on their behalf or at their direction, or entities owned or controlled by them’.
It is apparent from a combined reading of Articles 27 and 33 to 35 of Decision 2016/849 that the list of persons designated in Annex I was established by the Sanctions Committee or by the UNSC, while the list of persons designated in Annex II was established by the Council.
KNIC’s name was included on the list of entities subject to restrictive measures at point II B of Annex II to Decision 2016/849. The listing of KNIC’s name was based on grounds essentially identical to the grounds relating to KNIC mentioned in paragraph 19 above and set out in Decision 2016/475.
The names of the applicants in Case T‑533/15 were included on the list of persons subject to restrictive measures at point II A of Annex II to Decision 2016/849. The listing of the names of the applicants in Case T‑533/15 was based on grounds essentially identical to the second set of grounds relating to the applicants in Case T‑533/15 mentioned in paragraph 21 above and set out in Decision 2016/475 (‘the third set of grounds relating to the applicants in Case T‑533/15’).
Procedure and forms of order sought
By application lodged at the Court Registry on 11 September 2015, the applicants in Case T‑533/15 brought an action for annulment of the first set of contested measures.
By a document lodged at the Court Registry on 30 November 2015, the applicants in Case T‑533/15 asked the Court to rule in their favour and to give judgment by default pursuant to Article 123 of the Rules of Procedure of the General Court since, according to the applicants, the defence of the Council and that of the Commission had been lodged after the time limit prescribed for lodging those pleadings had expired.
On being questioned in that respect through a measure of organisation of procedure pursuant to Article 89 of the Rules of Procedure, the applicants in Case T‑533/15, by letter of 24 March 2016, withdrew the request that judgment be given in their favour in relation to the Commission.
On 15 March 2016, by decision of the President of the Eighth Chamber of the General Court, the United Kingdom of Great Britain and Northern Ireland was granted leave to intervene in support of the form of order sought by the Council and the Commission. By letter of 27 April 2016, the United Kingdom waived the right to lodge a statement in intervention.
Following a change in the composition of the General Court, Case T‑533/15 was assigned to a different Judge-Rapporteur.
By application lodged at the Court Registry on 27 May 2016, KNIC brought an action for annulment in Case T‑264/16 in respect of the second set of contested measures.
By a statement lodged at the Court Registry on 27 May 2016, the applicants in Case T‑533/15 modified the application, pursuant to Article 86 of the Rules of Procedure, in such a way as also to seek annulment of the second set of contested measures, in so far as those measures concern them.
By letter lodged at the Court Registry on 3 June 2016, the applicants in Case T‑533/15 again modified the application, pursuant to Article 86 of the Rules of Procedure, in such a way as also to seek annulment of Decision 2016/849, in so far as that decision concerns them, and of ‘any related Council Implementing Regulation(s)’.
By letter of 3 June 2016, KNIC modified the application in Case T‑264/16, pursuant to Article 86 of the Rules of Procedure, in such a way as also to seek annulment of Decision 2016/849, in so far as it concerns KNIC, and of ‘any related Council Implementing Regulation(s)’.
The Council and the Commission submitted observations in Case T‑533/15 on the modification of the application, by documents lodged at the Court Registry on 30 June 2016.
In those observations, the Council and the Commission requested that the proceedings in Case T‑533/15 be stayed and that the case be joined with Case T‑264/16.
By letter of 18 July 2016, the applicants in Case T‑533/15 acknowledged that there was a connection between Cases T‑533/15 and T‑264/16 that could justify joinder of the two cases. They did not, however, comment on whether it would be appropriate to stay the proceedings in Case T‑533/15.
By letter of 18 July 2016, KNIC submitted its observations on the joinder of the cases and the possible stay of proceedings in Case T‑533/15.
By letter of 21 July 2016, the applicants in Case T‑533/15 made additional comments and enclosed the letters to the Council in which they had disputed the veracity of the evidence on which the first set of contested measures was based.
By document lodged at the Court Registry on 16 August 2016, the Council commented on the modification of the application in Case T‑264/16.
By decision of 6 September 2016, the President of the Eighth Chamber decided not to stay the proceedings in Case T‑533/15.
Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Third Chamber, to which the present cases were, consequently, allocated.
By decision of the President of the Third Chamber of 9 March 2017, the cases were joined for the purposes of the oral part of the procedure.
On 13 March 2017, the parties in Cases T‑533/15 and T‑264/16 were requested, by way of a measure of organisation of procedure pursuant to Article 89 of the Rules of Procedure, to comment on the joinder of the cases for the purposes of the decision closing the proceedings.
By letter of 20 March 2017, the applicants in Case T‑533/15 and KNIC (together ‘the applicants’) indicated that they would prefer the cases not to be joined. By letters of 27 March 2017, the Council indicated that it was in favour of the cases being joined for the purposes of the decision closing the proceedings and the Commission did not express a view in that regard.
By letter of 20 March 2017, the United Kingdom declined to participate in the hearing.
By decision of the President of the Third Chamber of 4 April 2017, Cases T‑533/15 and T‑264/16 were joined for the purposes of the decision closing the proceedings.
At the hearing held on 4 May 2017, the parties presented oral argument and answered the oral questions put by the Court.
The applicants in Case T‑533/15 claim that the Court should:
–
annul Decision 2015/1066, Implementing Regulation 2015/1062, Decision 2016/475, Implementing Regulation 2016/659, Decision 2016/849 and any Council implementing regulation related to the latter decision, in so far as they concern those applicants;
–
order the Council and the Commission to pay the costs.
In Case T‑264/16, KNIC claims that the Court should:
–
annul Decision 2016/475, Implementing Regulation 2016/659, Decision 2016/849 and any related Council implementing regulation, in so far as they concern it;
–
order the Council and the Commission to pay the costs.
In Joined Cases T‑533/15 and T‑264/16, the Council contends that the Court should:
–
dismiss the actions;
–
order the applicants to pay the costs.
In Joined Cases T‑533/15 and T‑264/16, the Commission contends that the Court should:
–
dismiss the actions;
–
order the applicants to pay the costs.
At the hearing, in reply to the questions put by the Court, the applicants in Case T‑533/15 stated that the expression ‘any related Council Implementing Regulation(s)’ in the second modification of the application of 3 June 2016 meant that they were challenging only the measures expressly mentioned and not any related measures, formal note of which was taken in the minutes of the hearing.
Again in reply to a question put by the Court, at the hearing the applicants in Case T‑533/15 withdrew their application for judgment by default against the Council, formal note of which was taken in the minutes of the hearing.
In Case T‑264/16, KNIC stated at the hearing that the expression ‘any related Council Implementing Regulation(s)’ in the modification of the application of 3 June 2016 meant that it was challenging only the measures expressly mentioned and not any related measures, formal note of which was taken in the minutes of the hearing.
Law
On the procedural consequences of the repeal and replacement of Decision 2013/183
As is evident from their applications, the applicants are applying, in Case T‑533/15, for annulment of Decisions 2015/1066 and 2016/475 and, in Case T‑264/16, for annulment of Decision 2016/475.
As is evident from the background to the dispute, Decision 2013/183 was repealed and replaced by Decision 2016/849.
On 3 June 2016, the applicants, in both cases, modified their applications to cover also annulment of Decision 2016/849 in so far as it concerns them.
It must be borne in mind in that regard that, in accordance with consistent case-law in relation to actions brought against successive fund-freezing measures, an applicant still has an interest in obtaining annulment of a decision imposing restrictive measures that has been repealed and replaced by a subsequent restrictive decision, in that the repeal of an act of an institution does not constitute recognition of the unlawfulness of that act and has only prospective effect, unlike a judgment annulling an act, by which the act is eliminated retroactively from the legal order and is deemed never to have existed (see, to that effect, judgments of 12 December 2006, Organisation des Modjahedines du peuple d’Iran v Council,
T‑228/02
,
EU:T:2006:384
, paragraph
, and of 23 October 2008, People’s Mojahedin Organization of Iran v Council,
T‑256/07
,
EU:T:2008:461
, paragraphs
to
).
It follows from this that the applicants still have an interest in bringing proceedings and in seeking annulment of Decisions 2015/1066 and 2016/475, and that, therefore, the actions in Cases T‑533/15 and T‑264/16 still retain their purpose with regard to those decisions.
The order in which Cases T‑533/15 and T‑264/16 are to be dealt with
The Court considers that the action in Case T‑264/16 should be examined first, and the action in Case T‑533/15, second.
The action in Case T‑264/16
KNIC relies on four pleas in law in support of its action, alleging, respectively, breach of the obligation to state reasons, manifest error of assessment, breach of the data protection principles and disproportionate restriction of fundamental rights.
In so far as those pleas relate without distinction to all the contested measures in the present case and, moreover, the criteria underpinning the entry of KNIC’s name on the lists at issue and which are set out in Article 15 of Decision 2013/183, in Article 6 of Regulation No 329/2007 and in Article 27 of Decision 2016/849 are essentially identical, as are the grounds for including KNIC’s name on the lists in question, the Court considers it appropriate to examine the pleas raised in respect of the second set of contested measures and Decision 2016/849 together, the latter being covered as a result of the modification of the application on 3 June 2016.
First plea, alleging breach of the obligation to state reasons
KNIC submits that the Council and the Commission failed to fulfil their obligation to state clear, unequivocal and specific reasons for the entry of KNIC’s name on the lists at issue. It disputes, generally, all the reasons stated in support of its listing. In particular, KNIC claims that its listing was based on two factors which are not among the listing criteria, namely the alleged control by the North Korean State and the connection with Office 39 of the Korean Workers’ Party (‘Office 39’).
The Council and the Commission dispute KNIC’s arguments.
According to a consistent body of 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 15 November 2012, Council v Bamba,
C‑417/11 P
,
EU:C:2012:718
, paragraph
and the case-law cited; judgments of 18 February 2016, Council v Bank Mellat,
C‑176/13 P
,
EU:C:2016:96
, paragraph
, and of 8 September 2016, Iranian Offshore Engineering & Construction v Council,
C‑459/15 P
, not published,
EU:C:2016:646
, paragraph
).
As regards restrictive measures, without going so far as to require a detailed response to the comments made by the person concerned, the obligation to state reasons laid down in Article 296 TFEU entails in all circumstances that that statement of reasons identifies not only the legal basis of that measure but also the individual, specific and concrete reasons why the competent authorities consider that the person concerned must be subject to restrictive measures. The Courts of the European Union must, therefore, in particular determine whether the reasons relied on are sufficiently detailed and specific (see judgment of 18 February 2016, Council v Bank Mellat,
C‑176/13 P
,
EU:C:2016:96
, paragraph
and the case-law cited; see also, to that effect, judgment of 5 May 2015, Petropars Iran and Others v Council,
T‑433/13
,
EU:T:2015:255
, paragraph
and the case-law cited).
The statement of reasons required by Article 296 TFEU must be appropriate to the act at issue and the context in which it was adopted. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining 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 15 November 2012, Council v Bamba,
C‑417/11 P
,
EU:C:2012:718
, paragraph
and the case-law cited).
It should also be borne in mind that 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 to understand the scope of the measure concerning him (see judgment of 18 February 2016, Council v Bank Mellat,
C‑176/13 P
,
EU:C:2016:96
, paragraph
and the case-law cited).
The obligation to state adequate reasons in a measure 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 in a measure consists in a formal statement of the grounds on which that measure is based. If those grounds are vitiated by errors, those errors will vitiate the substantive legality of the act, but not the statement of reasons in it, which may be adequate even though it sets out reasons which are incorrect (see judgment of 4 February 2014, Syrian Lebanese Commercial Bank v Council,
T‑174/12 and T‑80/13
,
EU:T:2014:52
, paragraph
and the case-law cited).
In the present case, KNIC contends that the reasons for the second set of contested measures and Decision 2016/849 are not stated to the requisite legal standard so far as concerns the inclusion of its name, since the reasoning at issue is vague and unfounded.
In that regard it must be noted that recitals 1 to 12 of Decision 2013/183 set out the relevant factors of the political context within which the restrictive measures at issue were adopted. Furthermore, it is apparent from the first recital of Regulation No 329/2007 that, as a result of the nuclear test conducted on 9 October 2006, the UNSC found that there was a clear threat to international peace and security. Those acts, which the second set of contested measures seeks to amend and which therefore form part of a context that was known to KNIC, thus describe the overall situation that led to their adoption and the general objectives they are intended to achieve. Similarly, as regards the overall situation that led to the adoption of Decision 2016/849, recital 6 of that decision notes in particular that the actions of the Democratic People’s Republic of Korea earlier in 2016 are considered to be a grave threat to international peace and security in the region and beyond.
In addition, it must be noted that the grounds for including the name of KNIC on the lists in question must be read in conjunction with, and in the light of, the listing criteria set out in Article 15(1)(b)(ii) of Decision 2013/183, Article 6(2)(b) of Regulation No 329/2007 and Article 27(1)(b) of Decision 2016/849. Thus, it is clear from those provisions that all funds and economic resources belonging to the persons and entities listed in Annex II to Decision 2013/183, at point D of Annex V to Regulation No 329/2007 and in Annex II to Decision 2016/849 are to be frozen. KNIC was listed at point II B of Annex II to Decision 2013/183, as amended by Decision 2016/475, at point D of Annex V to Regulation No 329/2007, in the version amended by Regulation 2016/659, and at point II B of Annex II to Decision 2016/849.
Furthermore, it must be noted that the headings of the annexes concerned clearly refer to those provisions in which the criteria constituting the legal basis of the inclusion of KNIC’s name on the lists at issue are set out unambiguously.
The grounds relied on in support of the inclusion of KNIC’s name on the lists at issue are those set out in paragraph 19 above. It is clear from this that KNIC was listed on the ground that it was a State-owned and controlled company generating substantial foreign exchange revenue which could contribute to the nuclear-related, ballistic missile-related or other weapons of mass destruction-related programmes (‘nuclear proliferation’) of the Democratic People’s Republic of Korea. It is also evident from this that the headquarters of KNIC, in Pyongyang, is linked to Office 39, a designated entity.
Thus, notwithstanding the concise nature of that statement of reasons, KNIC was clearly in a position to understand the key facts used against it by the Council and the Commission and to defend itself adequately, as is confirmed by the line of argument it put forward in connection with the second plea. The Council and the Commission detailed the specific and concrete reasons for their view that the listing criteria did apply to KNIC.
First, that statement of reasons is founded on a legal base that is clearly identified and refers to the listing criteria and, second, that statement of reasons includes grounds that relate directly to KNIC enabling it to understand the reasons that justified the inclusion of its name on the lists in question.
Likewise, the grounds relied on and articulated by the Council and the Commission enable the Court to review the legality of the acts disputed by KNIC.
