Information;Judgment — ECLI:EU:T:2024:632
Date: 2024-09-18
Language of the case: English
Court formation: Fourth Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for annulment - unfounded

summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern the question whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, is substantiated (judgment of 13 September 2023, Synesis v Council, T‑97/21 and T‑215/22, not published, EU:T:2023:531, paragraph 35). 67 That is because it is the task of the competent EU authority to establish, in the event of challenge, that the reasons relied on against the person or entity concerned are well founded, and not the task of that person or entity to adduce evidence of the negative, namely that those reasons are not well founded (see judgment of 13 September 2023, Synesis v Council, T‑97/21 and T‑215/22, not published, EU:T:2023:531, paragraph 37 and the case-law cited). 68 If the competent EU authority provides relevant information or evidence, the Courts of the European Union must then determine whether the facts alleged are made out in the light of that information or evidence and assess the probative value of that information or evidence in the circumstances of the particular case and in the light of any observations submitted in relation to them by, among others, the person or entity concerned (see judgment of 13 September 2023, Synesis v Council, T‑97/21 and T‑215/22, not published, EU:T:2023:531, paragraph 38 and the case-law cited). 69 It should be recalled that the inclusion of the applicant’s name on the lists at issue has been justified by the reasons set out in paragraph 10 above. It is therefore necessary to examine, as a first step, whether the facts put forward in the statement of reasons for the applicant’s listing are established and, as a second step, whether they fall within the scope of Article 4(1)(b) of Decision 2012/642. 70 In the first place, first, the applicant disputes the fact put forward by the Council that it is the exporting arm of Belaruskali, and submits that all the information relating to Belaruskali, which is a separate legal entity, should be disregarded. Moreover, the applicant states that the fact that ‘Belaruskali is one of the largest sources of revenue for the [Lukashenko] regime’ is irrelevant. 71 It is apparent from the information before the Court that, in the market for potassium fertilisers in Belarus, Belaruskali is a public establishment which has a monopoly in that it is the sole producer of potassium fertilisers in Belarus and one of the largest such producers in the world. In 2019, Belaruskali generated a turnover of 2.3 billion United States dollars (USD) (approximately EUR 2.15 billion). 72 Therefore, Belaruskali is one of the largest sources of revenue for the Lukashenko regime, which, moreover, is not disputed by the applicant. 73 The items of evidence on which the Council relied show that Belaruskali holds 48% of the applicant’s shares. ‘Belarusian Railways’, a State association under the supervision of the Ministry of Transport and Communications, owns 42% of the applicant’s shares. 74 It follows therefrom that, although the applicant and Belaruskali are separate entities, the links between them are well established. 75 It is also apparent from the information before the Court that sales to other countries of potassium fertilisers produced by Belaruskali are made through the applicant, which is even referred to as the ‘State trader’s intermediary’ in a video of 3 January 2022 published on the website ‘belsat.eu’. In that regard, the applicant is presented, in an article from the magazine Forbes dated 2 October 2020, as ‘one of the largest suppliers of mineral fertilisers in the world’, while it was described as a ‘State-owned company’ by its former CEO, in Belarus Today on 22 July 2020, and has also been described as one of the ‘Belarusian economy’s flagships’. 76 Moreover, the applicant does not claim to export products other than potassium fertilisers coming from Belaruskali. The applicant’s activities are therefore directly dependent on Belaruskali. 77 Accordingly, the Council did not err in considering that the applicant is an ‘exporting arm’ of Belaruskali. 78 Second, as regards the fact put forward by the Council that ‘supplies from the [applicant] account for 20% of global potash exports’, the applicant maintains that that statement simply describes its activities. However, the mere fact that it has a large share of the global market is not sufficient to demonstrate that it supports or benefits from the regime. Moreover, according to the applicant, its exports have decreased considerably. 79 In that connection, it should be noted that the Council produced an item of evidence in which the applicant’s CEO stated that, in 2019, it exported 21.3% of the world’s potash production. 80 The applicant claims that its export volumes had decreased even before the adoption of the initial acts and no longer accounted for 20% of all global potash exports. However, by merely mentioning the extent to which potash exports had decreased during the first seven months of 2022 compared with the first seven months of 2021 in a number of specific destinations, the applicant has not stated what its share was on the global market for exports of potassium fertilisers on the date of adoption of the initial acts. 81 Third, the applicant disputes the Council’s factual allegation that the State guarantees its monopoly rights for the export of potassium fertilisers. The monopoly enjoyed by the applicant ended in March 2022. The applicant adds that, at present, at least three companies are licensed to export potash. 82 In that regard, it should be recalled that Presidential Decrees No 398 of 2005 and No 399 of 2013, confirming the existence of that monopoly, were produced by the Council in Annexes B.4 and B.5 to the defence. The applicant argues that, in order to justify the inclusion of a person on a sanctions list, the Council is not entitled to rely on documents which it did not take into consideration when adopting the initial acts. However, that argument does not call into question the existence of such a monopoly until March 2022. 