As regards the argument of KNIC as to the inadequacy of the statement of reasons with respect to the supposed link between its headquarters and Office 39, first, it is apparent from the wording of the grounds relating to KNIC that the information concerning the link between KNIC and Office 39 is put forward on a supplementary basis. Second, the reference to the link between the headquarters of KNIC and Office 39 relates to the listing criteria mentioned in Article 15 of Decision 2013/183 and Article 6 of Regulation No 329/2007 as well as in Article 27(1)(b) of Decision 2016/849. Third, it was not necessary for the Council and the Commission to clarify in detail the nature of that link, since KNIC was able, on reading the grounds and taking into account the context that gave rise to its name being included on the lists in question, to understand the statement of reasons at issue. In accordance with the aforementioned case-law, 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. The question whether that link has been established to the requisite legal standard will be considered in the analysis of the second plea in the present case.
In those circumstances, the first plea in law in the action in Case T‑264/16 must be rejected.
Second plea, alleging manifest error of assessment
By its second plea, KNIC maintains that the Council and the Commission erred in considering that the listing criteria were satisfied in KNIC’s case. In KNIC’s submission, its inclusion on the list of entities subject to sanctions has no factual basis. KNIC claims that the Council and the Commission failed to adduce sufficient evidence.
Thus, KNIC maintains that it does not provide financial services that could contribute to the weapons programmes of the Democratic People’s Republic of Korea as referred to in the listing criteria concerned. It states that it is an insurance company providing insurance to retail customers in North Korea. KNIC claims not to be State-controlled but to be an independent public undertaking. It claims not to generate substantial foreign exchange revenue.
Similarly, according to KNIC, the Council and the Commission have adduced no evidence to substantiate the assertion that its revenues have been or will be used in connection with nuclear proliferation programmes of the Democratic People’s Republic of Korea, or put forward any argument that would explain how sums ‘generated’ by KNIC could make a material contribution to those programmes. It states that the only money it transfers to the government is that corresponding to its ‘ordinary tax payment’, which would not in any event be sufficient to justify its designation.
In that context, according to KNIC, the reference to a ‘contribution’ to the weapons programmes to which the relevant listing criteria refer should be interpreted as requiring either a direct payment or payments of such significance that, without them, the weapons programme would be materially affected. KNIC refers, in that regard, to the judgments of 12 May 2016, Bank of Industry and Mine v Council (
C‑358/15 P
, not published,
EU:C:2016:338
), and of 16 July 2014, National Iranian Oil Company v Council (
T‑578/12
, not published,
EU:T:2014:678
).
In addition, KNIC takes issue with the Council for wrongly treating the present case as though it were one in which it would have been sufficient for it to establish that the entity referred to supports the Government of the Democratic People’s Republic of Korea in order to justify its designation. It refers to the judgment of 3 May 2016, Iran Insurance v Council (
T‑63/14
, not published,
EU:T:2016:264
). KNIC denies, moreover, having any connection with Office 39.
Last, it challenges both the probative value and the veracity of the evidence submitted in relation to allegedly fraudulent activities, describing it as ‘false allegations’ and ‘malicious internet gossip’.
The Council and the Commission dispute KNIC’s arguments.
First of all, it should be borne in mind that fund-freezing measures taken against a person or an entity, on the basis of the provisions relating to the common foreign and security policy, constitute targeted preventive measures for countering threats to international peace and security. Adoption of such measures falls strictly within the framework of the legal conditions established by a decision adopted on the basis of Article 29 TEU and by a regulation founded on Article 215(2) TFEU implementing that decision within the scope of the FEU Treaty. By their precautionary nature and their preventive purpose, those measures can be distinguished in particular from criminal penalties (see judgment of 16 July 2014, National Iranian Oil Company v Council,
T‑578/12
, not published,
EU:T:2014:678
, paragraph
and the case-law cited).
In the present case, it should be borne in mind that, as is evident from the recitals of Decision 2013/183 and Decision 2016/849, the Council introduced restrictive measures against the Democratic People’s Republic of Korea in response to a number of nuclear tests carried out by that State, tests which were condemned by UNSC resolutions and were considered a serious threat to international peace and security in the region and beyond. Account must, moreover, be taken of the importance for the European Union of the objective of maintaining international peace and security.
With regard to the rigour of the judicial review, matters of two kinds must be distinguished within an act concerning restrictive measures such as those at issue in the present case. Such an act is composed, on the one hand, of the general rules defining the procedures for giving effect to the restrictive measures which it introduces and, on the other, of a body of measures applying those general rules to specific entities (see, by analogy, judgment of 9 July 2009, Melli Bank v Council,
T‑246/08 and T‑332/08
,
EU:T:2009:266
, paragraph
).
As regards the general rules defining the procedures for giving effect to the restrictive measures, the Council has a broad discretion as to what to take into consideration for the purpose of adopting economic and financial sanctions on the basis of Article 215 TFEU, consistent with a decision adopted on the basis of Chapter 2 of Title V of the EU Treaty, in particular Article 29 TEU. Because the Courts of the European Union may not substitute their assessment of the evidence, facts and circumstances justifying the adoption of such measures for that of the Council, the review carried out by those Courts must be restricted to checking that the rules governing procedure and the statement of reasons have been complied with, that the facts are materially accurate and that there has been no manifest error of assessment of the facts or misuse of power. That limited review applies, especially, to the assessment of the considerations of appropriateness on which such measures are based (see judgment of 30 November 2016, Rotenberg v Council,
T‑720/14
,
EU:T:2016:689
, paragraph
and the case-law cited).
However, although the Council thus has a broad discretion as regards the general criteria to be taken into consideration for the purpose of adopting restrictive measures, the effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires that, as part of the review of the lawfulness of the grounds which are the basis of the decision to include or to maintain a person’s name on the list of persons subject to restrictive measures, the Courts of the European Union are to ensure that that decision, which affects that person individually, is taken on a sufficiently solid factual basis. That entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, are substantiated by sufficiently specific and concrete evidence (judgments of 21 April 2015, Anbouba v Council,
C‑605/13 P
,
EU:C:2015:248
, paragraphs
and
; of 26 October 2016, Portnov v Council,
T‑290/14
,
EU:T:2015:806
, paragraph
; and of 30 November 2016, Rotenberg v Council,
T‑720/14
,
EU:T:2016:689
, paragraph
).
To that end, it is for the Courts of the European Union, in order to carry out that examination, to request the competent EU authority, when necessary, to produce information or evidence, confidential or not, relevant to such an examination (see judgment of 28 November 2013, Council v Fulmen and Mahmoudian,
C‑280/12 P
,
EU:C:2013:775
, paragraph
and the case-law cited).
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 that those reasons are not well founded (see judgment of 28 November 2013, Council v Fulmen and Mahmoudian,
C‑280/12 P
,
EU:C:2013:775
, paragraph
and the case-law cited).
In addition, according to the case-law, in order to assess the nature, form and degree of the proof that the Council may be asked to provide, account must be taken of the specific nature and scope of the restrictive measures and of their purpose (judgment of 30 June 2016, CW v Council,
T‑224/14
, not published,
EU:T:2016:375
, paragraph
; see also, to that effect, judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft,
C‑348/12 P
,
EU:C:2013:776
, paragraphs
to
, and Opinion of Advocate General Bot in Anbouba v Council,
C‑605/13 P and C‑630/13 P
,
EU:C:2015:1
, point
).
Last, it must also be noted that, in a situation where the Council defines abstractly the criteria which may justify the listing of a person, or entity, in the list of persons or entities subject to restrictive measures adopted on the basis of Articles 75 and 215 TFEU, it is the task of the Court to determine, on the basis of the pleas in law raised or, where necessary, raised of its own motion, whether the case in point corresponds to the abstract criteria defined by the Council (judgment of 18 September 2014, Georgias and Others v Council and Commission,
T‑168/12
,
EU:T:2014:781
, paragraph
).
It is necessary to check in the light of that case-law, first, the description used by the Council in the grounds relating to KNIC in the second set of contested measures and Decision 2016/849 and the relevance of those grounds in the light of the listing criteria and the amended listing criteria, and, second, the sufficiency of the evidence adduced by the Council in support of those grounds.
In so far as, by its second plea, KNIC seeks to challenge the description used by the Council in the grounds relating to KNIC in the light of the listing criteria and the amended listing criteria, the Court must find as follows.
As regards the argument by which KNIC disputes the relevance of a reason founded on State control in the light of the relevant listing criteria, it is sufficient to note that State control is not a separate ground for listing but one of the grounds relating to KNIC which concerns the listing criteria in question. It is clear that the listing criteria and the amended listing criteria cover all entities engaged in the transfer of funds or of financial assets that could contribute to nuclear proliferation activities, irrespective of their status as a State-owned undertaking or their capital structure. Consequently, in so far as the grounds relating to KNIC refer to the concept of a State-owned or controlled undertaking, they are consistent with the listing criteria.
As regards the argument by which KNIC contends that it does not provide financial services that could contribute to the weapons programmes of the Democratic People’s Republic of Korea such as those covered by the listing criteria in question, it is sufficient to note that the listing criteria and the amended listing criteria, which are expressed in very general terms, cover not only the entities which provide financial services but also those which provide the transfer to, through, or from the territory of Member States of any financial or other assets that could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
The term ‘financial services’ is not used in the grounds relating to KNIC, which mention the fact that KNIC was generating substantial foreign exchange revenue. That argument of KNIC cannot, therefore, be accepted.
In those circumstances, it must be held that the arguments as to the irrelevance of the grounds relating to KNIC in the light of the listing criteria in question cannot be accepted. KNIC’s challenge as regards the interpretation of the listing criteria, which it raises in the context of allegations based on the insufficiency of the evidence, will be analysed below in addressing those allegations.
In so far as, by its second plea, KNIC criticises the Council and the Commission for the insufficiency of the evidence, it must be noted that the grounds which the Council and the Commission are required to substantiate in the present case, in the light of the listing criteria, are those which concern, first, KNIC as a State-owned entity; second, the fact that KNIC generates substantial foreign exchange revenue; and, third, the fact that that revenue could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
In that regard, it is important to recall, as the Commission points out, that, in the absence of investigative powers in third countries, the assessment of the EU authorities must rely on publicly available sources of information, reports, articles in the press, intelligence reports or other similar sources of information.
According to the case-law, press articles may be used in order to corroborate the existence of certain facts if they are sufficiently specific, precise and consistent as regards the facts there described (see judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council,
T‑255/15
, not published,
EU:T:2017:25
, paragraph
and the case-law cited).
That is the case here, the Council and the Commission having produced a number of public documents and international press articles describing KNIC’s activities in detail.
In the first place, it is apparent from the documents submitted by the Council and the Commission that KNIC is a State-owned and controlled company.
As was stated by the Commission at the hearing, under Article 21 of the Constitution of the Democratic People’s Republic of Korea, post and telecommunications, and major factories, enterprises, banks and ports are the exclusive property of the State. According to the same provision, the State gives priority to the protection and growth of its property which plays a leading role in the development of the national economy.
In the present case, it is clear from the evidence submitted to the Court that KNIC has a monopoly in the insurance sector and that, therefore, it is a large undertaking.
According to the information that was submitted by the Commission and which appears on KNIC’s website, KNIC is the ‘sole insurer of [North Korea]’ and ‘has over 10 provincial insurance branches and over 200 insurance offices at municipal (district) and county levels under its umbrella nationwide and representative offices overseas’.
In addition, the information provided by KNIC, which is best placed to provide information challenging the evidence produced by the Council and the Commission, does not contradict the finding that it is a State-owned and controlled company; in fact it confirms it.
In that regard and as a preliminary point, it should be pointed out that, while the lawfulness of acts by which the EU institutions adopt restrictive measures may, in principle, be assessed only on the basis of the elements of fact and of law on the basis of which those acts were adopted, the fact remains that a piece of evidence that has been submitted as exculpatory evidence by the person subject to the restrictive measures can be taken into consideration by the Courts of the European Union for the purpose of confirming an assessment of the lawfulness of the contested acts that is based on the elements of fact and of law underpinning the adoption of those acts (see, by analogy, judgments of 3 May 2016, Iran Insurance v Council,
T‑63/14
, not published,
EU:T:2016:264
, paragraph
, and of 3 May 2016, Post Bank Iran v Council,
T‑68/14
, not published,
EU:T:2016:263
).
Thus, in the present case, it is apparent from the document submitted to the Court entitled ‘Statute and Regulations of the Company’ that the company’s position on the insurance market in North Korea is that of a monopoly. According to the ‘Internal Management Explanatory Note’ also submitted by KNIC, ‘the profits of the Company shall be invested in other State companies and additionally in the reserve fund’. Those profits ‘may also be used for government cash-flow, as security for bonds, for the further development of the Company, and for the welfare of the whole of the people of [North Korea]’.
Similarly, according to that ‘Internal Management Explanatory Note’, KNIC is owned by the Democratic People’s Republic of Korea. Point A of that document states that ‘Korea Insurance shall report its activities to the government each year’, that ‘there shall be no shareholders’ general meeting as there are no shareholders’ and that ‘the Company is owned by the whole of the people of [North Korea]’. Likewise, at point E of that document, it is made clear that all the company’s books are to be audited by the government each year. Moreover, at the hearing, KNIC’s representatives were unable to answer a question put by the Court as to who appoints the members of the executive board of KNIC.
It follows from the foregoing that the Council did not make an error of fact in stating that KNIC was ‘a State-owned and controlled company’.
In the second place, KNIC maintains that the Council and the Commission also erred in asserting that it ‘is generating substantial foreign exchange revenue’. KNIC does not generate foreign currency. The only foreign exchange transactions with which KNIC is concerned are (i) receipts of small premiums in euros from embassies in the Democratic People’s Republic of Korea for their motor insurance and (ii) its reinsurance programme, in which it pays out more in euros by way of premium than it receives.
It appears from document Coreu CFSP/0229/15 of 11 November 2015 that, according to secret information which the Council considers reliable, KNIC is tasked with obtaining foreign currency in order to support and stabilise the ruling regime of the Democratic People’s Republic of Korea. It is also evident from that document that the amounts involved are substantial.
In that regard, it must be pointed out that KNIC does not dispute its overall profitability. It does, however, take issue with the suggestion that part of those profits are generated in foreign currency by its reinsurance activities.
First, it must 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 (see, to that effect, judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft,
C‑348/12 P
,
EU:C:2013:776
, paragraph
, and order of 1 December 2015, Georgias and Others v Council and Commission,
C‑545/14 P
, not published,
EU:C:2015:791
, paragraph
). 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 (judgments of 1 March 2016, National Iranian Oil Company v Council,
C‑440/14 P
,
EU:C:2016:128
, paragraph
, and of 12 May 2016, Bank of Industry and Mine v Council,
C‑358/15 P
, not published,
EU:C:2016:338
, paragraph
).
In the present case, it is apparent from recital 11 of Decision 2013/183 that UNSC Resolution 2094 (2013) decides that States are to prevent the provision of financial services or the transfer to, through or from their territories of any financial or other assets or resources, including bulk cash, in relation to activities that could contribute to the nuclear or ballistic missile programmes of the Democratic People’s Republic of Korea, or other activities prohibited by UNSC Resolutions 1718 (2006), 1874 (2009), 2087 (2013) or 2094 (2013), or to the evasion of measures imposed by those resolutions.
Likewise, it is apparent from recitals 14 and 15 of Decision 2016/849 that UNSC Resolution 2270 (2016) expands the scope of the measures applicable to the financial sector. In the context of the measures applicable to the financial sector, the Council considers that it is appropriate to prohibit transfers of funds to and from North Korea, unless specifically authorised in advance, as well as investment by the Democratic People’s Republic of Korea in the territories under the jurisdiction of Member States and investment by nationals or entities of the Member States in North Korea.
Having regard to the foregoing, the grounds relating to KNIC must also be read in the light of the listing criteria in question, which are formulated in very general terms and refer to the concepts of ‘any financial or other assets or resources’. Furthermore, the listing criteria in question are also based on the transfer to, through or from the territories of the Member States, and that should be taken into account in interpreting the expression ‘generating foreign exchange revenue’ which is used in the grounds for the listing of KNIC.
Consequently, the expression ‘generating foreign exchange revenue’ used in the grounds relating to KNIC must be interpreted in accordance with its wording and its purpose not as referring to the foreign exchange profits obtained by KNIC but as referring to any foreign exchange resource generated by the entity concerned as a result of its activities.
Second, with regard to the expression used in the grounds relating to KNIC according to which KNIC is generating substantial foreign exchange revenue, the Council and the Commission relied, in that respect, on publicly available sources concerning KNIC’s activities, such as its website, the excerpt from the commercial register relating to Korea National Insurance Corporation Zweigniederlassung Deutschland (‘KNIC ZD’), KNIC’s branch in Germany, and press articles. It was apparent from all of that information that KNIC operates on the territory of the European Union, in particular, by concluding contracts with large economic operators in the insurance sector, and that it is in the context of the latter activity that KNIC is generating foreign exchange revenue.
According to information taken from that website and submitted by the Commission, KNIC is active both in the field of life and non-life insurance and in the field of reinsurance, among other activities such as trade operations. It is apparent from that website that KNIC generates a substantial annual profit (11.5 billion North Korean won (around EUR 80.5 million) in 2014 alone).
As the Commission correctly noted, since money is fungible, even if, as KNIC argues, KNIC’s ‘reinsurance’ branch generates losses, it still provides KNIC with a source of foreign currency and, so far as the losses are concerned, these can easily be offset by profits in other areas of KNIC’s activity.
Third, the information provided by KNIC does not contradict the statement that it is generating foreign exchange revenue.
While asserting that the reinsurance programme costs it more in premiums than it receives in insurance claims, KNIC explains, putting forward a quantified analysis in support of its assertions, that, over the past five years, it has paid a total of EUR 441060102 in premiums to reinsurers and has made reinsurance recoveries totalling EUR 324412306.
In so doing, KNIC itself acknowledges having received foreign currency in excess of EUR 300000000. That must be regarded as a substantial sum.
Moreover, KNIC does not dispute information supplied by the Commission according to which KNIC’s reinsurance business involves international insurance companies, some of which are within the territory of the European Union. Furthermore, in the reply, KNIC confirms that it carries out foreign exchange transactions. It is also apparent from the letter from KNIC of 16 June 2016 that KNIC had to ‘convert some of its Korean won income into euros ... in order to pay premiums to its reinsurers’.
KNIC also emphasises that it was subject to legal proceedings in the United Kingdom in connection with allegations of false reinsurance claims. According to the
Washington Post
article submitted by the Council, those proceedings before the courts of the United Kingdom culminated in KNIC receiving USD 58 million.
KNIC is highly critical of the information concerning possible reinsurance fraud.
It is sufficient in that regard to note that the issue of fraud is outside the scope of the listing criteria and the amended listing criteria. Nor is the fraud issue among the grounds relating to KNIC. Accordingly, there is no need for the Court to rule on KNIC’s claims in relation to that issue.
Having regard to all of the foregoing, it must be concluded that the Council did not make any error of assessment in finding that KNIC generated substantial foreign exchange revenue.
In the third place, as regards KNIC’s contention that the revenue it generates could not contribute to nuclear proliferation-related programmes of the Democratic People’s Republic of Korea, there are two elements that must be distinguished in KNIC’s arguments.
First, KNIC claims that the expression ‘contribute to the programmes’ in the listing criteria in question must be interpreted as requiring either a direct payment or payments of such significance that, without them, the weapons programme would be materially affected.
In that regard, it should be noted that KNIC did not put forward a plea of illegality, as provided for in Article 277 TFEU, on account of the allegedly disproportionate nature of the listing criteria in question. By its arguments, however, KNIC criticises the Council’s and the Commission’s interpretation of the listing criteria in question.
It should be recalled, first of all, that the Council enjoys a broad discretion as regards the general and abstract definition of the legal criteria and procedures for adopting restrictive measures (see, to that effect, judgments of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft,
C‑348/12 P
,
EU:C:2013:776
, paragraph
, and of 29 April 2015, Bank of Industry and Mine v Council,
T‑10/13
,
EU:T:2015:235
, paragraphs
to
,
,
and
).
In the present case, neither the listing criteria nor the amended listing criteria require that direct payments or quantitatively significant payments be made to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
The terms used in the relevant provisions applicable in the present case are clearly those of economic resources and assets that ‘could contribute’ to those programmes.
Contrary to what is maintained by KNIC, the listing criteria in question do not cover all entities linked to the Democratic People’s Republic of Korea or all North Korean taxpayers but, in essence, persons and entities providing financial services or the transfer to, through or from the territory of Member States of any financial or other assets that could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
In the light of the actual purpose, nature and object of the restrictive measures in question, the criterion ‘could contribute’ as set out in the listing criteria and the amended listing criteria must be interpreted as relating to persons and entities whose activities could contribute to nuclear proliferation given their status in the regime in question, even if they do not, as such, have any direct or indirect link with nuclear proliferation.
As is apparent from paragraphs 130 to 137 above, in the context of its activities, KNIC generates substantial foreign exchange revenue and its overall profitability is in excess of EUR 80 million per year. Accordingly, it does not, in any event, fall within the category of ordinary taxpayers to which it refers.
Furthermore, the arguments of KNIC based on the judgments of 12 May 2016, Bank of Industry and Mine v Council (
C‑358/15 P
, not published,
EU:C:2016:338
), and of 16 July 2014, National Iranian Oil Company v Council (
T‑578/12
, not published,
EU:T:2014:678
), and according to which the reference to a weapons programmes ‘contribution’ covered by the relevant listing criteria should be interpreted as requiring either a direct payment or payments of such significance that, without them, the weapons programme would be materially affected cannot call those findings in question.
The interpretation of the relevant listing criteria that is proposed in the present case is entirely consistent with the statements on interpretation recalled by the Court of Justice in the judgment of 1 March 2016, National Iranian Oil Company v Council (
C‑440/14 P
,
EU:C:2016:128
). Thus, it was held 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 1 March 2016, National Iranian Oil Company v Council,
C‑440/14 P
,
EU:C:2016:128
, paragraph
).
As has already been pointed out in paragraph 92 above, the restrictive measures against the Democratic People’s Republic of Korea were imposed in response to a number of nuclear tests carried out by the Democratic People’s Republic of Korea, which were condemned by UNSC resolutions and considered a serious threat to an important objective of the European Union, that of maintaining international peace and security.
In that context, if, as KNIC submits, the restrictive measures in question covered only entities or persons directly linked to nuclear proliferation activities and contributing directly to those activities, and not also entities and persons who ‘could contribute’ to those activities, the attainment of the Council’s objectives might be frustrated since support, particularly financial support, for nuclear proliferation activities could easily be given through other entities or persons indirectly linked with those activities.
It follows that the Council was entitled to consider that the formulation of the listing criteria in question and the adoption of restrictive measures against KNIC was likely to contribute to putting pressure on the North Korean regime that might put an end to, or attenuate, the nuclear proliferation activities (see, to that effect and by analogy, judgment of 5 November 2014, Mayaleh v Council,
T‑307/12 and T‑408/13
,
EU:T:2014:926
, paragraphs
and
).
Second, in so far as KNIC relies on the insufficiency of the evidence and disputes the fact that the revenue which it generates contributes to the nuclear proliferation-related activities of the Democratic People’s Republic of Korea, suffice it to note that, in the light of the listing criteria in question, the Council is not obliged to present evidence that the resources of a particular entity have been used directly for the purposes of the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea; rather, it is for the Council to substantiate its decision in the most plausible manner possible with a body of evidence showing that those resources may contribute to that end (see, by analogy, judgment of 21 April 2015, Anbouba v Council,
C‑630/13 P
,
EU:C:2015:247
, paragraph
).
Any other interpretation would conflict not only with the wording of the listing criteria in question but above all with the object and purpose of the restrictive measures regime in relation to the Democratic People’s Republic of Korea. In addition, in the absence of investigative powers in third countries, gathering evidence of a tangible contribution to nuclear activities in that State is, at the very least, excessively difficult.
In the present case, first of all, it must be pointed out that KNIC has acknowledged that it paid ordinary tax to the North Korean State, although it did not specify the amount.
Next, it must be noted that it is apparent from the analysis in paragraphs 112 to 114, 120 to 121 and 130 to 137 above that KNIC is a profitable undertaking, with a monopoly in the insurance market, which generates substantial foreign exchange revenue.
Last, as is apparent from the analysis in paragraphs 110 to 118 above, KNIC is a State entity, the property of the North Korean State.
Given all those points, it must be held that, as the Commission correctly submits, the fact that KNIC is a State entity would tend to indicate that the foreign exchange revenue generated by that entity may contribute to the State programme of nuclear proliferation, in so far as the North Korean State can decide how the revenue generated by KNIC is to be used. Accordingly, the Council and the Commission did not make any error of assessment in finding that the revenue generated by KNIC could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
In the light of the foregoing, it must be held that all the abovementioned matters constitute a set of indicia sufficiently specific, precise and consistent to establish in all likelihood that KNIC is a State-owned and controlled company and that it is generating substantial foreign exchange revenue which could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
In those circumstances, it must be held that the Council and the Commission did not make any error of assessment in stating, in the grounds relating to KNIC, that KNIC is a State-owned and controlled company and that it is generating substantial foreign exchange revenue which could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
In the fourth place, as regards the existence of a link between KNIC and Office 39, which KNIC denies, it must be noted, having regard to the file submitted to the Court, that, in the absence of any information or evidence as to the nature and existence of that link, the Council and the Commission have not substantiated to the requisite standard that aspect of the grounds.
However, the fact that the Council and the Commission have not substantiated to the requisite standard that aspect of the grounds at issue before the Court does not call in question the legality of those grounds. It is evident from the case-law that if, at the very least, one of the reasons mentioned in the summary provided is sufficiently detailed and specific, that it is substantiated and that it constitutes in itself sufficient basis to support that measure, the fact that the same cannot be said of other such reasons cannot justify the annulment of that measure (see, by analogy, judgment of 14 January 2015, Abdulrahim v Council and Commission,
T‑127/09 RENV
,
EU:T:2015:4
, paragraph
and the case-law cited).
In the present case, the finding that KNIC is a State-owned and controlled company which is generating substantial foreign exchange revenue that could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea constitutes in itself sufficient basis for the entry of KNIC’s name on the lists at issue.
Consequently, the second plea in law must be rejected.
Third plea, alleging breach of data protection principles
By its third plea, KNIC claims that the Council and the Commission are required by Article 4 of Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data (
OJ 2001 L 8, p. 1
) to ensure that all personal data are processed fairly and lawfully, are accurate and up to date and, if not, are erased or rectified. Under Articles 14 and 16 of that regulation, the data subject is entitled to have inaccurate data rectified without delay and to have those data erased if their processing is unlawful.
KNIC maintains that the Council and the Commission published incorrect data in this case, implying that KNIC was involved in unlawful activity connected with the unlawful development of weapons of mass destruction, in breach of those articles. The publication of the data had a severe impact on KNIC. The negative effect on its reputation is, or should be, self-evident. It submits that there might be practical consequences too of making unfounded allegations of serious wrongdoing of this kind.
The Council and the Commission dispute KNIC’s arguments, contending that they cannot affect the legality of the second set of contested measures and Decision 2016/849.
By this plea, KNIC claims, in essence, that the Council and the Commission infringed Articles 4, 10, 14 and 16 of Regulation No 45/2001.
It should be pointed out that, while confining itself to listing the provisions of Regulation No 45/2001 and passages from an opinion of the European Data Protection Supervisor, KNIC’s overall claim is that the Council and the Commission published incorrect data implying KNIC’s involvement in unlawful activities.
According to KNIC, unless the Council and the Commission can establish that KNIC’s listing is well founded, its listing will involve a breach of data protection principles.
It is sufficient in that regard to find that, in the light of the examination of the second plea in the present action, the grounds relating to KNIC are not vitiated by an error of assessment and, consequently, the Council and the Commission did not publish incorrect data implying KNIC’s involvement in unlawful activities.
The present plea cannot, therefore, succeed.
In any event, this plea is ineffective.
Even if the Council and the Commission had processed personal data concerning KNIC in a way that was inconsistent with Regulation No 45/2001, that could not lead to the annulment of the second set of contested measures and Decision 2016/849. However, were KNIC to be in a position to prove that data were processed in that way, it could invoke an infringement of that regulation, in the context of an action for damages (see, to that effect, judgments of 30 November 2016, Rotenberg v Council,
T‑720/14
,
EU:T:2016:689
, paragraph
, and of 22 November 2017, HD v Parliament,
T‑652/16 P
, not published,
EU:T:2017:828
, paragraphs
and
).
In those circumstances, the present plea in law must be rejected as unfounded.
Fourth plea, alleging disproportionate restriction of fundamental rights
By its fourth plea, KNIC claims that there has been a disproportionate restriction of the right to property and of the freedom to conduct a business within the meaning of Article 16 of the Charter of Fundamental Rights. It recalls that the right to respect for its private and family life, its home and its reputation are protected by Article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’). KNIC relies in that regard on the principle of proportionality, one of the general principles of EU law.
According to KNIC, the second set of contested measures and Decision 2016/849 severely restrict its ability to deal with its property. As demonstrated in the witness statement of Mr Paek Ju Hyok, the practical effect of those acts is that third parties are reluctant to do business with KNIC. The consequence of this, according to KNIC, is that it is no longer able to place reinsurance cover, recover debts due to it from overseas counterparties, gain access to its international assets or do business with its international counterparties.
KNIC argues that the harm caused by the second set of contested measures and Decision 2016/849 is on any view wholly disproportionate to their aims, since KNIC generates no revenue for the Democratic People’s Republic of Korea. It is therefore neither appropriate nor necessary to freeze KNIC’s assets in order to pursue the aim of preventing the Democratic People’s Republic of Korea from advancing its nuclear proliferation programmes.
The Council and the Commission dispute those arguments.
By its fourth plea, KNIC relies, in essence, on the disproportionate restriction of its right to property and its freedom to conduct a business. Since the reference to the infringement of Article 8 of the ECHR is not substantiated by any argument, that complaint must be rejected as inadmissible, in so far as it does not satisfy the requirements of Article 76 of the Rules of Procedure as to clarity.
In the first place, on the assumption that, by those very general arguments, KNIC is challenging the proportionality of the listing criteria in claiming that the entry of its name on the lists in question and the harm caused by the second set of contested measures and by Decision 2016/849 is disproportionate to the aims of those measures, suffice it to note that KNIC did not put forward any plea of illegality, as provided for in Article 277 TFEU, in respect of the listing criteria and the amended listing criteria.
However, KNIC cannot dispute the proportionality of the listing criteria without invoking their illegality by means of a plea of illegality under Article 277 TFEU (see, to that effect, judgments of 20 February 2013, Melli Bank v Council,
T‑492/10
,
EU:T:2013:80
, paragraphs
and
, and of 20 March 2013, Bank Saderat v Council,
T‑495/10
, not published,
EU:T:2013:142
, paragraphs
to
).
Moreover, and in any event, it must be pointed out that the arguments put forward by KNIC in connection with the present plea do not call in question the legality of those listing criteria. Those arguments are based on KNIC’s particular circumstances, in that they were formulated by reference to its specific situation and are based on the alleged harm caused by the entry of its name on the lists in question and not on the lack of proportionality of those criteria as such.
In the second place, KNIC bases its argument as to the disproportionate nature of the restrictive measures to which it is subject on the premiss that it does not generate any revenue for the Democratic People’s Republic of Korea. It infers from this that it cannot be appropriate or necessary to freeze its assets in order to pursue the aim of preventing the Democratic People’s Republic of Korea from advancing its nuclear proliferation programmes.
However, as is apparent from the examination of the second plea in the context of the present action, the grounds relating to KNIC are not vitiated by an error of assessment.
Accordingly, the present plea must be rejected.
In the light of all the foregoing considerations, KNIC’s action in Case T‑264/16 must be dismissed in its entirety.
The action in Case T‑533/15
The action brought by the applicants in Case T‑533/15 with regard to the first set of contested measures
–
First plea, alleging breach of the obligation to state reasons
By their first plea, the applicants in Case T‑533/15 submit that the Council and the Commission failed to fulfil their obligation to state clear, unequivocal and specific reasons for including the applicants’ names on the lists concerned.
According to the applicants in Case T‑533/15, the first set of contested measures does not indicate which precise element of the listing criteria set out in the first set of contested measures is being invoked with respect to each of them. Furthermore, Mr Kang Song-Sam submits that, by designating a person who does not exist, namely Kang Song-Nam, the first set of contested measures infringes the obligation to state reasons.
The applicants in Case T‑533/15 dispute the finding that they acted ‘on behalf of KNIC’. In their submission, the question arises whether that expression refers to an entity that exists, such as KNIC ZD or KNIC. In the latter case, the entity is a non-designated entity, which cannot be relevant to the initial listing criteria. If, on the other hand, that expression refers to a non-existent entity, namely‘KNIC GmbH’, any actions would be on behalf of an entity that does not exist. Furthermore, they claim that the names of Mr Sin Kyu-Nam and Mr Pak Chun-San were wrongly included in the lists in question on the basis that they are ‘former’ authorised plenipotentiary representatives of KNIC GmbH.
The Council and the Commission dispute the arguments of the applicants in Case T‑533/15.
The Council reiterates that the statement of reasons concerning the applicants in Case T‑533/15 refers to the fact that they hold offices in KNIC ZD and act on behalf of KNIC or at its direction. Furthermore, the Commission notes that it is sufficient for the Council and the Commission to explain the roles in which those individuals, as representatives of KNIC ZD, acted on behalf of KNIC or at its direction.
As has previously been observed, while 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 measure 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, that statement of reasons must, however, be adapted to the nature of the act at issue and to the context in which it was adopted. In that regard, 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 and, in particular, in the light of the interest which the addressees of the measure may have in obtaining explanations. Consequently, 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 to understand the scope of the measure concerning him (see judgment of 28 March 2017, Rosneft,
C‑72/15
,
EU:C:2017:236
, paragraph
and the case-law cited).
In the present case it must be noted that recitals 1 to 12 of Decision 2013/183 set out the relevant elements of the political context in which the restrictive measures at issue were adopted. Furthermore, it is apparent from recital 1 of Regulation No 329/2007 that, as a result of the nuclear test conducted on 9 October 2006, the UNSC found that there was a clear threat to international peace and security. Those acts, which the first set of contested measures seeks to amend and which therefore form part of a context that was known to the applicants in Case T‑533/15, thus describe the overall situation that led to their adoption and the general objectives they were intended to achieve.
The first set of grounds relating to the applicants in Case T‑533/15 is set out in paragraph 16 above.
In that context, the applicants in Case T‑533/15 claim that the Commission tacitly changed the reasons underpinning the first set of contested measures in order to treat the reasons given in relation to KNIC GmbH as though they had been given in relation to the head office of KNIC. They state that they are obliged to guess what the Commission and Council mean by the reasons given for their designation and as to how it is said that those reasons fall within the listing criteria.
Admittedly, it must be noted that the first set of grounds is somewhat imprecise in that reference is made to the entity ‘KNIC GmbH’ as the entity within which the applicants in Case T‑533/15 supposedly held positions. However, as is evident from the explanations given by the Council and the Commission, the reference to the entity ‘KNIC GmbH’ is an error in the name of the entity to which the Council intended to refer: KNIC ZD, KNIC’s branch in Hamburg, Germany. The reference to ‘KNIC GmbH’ must therefore be understood as referring to KNIC ZD.
Nevertheless, the first set of grounds relating to the applicants in Case T‑533/15 enabled them to understand that the Council was relying on the positions held within KNIC ZD in order to justify the inclusion of their names on the lists concerned. First, it must be noted that the parties are agreed as to the fact that the entity called KNIC GmbH does not exist. Second, it must be pointed out that the reference to ‘KNIC GmbH’ was accompanied by a reference to Hamburg or to the address of ‘KNIC GmbH’ in Hamburg which was the same as the address of KNIC ZD. Third, in view of the positions held by the applicants in Case T‑533/15 within KNIC or KNIC’s branch in Germany, those applicants could not have been unaware of the fact that KNIC operates in Germany through its branch office, KNIC ZD. Therefore, the applicants in Case T‑533/15 were, notwithstanding the error in the name, in a position to understand that the reference ‘KNIC GmbH’ corresponded to KNIC ZD.
In the case of Mr Kim Il-Su, Mr Choe Chun-Sik, Mr Sin Kyu-Nam, Mr Pak Chun-San and Mr So Tong Myong, as is demonstrated by their witness statements and the arguments set out in connection with the second plea in the present action, alleging a manifest error of assessment, the lack of precision of the first set of contested measures did not prevent them from understanding that they had been targeted because of the positions they held in KNIC in Germany and their actions on behalf of KNIC or at its direction.
In the case of the person identified in the first set of contested measures as ‘Kang Song-Nam’, as the Commission submits, it is sufficient to note that transliteration from Korean to English often gives rise to a number of possible and acceptable translations. Consequently, that error does not in any way preclude Mr Kang Song-Sam’s understanding of the first set of contested measures by which the Council targeted him because of the position he held, namely as authorised plenipotentiary representative of KNIC ZD, as is, moreover, confirmed both by the fact that Mr Kang Song-Sam brought the present action and by the fact that he relies, in the second plea, on manifest errors of assessment.
Since the first set of grounds relating to the applicants in Case T‑533/15 specifies in respect of each applicant the nature of his relationship with the designated entities, those grounds are such that those applicants are able to understand what is in fact alleged against them, and are thus in a position to determine whether the allegation is well founded and to challenge it with precision. Consequently, it must be held that the statement of reasons is sufficient.
In the light of the foregoing considerations, the plea alleging breach of the obligation to state reasons must be rejected, while the merits of the reasons on which the Council relied in the first set of contested measures with respect to the applicants in Case T‑533/15 must be assessed in the context of the second plea.
–
Second plea, alleging manifest error of assessment
By their second plea, the applicants in Case T‑533/15 submit that the Council and the Commission manifestly erred in taking the view that the initial listing criteria were satisfied in their case.
They restate their argument that KNIC GmbH does not exist. KNIC’s office in Germany is KNIC ZD, which is a branch office, not a subsidiary, of KNIC. Because KNIC GmbH does not exist, the reasons set out in the first set of contested measures cannot apply to them or be well founded.
In essence, the applicants in Case T‑533/15 submit that they no longer represent or have never represented KNIC ZD or KNIC.
The Council contends that the applicants in Case T‑533/15 hold offices in KNIC ZD and act on behalf of KNIC or at its direction. According to the Commission, it is established that the applicants in Case T‑533/15 act on behalf or at the direction of KNIC or are under its control.
In the first place, it must be stated that the review as to whether the inclusion of the applicants in Case T‑533/15 on the lists annexed to the first set of contested measures was well founded must be carried out by assessing whether their respective situations constitute sufficient evidence to establish that those applicants satisfy the general criteria laid down by the Council in Article 15(1)(b)(ii) of Decision 2013/183 in order to define the circle of individuals who may be subject to such measures. Such an appraisal must be carried out by examining the evidence not in isolation but in the context in which it fits (see, by analogy, judgment of 21 April 2015, Anbouba v Council,
C‑605/13 P
,
EU:C:2015:248
, paragraph
and the case-law cited).
On a general note, it must be stated that, in the context of the restrictive measures adopted in order to exert pressure on the Democratic People’s Republic of Korea, the listing criteria contained in the legislation applicable at the time of the adoption of the first set of contested measures covered direct involvement in the programmes of the Democratic People’s Republic of Korea based on engagement in or support for nuclear proliferation-related programmes (Article 15(1)(a) of Decision 2013/183); responsibility for those programmes (Article 15(1)(b)(i) of Decision 2013/183); the provision of financial services that could contribute to the programmes of the Democratic People’s Republic of Korea (Article 15(1)(b)(ii) of Decision 2013/183); and the supply of arms (Article 15(1)(b)(iii) of Decision 2013/183). The applicable legislation also defined, in Article 15(1)(b)(ii) of Decision 2013/183, the listing criteria capable of constituting the legal basis of the listing of entities or natural persons which were based on the links maintained with a person or entity providing financial services or the transfer of any financial or other assets or resources that could contribute to the programmes of the Democratic People’s Republic of Korea.
The applicants in Case T‑533/15 fall within the category of persons acting on behalf, or at the direction, of persons or entities within the meaning of Article 15(1)(b)(ii) of Decision 2013/183 and of Article 6(2)(b) of Regulation No 329/2007 as amended by Regulation No 696/2013.
In the present case, it is necessary, therefore, to examine the validity of the listing of the applicants in Case T‑533/15 in the light of their links with the entities on whose behalf they are deemed to act.
In the second place, it must be pointed out that, in the first set of grounds relating to the applicants in Case T‑533/15, the Council emphasised the link between those applicants and KNIC GmbH, as well as the link between those applicants and KNIC.
First, as regards the various positions held by the applicants in Case T‑533/15 in KNIC GmbH, it is apparent from paragraphs 196 and 197 above that the error in the name of the entity to which the Council intended to refer did not prevent those applicants from understanding the meaning and scope of the first set of grounds. Thus, it is apparent from the arguments which the applicants in Case T‑533/15 put forward in the present action that the reference to ‘KNIC GmbH’ must be, and has been, construed as referring to KNIC ZD, a designated entity.
In any event, the listing of the entity named ‘KNIC GmbH’, which must be construed as covering the activities of the branch office of KNIC in Germany, is not the subject matter of the present action.
Second, as regards actions taken on behalf or at the direction of KNIC, it is common ground that KNIC is not an entity that is designated by the first set of contested measures.
However, it must be noted that, as regards KNIC, the first set of grounds relating to the applicants in Case T‑533/15 is not based on specific positions held but on the fact that those applicants are ‘acting on behalf of KNIC or at its direction’. The Council asserts that the first set of grounds is based on the fact that the applicants in Case T‑533/15 hold offices in KNIC ZD and are acting on behalf of KNIC or at its direction. Furthermore, the Commission notes that it is sufficient for the Council and the Commission to explain the roles in which those individuals, as representatives of KNIC ZD, acted on behalf of KNIC or at its direction.
It is evident from the German commercial register submitted by the Council in Annex B.4 to the defence that KNIC ZD is a branch office of KNIC, a company governed by North Korean law. As is clear from the witness statement of Mr Paek Ju Hyok, Vice-President of KNIC, in Annex A.10 to the application, KNIC ZD is a representative office of KNIC in Germany, the purpose of which is to provide a point of contact for reinsurance companies.
In that regard, in the present case, the reference to KNIC in the first set of grounds relating to the applicants in Case T‑533/15 must be understood as reinforcing the summary of reasons establishing the link between the activities of those applicants and KNIC in its capacity as an entity controlling the activities of KNIC ZD in Germany. In other words, as is apparent from the explanations given by the Council at the hearing, KNIC ZD was designated in order to cover the business conducted by KNIC in Germany through its branch office. This is, moreover, confirmed by the wording of the second set of contested measures, which designated KNIC and its branch offices by name.
In all events, as was confirmed by all the parties at the hearing, in the light of the very purpose, nature and object of the restrictive measures at issue, it must be possible to list the name of an entity or a natural person ‘acting on behalf of or at the direction’ of entities falling within Article 15(1)(b) of Decision 2013/183 and Article 6(2)(b) of Regulation No 329/2007, as amended by Regulation No 696/2013, even if the latter entities have not themselves been designated.
Consequently, it must be held that, in order to substantiate the fact that a person had been correctly designated as acting ‘on behalf of KNIC or at the direction of KNIC’, the Council was obliged to prove the links between the applicants in Case T‑533/15 and KNIC or KNIC ZD, in accordance with the terms of the first set of grounds relating to those applicants.
In the third place, as regards the evidence relating to the links between the applicants in Case T‑533/15 and KNIC or KNIC ZD, the Court must find as follows.
In this context, it must be noted at the outset that the applicants in Case T‑533/15 themselves confirm their links with KNIC ZD and KNIC, whilst emphasising that they had severed those links before the first set of contested measures was adopted or because of their adoption.
As regards Mr Kim Il-Su, he was designated by the first set of contested measures because of his position as authorised plenipotentiary representative of the EU-designated KNIC GmbH, acting on behalf of KNIC or at its direction.
Mr Kim Il-Su states that he worked for KNIC ZD from February 2009 until June 2015. He continued to work for KNIC, but was not a representative of KNIC ZD, plenipotentiary or otherwise, as explained in his witness statement.
It is apparent from the excerpt from the commercial register relating to KNIC ZD dated 30 June 2015 in Annex B.4 to the Council’s defence that Mr Kim Il-Su was authorised to represent KNIC ZD. He was named, as successor to Mr Pak Chun-San, as KNIC ZD’s representative by a certificate issued by KNIC and sent to the Amtsgericht Hamburg (Local Court, Hamburg, Germany) dated 28 July 2009, attached as Annex B.7 to the Commission’s defence. In addition, in his witness statement, attached as Annex A.4 to the application, he does not dispute having taken over in 2009 the position of KNIC ZD’s representative previously held by Mr Pak Chun-San; on the contrary, he confirms this.
As regards the witness statement of Mr Kim Il-Su, it must be observed that, pursuant to settled case-law, the activity of the Court of Justice and of the General Court is governed by the principle of the unfettered evaluation of evidence, and that it is only the reliability of the evidence before the Court which is decisive when it comes to the assessment of its value. In addition, in order to assess the probative value of a document, regard should be had to the credibility 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 (see, to that effect, judgment of 27 September 2012, Shell Petroleum and Others v Commission,
T‑343/06
,
EU:T:2012:478
, paragraph
and the case-law cited).
It must be observed, however, that the witness statement of Mr Kim Il-Su was made specifically for the present action and that, originating as it does from a person subject to the restrictive measures at issue, the witness statement has little probative value. The Council and the Commission could therefore properly rely on the excerpt from the commercial register in relation to KNIC ZD, dated 30 June 2015, and the certificate by KNIC that was sent to the Amtsgericht Hamburg (Local Court, Hamburg), which were public documents available at the time of the adoption of the first set of contested measures, and use them as proof of the position held by Mr Kim Il-Su.
Last, the statement by Mr Kim Il-Su that he had ceased to hold that position in January 2015 is contradicted by the excerpt from the commercial register dated 16 March 2016 submitted by the Commission in Annex F.1 to its observations on the statement of modification, from which it is apparent that Mr Kim Il-Su appeared in that excerpt as the person authorised to represent KNIC ZD.
The grounds for his listing are not, therefore, vitiated by an error of assessment.
As to the situation of Mr Kang Song-Sam, he was designated by the first set of contested measures because of his position as authorised plenipotentiary representative of the EU-designated KNIC GmbH, acting on behalf of KNIC or at its direction.
Mr Kang Song-Sam states that he continues to act as representative of KNIC ZD, and not of KNIC GmbH, which does not exist. His status as representative of that company is not, he maintains, by itself sufficient to justify his listing.
It must be noted that, by those arguments, and by his witness statement, attached as Annex A.5 to the application, Mr Kang Song-Sam neither disputes nor calls in question the Council’s and the Commission’s assertions that he was KNIC’s representative in the Hamburg branch office at the time of the adoption of the first set of contested measures. Thus, it is apparent from that witness statement that he has occupied that post since December 2013 and that he succeeded Mr Sin Kyu-Nam. It is also apparent from his witness statement in Annex E.7 to the statement of modification of the form of order sought that he occupied that post at KNIC ZD in Hamburg until September 2015. The grounds for his listing are not, therefore, vitiated by an error of assessment.
As regards Mr Choe Chun-Sik, he was designated by the first set of contested measures because of his position as authorised plenipotentiary representative of the EU-designated entity KNIC GmbH, acting on behalf of KNIC or at its direction.
Mr Choe Chun-Sik states that, in January 2015, he was asked by KNIC to become its chief representative at its office in Hamburg, to replace the previous representative, Mr Kim Il-Su. However, he submits that, as explained in his witness statement, attached as Annex A.6 to the application, he never acted as such because he was refused a visa by the German authorities.
It must be noted in that regard that Mr Choe Chun-Sik does not deny having been chosen by KNIC to become its representative at KNIC ZD in Germany. The fact that he was in fact unable to take up his post in Hamburg because of the refusal of a visa does not mean that he is not linked to the activities of KNIC ZD or of KNIC and, therefore, does not in any way affect his capacity as a person acting on behalf of KNIC and at its direction in the generation of foreign currency by KNIC.
First, as Mr Choe Chun-Sik himself indicates, he holds the post of director in the reinsurance department of KNIC in Pyongyang, which is an activity carried out by KNIC in Europe as a result of which it receives foreign currency.
Second, as was pointed out in paragraph 215 above, it is clear from the witness statement of Mr Paek Ju Hyok, Vice-President of KNIC, in Annex A.10 to the application, that KNIC ZD was a representative office of KNIC in Germany, the purpose of which was to provide a point of contact for reinsurance companies.
Furthermore, it is apparent from paragraph 216 above that KNIC is the entity which directs and controls the activities of KNIC ZD in Germany, and, moreover, from the file submitted to the Court and in particular the witness statement of Mr Kim Il-Su attached as Annex A.4 to the application, that the branch office of KNIC in Germany was a point of contact between KNIC, reinsurance companies and European brokers, that it was not authorised to sign contracts or to make or receive any payments and that it did not have a bank account. Consequently, the individuals holding management positions within KNIC’s reinsurance department may be regarded as being involved in the generation of foreign currency referred to in the grounds at issue with respect to KNIC ZD and KNIC.
The grounds for the listing of Mr Choe Chun-Sik so far as concerns his acting ‘on behalf of KNIC or at its direction’ are not, therefore, vitiated by an error of assessment.
As regards Mr Sin Kyu-Nam, he was designated by the first set of contested measures because of his position as head of department of KNIC headquarters in Pyongyang and former authorised plenipotentiary representative of KNIC GmbH in Hamburg. He acted on behalf of KNIC or at its direction.
Mr Sin Kyu-Nam indicates that, as explained in his witness statement, attached as Annex A.7 to the application, he held the position of representative at KNIC’s office in Hamburg from June 2008 to November 2013. He states that he continues to work at KNIC, but is not a representative of KNIC ZD. Likewise, he is not ‘Head of Department of KNIC Headquarters in Pyongyang’, as the head of department is the managing director, whereas the applicant is only a director within that department.
In that regard, it must be noted that Mr Sin Kyu-Nam does not deny having held the post of representative at KNIC’s Hamburg office from June 2008 to November 2013.
In addition, it must be pointed out that the fact that he ceased to hold the post of KNIC’s representative in Hamburg does not mean that he is not linked to the activities of KNIC ZD or of KNIC.
First, as is apparent from Annex 5 to the letter of 21 July 2016 submitted to the Court, Mr Sin Kyu-Nam acknowledges and confirms not only that he had a post within KNIC ZD but also that he subsequently held the post of director in the reinsurance department of KNIC. The veracity of the grounds underpinning the inclusion of his name on the lists in question cannot be called in question.
Second, Mr Sin Kyu-Nam indicates that he holds the post of director in the reinsurance department of KNIC, reinsurance being an activity which KNIC carries out in Europe.
Third, as is apparent from paragraphs 235 and 236 above, the individuals holding positions within KNIC may be regarded as being involved in the generation of foreign currency referred to in the grounds at issue with respect to KNIC ZD and KNIC.
Having regard to all of the foregoing, the grounds for listing Mr Sin Kyu-Nam are not, therefore, vitiated by an error of assessment.
As regards Mr Pak Chun-San, he was designated by the first set of contested measures because of his position as head of department of KNIC headquarters in Pyongyang and former authorised plenipotentiary representative of KNIC GmbH, acting on behalf of KNIC or at its direction.
Mr Pak Chun-San confirms that he worked at KNIC ZD from September 2005 until January 2009. He states that he continues to work at KNIC, but is not a representative of KNIC ZD. Furthermore, he is not ‘Head of Department of KNIC Headquarters in Pyongyang’, as the head of department is the managing director, whereas the applicant is only a director within that department.
It must be noted in that regard that it is apparent from the power of attorney of 8 August 2006 in Annex B.6 to the Commission’s defence that Mr Pak Chun-San was appointed as the chief representative of KNIC in Hamburg. It is also apparent from the documents in Annex B.8 to the Commission’s defence that Mr Pak Chun-San was empowered to represent KNIC ZD and that his signature was certified by notarial act of 11 July 2008 in Hamburg. In addition, in his witness statement of 10 September 2015, attached as Annex A.8 to the application, he does not deny having been the Chief Representative of KNIC ZD and KNIC itself in Germany from September 2005 until January 2009. In his 2015 witness statement, he also confirms that after returning from Germany, where he acted as a representative of ‘KNIC Germany’, he held an important managerial position at KNIC in Pyongyang. In a subsequent witness statement, he claims to have taken early retirement in December 2015, but does not substantiate his assertion with any documentary evidence.
Last, the fact that he ceased to hold the post of KNIC’s representative in Hamburg does not mean that he is not linked to the activities of KNIC ZD or of KNIC.
First, as is apparent from Annex A.8 to the application, Mr Pak Chun-San acknowledges and confirms not only that he had a post within KNIC ZD but also that he subsequently held an important managerial post in KNIC in Pyongyang. The veracity of the grounds underpinning the inclusion of his name on the lists in question cannot be called in question.
Second, Mr Pak Chun-San indicates in Annex 4 to the letter of 21 July 2016 submitted to the Court that he held a post in the reinsurance department of KNIC, reinsurance being an activity which KNIC carries out in Europe.
Third, as is apparent from paragraphs 235 and 236 above, the individuals holding positions within KNIC may be regarded as being involved in the generation of foreign currency referred to in the grounds at issue with respect to KNIC ZD and KNIC.
The grounds for the listing of Mr Pak Chun-San are not, therefore, vitiated by an error of assessment.
Last, in the case of Mr So Tong Myong, he was designated by the first set of contested measures because of his position as managing director of KNIC GmbH, acting on behalf of KNIC or at its direction.
Mr So Tong Myong states that he left KNIC in 2014 and no longer has any connection with that company. He claims never to have acted as managing director of KNIC ZD and that the allegation that he is ‘Managing Director of KNIC [ZD] Hamburg, acting on behalf of KNIC or at its direction’ is incorrect.
In that regard, it can be confirmed, on the basis of the documents submitted to the Court, that, between 1 October 2007 and May 2012, Mr So Tong Myong was mentioned in a number of documents as president of KNIC. That fact, which is not disputed by the person concerned, is also borne out by his witness statement, attached as Annex A.9 to the application, in which he states that his term as president of KNIC lasted from 2007 until October 2014.
Moreover, Mr So Tong Myong’s claim to have left KNIC in 2014 is contradicted by the excerpt from the commercial register of the Amtsgericht Hamburg (Local Court, Hamburg) dated 16 March 2016 produced by the Commission, which shows that the person concerned was still the serving president of KNIC on that date. Denials of the probative value of the register excerpt cannot be accepted since Mr So Tong Myong did not produce any evidence apart from his own witness statement.
As has previously been noted, in accordance with settled case-law, the activity of the Court of Justice and of the General Court is governed by the principle of the unfettered assessment of the evidence, and it is only the reliability of the evidence before the Court which is decisive when it comes to the assessment of its value. In addition, in order to assess the probative value of a document, regard should be had to the credibility 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 (see, to that effect, judgment of 27 September 2012, Shell Petroleum and Others v Commission,
T‑343/06
,
EU:T:2012:478
, paragraph
and the case-law cited).
It must be observed that the witness statement of Mr So Tong Myong was made specifically for the present action and that, originating as it does from a person subject to the restrictive measures at issue, the witness statement has little probative value.
This is particularly so where a witness statement is contradicted by a public document, submitted by the Commission, such as the excerpt from the Hamburg commercial register.
The grounds for the listing of Mr So Tong Myong are not, therefore, vitiated by an error of assessment.
In those circumstances, it must be held that the links, the positions held and the actions in question, as evident from the first set of grounds relating to the applicants in Case T‑533/15, have been demonstrated to the requisite legal standard and have not been contradicted in any detail by those applicants.
The present plea in law must therefore be rejected.
–
Third plea, alleging breach of data protection principles
By their third plea, the applicants in Case T‑533/15 rely, in essence, on infringement of Articles 4, 10, 14 and 16 of Regulation No 45/2001.
It should be pointed out that, while confining themselves to listing the provisions of Regulation No 45/2001 and passages from an opinion of the European Data Protection Supervisor, the applicants in Case T‑533/15 are claiming in essence that the Council and the Commission published incorrect data. In so doing the Council and the Commission had implied that the applicants in Case T‑533/15 were involved in unlawful activity connected with the unlawful development of weapons of mass destruction.
It is sufficient in that regard to find that, in the light of the examination of the second plea in the present action, the first set of grounds relating to the applicants in Case T‑533/15 is not vitiated by an error of assessment and, consequently, the Council and the Commission did not publish incorrect data implying the applicants’ involvement in unlawful activities.
The present plea cannot, therefore, succeed.
In any event, this plea is ineffective.
Even if the Council and the Commission had processed personal data concerning the applicants in Case T‑533/15 in a way that was inconsistent with Regulation No 45/2001, that could not lead to the annulment of the first set of contested measures. However, were the applicants in Case T‑533/15 to be in a position to prove that data were processed in that way, they could invoke an infringement of that regulation, in the context of an action for damages (see, to that effect, judgments of 30 November 2016, Rotenberg v Council,
T‑720/14
,
EU:T:2016:689
, paragraph
, and of 22 November 2017, HD v Parliament,
T‑652/16 P
, not published,
EU:T:2017:828
, paragraphs
and
).
In those circumstances, the present plea in law must be rejected as unfounded.
–
Fourth plea, alleging disproportionate breach of fundamental rights
By their fourth plea, the applicants in Case T‑533/15 claim that there has been a disproportionate restriction of their right to property and of their freedom to conduct a business within the meaning of Article 16 of the Charter of Fundamental Rights and also of the right to respect for their private and family life, their homes and their reputation, within the meaning of Article 8 of the ECHR.
According to the applicants in Case T‑533/15, the inclusion of their names in the lists in question serves no useful purpose, even if it were appropriate to list KNIC ZD itself. They do not cause KNIC ZD to generate any revenue or assist it in doing so. Apart from Mr Kang Song-Sam, those applicants do not represent KNIC ZD. In their submission, in those circumstances, there has been a manifestly disproportionate restriction of their liberty.
The Council and the Commission dispute those arguments.
In the first place, on the assumption that, by those very general arguments, the applicants in Case T‑533/15 are challenging the proportionality of the listing criteria in claiming that the entry of their names on the lists in question and the harm caused by the first set of contested measures is disproportionate to the aims of those measures, suffice it to note that the applicants in Case T‑533/15 did not put forward any plea of illegality, as provided for in Article 277 TFEU, in respect of the listing criteria.
However, the applicants in Case T‑533/15 cannot dispute the proportionality of the listing criteria without invoking their illegality by means of a plea of illegality under Article 277 TFEU (see, to that effect, judgments of 20 February 2013, Melli Bank v Council,
T‑492/10
,
EU:T:2013:80
, paragraphs
and
, and of 20 March 2013, Bank Saderat v Council,
T‑495/10
, not published,
EU:T:2013:142
, paragraphs
to
).
Moreover, and in any event, it must be pointed out that the arguments put forward by the applicants in Case T‑533/15 in connection with the present plea do not call in question the legality of the relevant listing criteria. Those arguments are based on the particular circumstances of these applicants, in that they were formulated by reference to their specific situation and are based on the alleged harm caused by the entry of their names on the lists in question and not on the lack of proportionality of those criteria as such.
In the second place, the applicants in Case T‑533/15 base their arguments on the fact that KNIC ZD does not generate any revenue for the Democratic People’s Republic of Korea and that they do not cause KNIC ZD to generate any revenue or assist it in doing so. In that regard, it should be noted that it is apparent from the examination of the second plea in the present action that the first set of grounds relating to the applicants in Case T‑533/15 arises from the fact that they were acting on behalf of or at the direction of KNIC and, therefore, is not vitiated by an error of assessment.
Accordingly, the present plea must be rejected as unfounded.
The action brought by the applicants in Case T‑533/15 with regard to the second set of contested measures and Decision 2016/849
By documents lodged at the Court Registry on 27 May and 3 June 2016, the applicants in Case T‑533/15 modified the application so as to include annulment of the second set of contested measures and Decision 2016/849, in so far those measures and that decision concern them.
In modifying the application to include the second set of contested measures, the applicants in Case T‑533/15 maintained the four pleas invoked with regard to the first set of contested measures and put forward additional arguments relating notably to the fact that the Council had, in the second set of contested measures, to some extent changed the grounds on which their listings were based. In modifying the application to include Decision 2016/849, the applicants in Case T‑533/15 maintained the four pleas previously invoked, without putting forward any additional arguments.
It should be noted that, by the second set of contested measures, the references and grounds relating to the applicants in Case T‑533/15 were slightly altered, without any changes being made to the listing criteria applicable. As regards Decision 2016/849, it should be noted that the listing criteria for natural persons were slightly altered, but that those changes in wording cannot affect the substance of the analysis. Furthermore, the listing grounds set out in Decision 2016/849 in relation to the applicants in Case T‑533/15 are, in essence, identical to those set out in the second set of contested measures.
In that context, the Court considers it appropriate, in the light of the minor differences between the grounds at issue, to examine together the action in so far as it is directed against the second set of contested measures, and the action in so far as it is directed against Decision 2016/849.
–
First plea, alleging breach of the obligation to state reasons
In the light of the changes to the grounds relating to the applicants in Case T‑533/15, those applicants maintain that the fact that KNIC GmbH was removed from the lists in question and that the reasons given for the inclusion of their names were amended in the second set of contested measures amounts to a tacit acknowledgement by the Council and the Commission that the designation of KNIC GmbH was wrong and that the reasons given for the designation of the individuals referred to in the first set of contested measures were inadequate. According to the applicants in Case T‑533/15, notwithstanding the amendment of the reasons, they remain unclear.
According to the applicants in Case T‑533/15, the second set of contested measures contains no information that would enable them to understand the basis on which they are alleged to be capable of influencing KNIC’s activities in generating substantial foreign currency revenue that could contribute to the weapons programmes of the Democratic People’s Republic of Korea.
The Council and the Commission dispute those arguments.
In the present case it must be noted that the second and third sets of grounds relating to the applicants in Case T‑533/15, set out in the second set of contested measures and in Decision 2016/846, fully satisfy the obligation to state reasons as interpreted by the case-law referred to above.
The second and third sets of grounds relating to the applicants in Case T‑533/15 satisfy the listing criteria and the amended listing criteria, and clearly and intelligibly identify the positions held by those individuals in KNIC ZD or in KNIC, as well as the activities in KNIC of which they are accused.
Moreover, neither the second nor the third set of grounds relating to the applicants in Case T‑533/15 refers incorrectly to KNIC GmbH. Consequently, the arguments of the applicants in Case T‑533/15 which refer both to the listing of KNIC GmbH and to the issue of the nature of the grounds relating to KNIC are ineffective. Finally, the name of Mr Kang Song-Sam is written correctly, contrary to his claim.
In those circumstances, it must be held that, on reading the grounds in the second set of contested measures and Decision 2016/849, the applicants in Case T‑533/15 were in a position to understand that their names were retained on the lists at issue because of the positions they held within KNIC, as is confirmed by the fact that, in the context of the second plea, they specifically challenge the merits of the Council’s reasoning in that respect. Furthermore, as the reasons for the Council’s choice were clearly stated in the second set of contested measures and in Decision 2016/849, the Court is in a position to assess whether those reasons are well founded.
Accordingly, the present plea must be rejected.
–
Second plea, alleging manifest error of assessment
The applicants in Case T‑533/15 claim that the reasons provided in the second set of contested measures are not sufficient for their names to be entered on the lists in question. In particular, Mr So Tong Myong claims to have left KNIC in 2014 and no longer to have any connection with that company. The assertion that he is ‘President’ of KNIC is incorrect. If the intention was to designate him on the basis of a former role, it would be incumbent on the Council to explain why his designation is still appropriate and warranted.
Furthermore, according to the applicants in Case T‑533/15, the reasons given in their case amount to nothing more — save in the case of Mr So Tong Myong — than a statement that those individuals work for KNIC. That is not sufficient in the light of Article 13(1)(b) or Article 15(1)(b) of Decision 2013/183. It was incumbent on the Council to establish by clear and precise evidence that each of those individuals was in a position to influence KNIC in the conduct of its activities, which would have justified the entry of their names on the lists in question.
In reply to the arguments that Mr So Tong Myong and Mr Pak Chun-San have retired and no longer hold any positions in KNIC, in the former case even before the first set of contested measures was adopted, and in the latter case after those measures were adopted, the Council observes that those arguments are contradicted by the information in its possession concerning the applicants in Case T‑533/15, which was disclosed to them (see Annexes B.1, B.2, B.3 and B.4 to the defence). In addition, according to the Council, the mere fact that those individuals claim to have retired does not mean that that is actually the case. Finally, even if they have formally retired, that does not mean that they can no longer act on behalf of KNIC, whose headquarters is in North Korea.
As regards Mr Kim Il-Su, Mr Kang Song-Sam, Mr Choe Chun-Sik and Mr Sin Kyu-Nam, the Council emphasises that, according to the information on which their initial listing was based and which can be found in Annexes B.1, B.2, B.3 and B.4 to the defence, those applicants were not listed solely because they were employed by KNIC but because they acted on behalf of KNIC or at its direction.
According to the Commission, the fact that certain individuals, who are shown to have held significant positions within the only insurance company in North Korea, claim to have taken retirement, whether early retirement or not, following the sanctions imposed, without adducing the slightest evidence, does not suffice to contradict the assumption that they act on behalf or at the direction of KNIC. The Commission disputes the veracity of the assertions relating to the retirement of Mr So Tong Myong and the departure of Mr Pak Chun-San.
In conclusion, according to the Commission, the applicants in Case T‑533/15 have, through their own witness statements, substantiated the reasons for their listing.
In the first place, as regards the claims relating to the inadequacy of the evidence regarding the positions held within KNIC, it must be held that the relevant information submitted by the Council constitutes proof that the second and third sets of grounds relating to the applicants in Case T‑533/15 are substantiated. In particular, Annex B.3 contains a detailed description of the positions held within KNIC by the applicants in Case T‑533/15. The Commission also submitted official certificates to the Court, including letters of appointment. The latter documents relate for the most part to the period before the adoption of the second set of contested measures.
Thus, as regards Mr Kim Il-Su, he is identified by the second and third sets of grounds relating to the applicants in Case T‑533/15 as a manager in the reinsurance department of KNIC based in the headquarters in Pyongyang and former authorised chief representative of KNIC in Hamburg, acting on behalf of KNIC or at its direction.
It should be borne in mind in that regard that it is evident from the assessment of the legality of the first set of contested measures that the reasons for listing Mr Kim Il-Su in those measures, namely his position as authorised plenipotentiary representative of EU-designated KNIC in Hamburg, acting on behalf of KNIC or at its direction, were not vitiated by an error. In addition, in his witness statement, attached as Annex A.4 to the application and as Annex 9 to the letter of 21 July 2016, he does not deny having taken up in 2009 the position of representative previously held by Mr Pak Chun-San, or having held it from January 2009 until January 2015; on the contrary, he confirms this. Last, that fact is also confirmed by the excerpt from the commercial register dated 16 March 2016 submitted by the Commission in Annex F.1 to its observations on the statement of modification, from which it is apparent that Mr Kim Il-Su was shown in that register to be the person authorised to represent KNIC ZD. The contentions relating to that excerpt cannot be accepted, since they arise from and are based on the witness statement of Mr Kim Il-Su alone.
Furthermore, in his witness statement in Annex 8 to the letter of 21 July 2016, Mr Kim Il-Su confirms that he held the position of manager in the reinsurance department of KNIC after his return from Germany.
Last, the fact that Mr Kim Il-Su may have ceased to hold the post of KNIC’s representative in Hamburg would not mean that he is not linked to the activities of KNIC ZD.
First, it is apparent from the preceding paragraphs not only that Mr Kim Il-Su held a post within KNIC ZD, but also that he subsequently held an important managerial post in the reinsurance department of KNIC in Pyongyang, reinsurance being an activity that KNIC carries out in Europe. The veracity of the grounds underpinning the inclusion of his name on the lists in question cannot be called in question.
Second, as is apparent from paragraphs 235 and 236 above, the individuals holding positions within KNIC may be regarded as being involved in the generation of foreign currency referred to in the grounds at issue with respect to KNIC ZD and KNIC.
The grounds for the listing of Mr Kim Il-Su’s name are not, therefore, vitiated by an error of assessment.
As regards Mr Kang Song-Sam, he was identified in the second set of contested measures as a former authorised representative of KNIC in Hamburg, continuing to act for or on behalf of KNIC or at its direction.
It must be borne in mind in that regard that it is evident from the assessment of the legality of the first set of contested measures that the reasons for listing Mr Kang Song-Sam in those measures, namely his position as authorised plenipotentiary representative of the EU-designated entity KNIC in Hamburg, acting on behalf of KNIC or at its direction, were not vitiated by an error. Accordingly, the entry of his name on the lists in question on the ground that he is a former authorised representative of KNIC in Hamburg cannot be called in question.
In addition, the information in the witness statements produced by Mr Kang Song-Sam for the purposes of the judicial proceedings does not contradict those grounds. As he indicates in his witness statement in Annex A.5 to the application, he is ‘currently employed as the Representative of [KNIC’s] branch office in Hamburg, Germany’. He has been in that post since December 2013 and took over from Mr Sin Kyu-Nam. Furthermore, in his witness statement in Annex 7 to the letter of 21 July 2016 submitted to the Court, Mr Kang Song-Sam confirms that he holds the position of manager in the reinsurance department. The grounds for his listing are not, therefore, vitiated by an error of assessment.
As regards Mr Choe Chun-Sik, he was identified as a director in the reinsurance department of KNIC based in the headquarters in Pyongyang, acting on behalf of KNIC or at its direction.
It must be noted that, in successive modified versions of the application dated 27 May and 3 June 2016, Mr Choe Chun-Sik contends that he has never been a representative of KNIC ZD, that he was supposed to start working for that company in February 2015 but his visa application was refused, and that the allegation that he is an authorised plenipotentiary representative of the EU-designated entity KNIC ZD, acting on behalf of KNIC or at its direction, is incorrect. However, those arguments cannot call in question the reason for listing Mr Choe Chun-Sik, namely the fact that he is a director in the reinsurance department of KNIC based in the headquarters in Pyongyang, acting on behalf of KNIC or at its direction.
In addition, Mr Choe Chun-Sik himself confirms that he has been linked to KNIC. Thus, he acknowledges in his witness statement, attached as Annex A.6 to the application, that in January 2015 KNIC asked him to become its chief representative at its office in Hamburg, to replace the previous representative, Mr Kim Il-Su. It is clear from all the witness statements of Mr Choe Chun-Sik that he is a director in the reinsurance department of KNIC in Pyongyang. The grounds for his listing are not, therefore, vitiated by an error of assessment.
As regards Mr Sin Kyu-Nam, he was identified as a director in the reinsurance department of KNIC based in the headquarters in Pyongyang and former authorised representative of KNIC in Hamburg, acting on behalf of KNIC or at its direction.
It should be borne in mind in that regard that it is evident from the assessment of the legality of the first set of contested measures that the reasons for listing Mr Sin Kyu-Nam in those measures, namely his position as head of department of KNIC headquarters in Pyongyang and former authorised plenipotentiary representative of KNIC in Hamburg and the fact that he acted on behalf of KNIC and at its direction, were not vitiated by an error. Accordingly, the entry of his name on the lists in question on the ground that he is a former authorised representative of KNIC in Hamburg, acting on behalf of KNIC or at its direction, cannot be called in question.
As is apparent from the statement of modification of the form of order sought dated 27 May 2016, Mr Sin Kyu-Nam does not dispute having worked at KNIC ZD from June 2008 to November 2013, and then having worked at KNIC’s headquarters in Pyongyang.
It must, moreover, be noted that those facts are confirmed by Mr Sin Kyu-Nam. Thus, he declares in his witness statement, attached as Annex A.7 to the application, that he held the position of representative at KNIC’s office in Hamburg from June 2008 to November 2013. Furthermore, as is apparent from Annex 5 to the letter of 21 July 2016 submitted to the Court, Mr Sin Kyu-Nam acknowledges and confirms not only that he had that post within KNIC ZD, but also that he subsequently held the post of director in the reinsurance department of KNIC. The grounds for his listing are not, therefore, vitiated by an error of assessment.
As regards Mr Pak Chun-San, he was identified as a director in the reinsurance department of KNIC based in the headquarters in Pyongyang at least until December 2015, and former authorised chief representative of KNIC in Hamburg, continuing to act for or on behalf of KNIC or at its direction.
First of all, it must be observed in that regard that it is evident from the assessment of the legality of the first set of contested measures set out in paragraphs 248 to 252 above that the reasons for listing Mr Pak Chun-San’s name in those measures, namely his position as head of department of KNIC headquarters in Pyongyang and former authorised plenipotentiary representative of the EU-designated entity KNIC in Hamburg, acting on behalf of KNIC or at its direction, were not vitiated by an error.
Second, it must be pointed out that Mr Pak Chun-San merely states that he is not ‘Head of Department of KNIC headquarters in Pyongyang’ and does not dispute having worked at the headquarters in Pyongyang at least until December 2015.
Third, it should be emphasised that Mr Pak Chun-San’s assertion that he left his position before the adoption of the second set of contested measures and Decision 2016/849 is not based on any documentary proof, even though the applicant is in the best position to produce evidence that would call in question the reasons for his listing.
However, in the present case, it cannot be regarded as established that Mr Pak Chun-San no longer works at KNIC solely on the basis of witness statements that were made specifically for the present action and originated from the person subject to the restrictive measures in question.
In addition, Mr Pak Chun-San has maintained substantial links with KNIC over many years. It is apparent from the case file that KNIC regularly called on Mr Pak Chun-San to hold key posts and that he has had a long career with that company during which he has simultaneously had a number of important functions as director in the reinsurance department of KNIC and former chief representative of KNIC in Hamburg.
In the light of those points, it cannot be regarded as established, in the absence of any evidence, that he no longer has any links with KNIC.
The grounds for his listing are not, therefore, vitiated by an error of assessment.
As regards Mr So Tong Myong, he was identified as president of KNIC, acting on behalf of KNIC or at its direction.
In that regard, it is apparent from the documents submitted to the Court that, between 1 October 2007 and May 2012, Mr So Tong Myong was referred to as president of KNIC. That was borne out by his witness statement, attached as Annex A.9 to the application, in which he states that his term as president of KNIC lasted from 2007 until October 2014.
As regards the arguments set out by Mr So Tong Myong who confirms that he retired in October 2014, it must be noted that the Commission produced an excerpt from the commercial register of the Amtsgericht Hamburg (Local Court, Hamburg) dated 16 March 2016, which shows that he was still in office as president of KNIC at that date.
It is true that, in Annex 2 to the letter of 21 July 2016 submitted to the Court, Mr So Tong Myong states that that information was correct only between 2010 and 2014, the year in which he took retirement.
However, as has previously been noted, the activity of the Court of Justice and of the General Court is governed by the principle of the unfettered assessment of the evidence, and it is only the reliability of the evidence before the Court which is decisive when it comes to the assessment of its value. In addition, in order to assess the probative value of a document, regard should be had to the credibility 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 (see, to that effect, judgment of 27 September 2012, Shell Petroleum and Others v Commission,
T‑343/06
,
EU:T:2012:478
, paragraph
and the case-law cited).
It must be observed that the witness statement of Mr So Tong Myong was made specifically for the present action and that, originating as it does from a person subject to the restrictive measures at issue, that witness statement has little probative value, unlike a public document such as an excerpt from the commercial register.
Given the lack of documentary proof from Mr So Tong Myong and his position as president of KNIC, it cannot be regarded as established that he no longer has any connection with KNIC and that he is not acting for or on behalf of KNIC or at its direction.
The grounds for his listing are not, therefore, vitiated by an error of assessment.
In the light of the foregoing, the Council and the Commission were properly able to conclude, at the time of the adoption of the second set of contested measures and of Decision 2016/849, that the applicants in Case T‑533/15 were still acting on behalf of KNIC or at its direction.
In the second place, as regards the argument of the applicants in Case T‑533/15 concerning the lack of proof of their ability to influence the activities of KNIC, it is sufficient to note that they fall within a listing criterion covering ‘persons or entities acting on their behalf or at their direction’ within the meaning of Article 15(1)(b)(ii) of Decision 2013/183 and Article 27(1)(b) of Decision 2016/849.
In the light of the listing criteria and the amended listing criteria, the legality of which has not been called in question by the applicants in Case T‑533/15, those applicants fall within the category of persons acting on behalf or at the direction of the designated entity that may be involved in generating money that could contribute to the nuclear proliferation-related activities of the Democratic People’s Republic of Korea.
In those circumstances, that criterion does not necessarily require the applicants in Case T‑533/15 to be the individuals deciding on the transfer of financial assets that could contribute to the nuclear proliferation-related activities of the Democratic People’s Republic of Korea, or to be in a position to influence such a transfer. They must, however, have a link to the activity referred to in the grounds at issue read in the light of the relevant criteria, namely the generation of foreign currency revenue which could contribute to the nuclear programmes of the Democratic People’s Republic of Korea.
The Court has already held that a person exercising functions which confer on him the power to manage an entity covered by restrictive measures may, as a general rule, himself be considered to be involved in the activities that justified the adoption of the restrictive measures covering the entity in question (see, to that effect, judgments of 12 December 2013, Nabipour and Others v Council,
T‑58/12
, not published,
EU:T:2013:640
, paragraph
, and of 5 November 2014, Mayaleh v Council,
T‑307/12 and T‑408/13
,
EU:T:2014:926
, paragraph
).
As regards the argument of the applicants in Case T‑533/15 based on the judgment of 12 December 2013, Nabipour and Others v Council (
T‑58/12
, not published,
EU:T:2013:640
), it must be noted that, unlike the relevant provisions in the present case, in the judgment of 12 December 2013, Nabipour and Others v Council (
T‑58/12
, not published,
EU:T:2013:640
), the applicant’s listing was based on criteria that differ from those at issue here. Although, in that judgment, the natural persons subject to the restrictive measures had to have a link with nuclear proliferation activities, in the present case, the natural persons subject to the restrictive measures must simply maintain a link with the activity of providing financial services or transfers of funds, assets or resources that could contribute to the nuclear programmes of the Democratic People’s Republic of Korea, and it is not necessary for those persons to be specifically linked to nuclear proliferation activities.
Thus, in the present case, neither the criteria nor the grounds at issue underpinning the listing of the names of the applicants in Case T‑533/15 require that a link between the person concerned and the entity engaged in the field of nuclear proliferation be established; they do, however, require that a link be established between the person concerned and the entity which provides or ensures the transfer of financial assets that could contribute to the programmes of the Democratic People’s Republic of Korea that are related to nuclear proliferation.
In this instance, the applicants in Case T‑533/15 all performed managerial functions within KNIC, as is apparent from paragraphs 298 to 331 above. Mr Kim Il-Su is a manager in the reinsurance department of KNIC and former authorised chief representative of KNIC in Hamburg. Mr Kang Song-Sam is the former authorised representative of KNIC in Hamburg and holds the position of manager in the reinsurance department of KNIC. Mr Choe Chun-Sik is a director in the reinsurance department of KNIC. Mr Sin Kyu-Nam is a director in the reinsurance department of KNIC and former authorised representative of KNIC in Hamburg. Mr Pak Chun-San was a director in the reinsurance department of KNIC and the former chief representative of KNIC in Hamburg. Mr So Tong Myong was the president of KNIC. Accordingly, it must be held that their respective roles in KNIC’s reinsurance business, as manager in KNIC’s reinsurance department, director of that department or president of KNIC, are sufficient for the conclusion to be drawn that they have a link with KNIC’s activity of generating foreign currency, acting on behalf of KNIC or at its direction, and, moreover, that, beyond verifying the accuracy of the second and third sets of grounds relating to the applicants in Case T‑533/15, it is not necessary to rely on the evidence concerning their individual actions for the purpose of establishing that they were designated in accordance with the listing criteria adopted.
In those circumstances, the present plea must be rejected in its entirety.
–
Third plea, alleging breach of data protection principles
By their third plea, the applicants in Case T‑533/15 claim, in essence, that Articles 4, 10, 14 and 16 of Regulation No 45/2001 have been infringed.
It should be pointed out that, while confining themselves to listing the provisions of Regulation No 45/2001 and passages from an opinion of the European Data Protection Supervisor, the applicants in Case T‑533/15 are claiming in essence that the Council and the Commission published incorrect data. In so doing the Council and the Commission had implied that the applicants in Case T‑533/15 were involved in unlawful activity connected with the unlawful development of weapons of mass destruction.
It is sufficient in that regard to find that, in the light of the examination of the second plea in the present action, the second and third sets of grounds relating to the applicants in Case T‑533/15 are not vitiated by an error of assessment and, consequently, the Council and the Commission did not publish incorrect data implying the applicants’ involvement in unlawful activities.
The present plea cannot, therefore, succeed.
In any event, this plea is ineffective.
Even if the Council and the Commission had processed personal data concerning the applicants in a way that was inconsistent with Regulation No 45/2001, that could not lead to the annulment of the second set of contested measures and Decision 2016/849. However, were the applicants to be in a position to prove that data were processed in that way, they could invoke an infringement of that regulation, in the context of an action for damages (see, to that effect, judgments of 30 November 2016, Rotenberg v Council,
T‑720/14
,
EU:T:2016:689
, paragraph
, and of 22 November 2017, HD v Parliament,
T‑652/16 P
, not published,
EU:T:2017:828
, paragraphs
and
).
–
Fourth plea, alleging disproportionate breach of fundamental rights
In setting out the arguments put forward in respect of the first set of contested measures, the applicants in Case T‑533/15 add that the harm caused by the second set of contested measures is wholly disproportionate.
The applicants in Case T‑533/15 maintain that they do not cause KNIC ZD to generate revenue or assist it in doing so, since it generates no revenue, neither now nor when it was operational. Furthermore, it is submitted that two of those applicants, Mr Pak Chun-San and Mr So Tong Myong, are retired and do not work for KNIC, while the other four applicants do not generate revenue in their various roles within KNIC. The inclusion of their names on the lists at issue serves no useful purpose, even if it were appropriate to list KNIC ZD itself. In their submission, in those circumstances, there has been a manifestly disproportionate restriction of their liberty.
The Council and the Commission dispute those arguments.
Since the present plea is based on arguments that are virtually identical to those set out by the applicants in Case T‑533/15 in connection with the fourth plea put forward in respect of the first set of contested measures, it must, in the light of the arguments in paragraphs 274 to 277 above, be rejected.
Having regard to all of the foregoing, the action in Case T‑533/15 must be dismissed in so far as it seeks annulment of the second set of contested measures and Decision 2016/849.
Consequently, the Court must, in Case T‑533/15, dismiss the action in its entirety.
Costs
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 applicants in Case T‑533/15 have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Council and the Commission.
In Case T‑264/16, since KNIC has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Council and the Commission.
Under Article 138(1) of the Rules of Procedure, Member States which intervene in the proceedings are to bear their own costs. The United Kingdom must be ordered to bear its own costs in Case T‑533/15.

On those grounds,
THE GENERAL COURT (Third Chamber),
hereby:

1.
Dismisses the actions;

2.
In Case T‑533/15, orders Mr Kim Il-Su and the other applicants whose names appear in the annex to pay the costs, with the exception of those incurred by the United Kingdom of Great Britain and Northern Ireland;

3.
In Case T‑264/16, orders Korea National Insurance Corporation to pay the costs;

4.
In Case T‑533/15, orders the United Kingdom to bear its own costs.

Frimodt Nielsen
Kreuschitz
Półtorak
Delivered in open court in Luxembourg on 14 March 2018.
E. Coulon
Registrar
S. Frimodt Nielsen
President
Table of contents

Background to the dispute

Restrictive measures adopted against the Democratic People’s Republic of Korea

Restrictive measures adopted against the applicants

Procedure and forms of order sought

Law

On the procedural consequences of the repeal and replacement of Decision 2013/183

The order in which Cases T‑533/15 and T‑264/16 are to be dealt with

The action in Case T‑264/16

First plea, alleging breach of the obligation to state reasons

Second plea, alleging manifest error of assessment

Third plea, alleging breach of data protection principles

Fourth plea, alleging disproportionate restriction of fundamental rights

The action in Case T‑533/15

The action brought by the applicants in Case T‑533/15 with regard to the first set of contested measures

– First plea, alleging breach of the obligation to state reasons

– Second plea, alleging manifest error of assessment

– Third plea, alleging breach of data protection principles

– Fourth plea, alleging disproportionate breach of fundamental rights

The action brought by the applicants in Case T‑533/15 with regard to the second set of contested measures and Decision 2016/849

– First plea, alleging breach of the obligation to state reasons

– Second plea, alleging manifest error of assessment

– Third plea, alleging breach of data protection principles

– Fourth plea, alleging disproportionate breach of fundamental rights

Costs
(
*1
)	Language of the case: English.
(
)	The list of the other applicants is annexed only to the version notified to the parties.