83 In addition, it is apparent from the evidence produced by the applicant that, since March 2022, entities wishing to obtain a licence to export potassium fertilisers must initiate a procedure before the Ministry of Anti-monopoly Regulation and Trade. The applicant was one of the first two undertakings, together with Belaruskali, to obtain such a licence. That demonstrates preferential treatment on the part of the Belarusian State with regard to the applicant. 84 Fourth, the applicant disputes the Council’s factual allegation that it received preferential treatment from the Belarusian authorities. The applicant maintains that the revenue obtained by it is not the subject of any preferential treatment and in any case is very low. 85 However, that fact is confirmed by the very existence, until March 2022, of the applicant’s monopoly as regards the export of potassium fertilisers. The applicant exports products to more than 100 countries and, between January and July 2020 alone, exports of potassium fertilisers from Belarus stood at USD 1.4 billion (approximately EUR 1.3 billion). 86 Thus, the facts taken into account by the Council in order to include the applicant on the lists at issue must be regarded as having been established. 87 In the second place, the applicant claims that the factors set out above do not amount to the act of ‘benefiting from’ the regime or to ‘support for the regime’ within the meaning of Article 4(1)(b) of Decision 2012/642. 88 In accordance with the case-law cited in paragraph 50 above, the meaning and scope of the terms in question must be determined by considering their usual meaning in everyday language, while also taking into account, in particular, the purposes of the rules of which they are part and the need to preserve the effectiveness of their clear and precise wording. 89 As a preliminary point, it should be observed that it is apparent both from the clear and precise wording of Article 4(1)(b) of Decision 2012/642, which refers to persons and entities ‘benefiting from or supporting the [Lukashenko] regime’, and from the objective pursued by that provision, which is to increase pressure on that regime, that it is the relationship that certain persons and entities have with that regime which justifies the adoption of restrictive measures, where that relationship takes the form of support, in particular financial support (see, to that effect, judgment of 18 October 2023, MAZ-upravljajusaja kompanija holdinga Belavtomaz v Council, T‑532/21, not published, EU:T:2023:656, paragraph 65). 90 First, as regards ‘support for the regime’, it should be noted that the potash sector, in addition to being highly regulated in Belarus, is one of the strategic sectors of the Belarusian economy which also plays a role in the Lukashenko regime’s foreign policy. 91 As is clear from paragraph 71 above, Belarus is one of the world’s largest producers of potassium fertilisers and, consequently, that business sector generates billions of dollars in gross sales every year. However, such significant sales are achievable mainly as a result of exports. 92 The Council was therefore right to consider that the applicant’s activities, consisting of the export of potassium fertilisers, provide a means for the regime to secure high levels of revenue and international currency. 93 That assertion is borne out by the material in the file submitted by the Council to support the grounds for including the applicant on the lists at issue. The applicant is described as ‘financ[ing] the regime’ in an article published in Farm Journal on 30 July 2013. Furthermore, it is apparent from a report of 26 August 2020 published on the website ‘Fitch ratings’ that potassium exports are an important source of foreign currency revenue for Belarus. 94 According to an article dated 21 March 2022 published on the website ‘politring.com’, President Lukashenko stressed that the main task of the applicant’s new CEO was to find ways to trade, including trade with the European Union, because ‘business is business’ and ‘work on the potash market will be akin to trading in weapons and other special equipment. Everything should be quiet, calm’. The applicant’s new CEO confirmed that approach, stating that, despite the sanctions, he still expected to trade with the European Union and that trade should be as discreet as the arms trade, according to an article published on the website ‘euronews.com’ on 22 March 2022. 95 Furthermore, it should be borne in mind that 90% of the applicant’s shares are held by public entities, namely 48% by Belaruskali, a State-owned undertaking, and 42% by Belarusian Railways. This means that the applicant may pay dividends to those public entities, through which the funds from those dividends are transferred to the State. Since the criterion of support for the Lukashenko regime covers, in particular, persons and entities financially supporting it, those payments constitute a form of financial support (see, to that effect, judgment of 18 October 2023, MAZ-upravljajusaja kompanija holdinga Belavtomaz v Council, T‑532/21, not published, EU:T:2023:656, paragraph 69). 96 The same conclusion must apply to financial support for the regime in the form of financial revenue. 97 Contrary to the applicant’s claims, in order to establish that the applicant supports the Lukashenko regime, the Council did not rely solely on the fact that it complied with its obligation to pay tax, but also took into consideration its links with Belaruskali in the light of its export volumes resulting from those links, which means that the applicant’s support for the regime takes the form of high levels of revenue and international currency as well as dividends (see paragraph 92 above). 98 In that regard, the applicant argues, in essence, that no information relating to Belaruskali should be taken into account in the present case, since Belaruskali is a separate entity from the applicant, with which it has only a purely contractual relationship. 99 However, in this instance, it is clear from paragraph 77 above that the fact taken into account by the Council that the applicant is an ‘exporting arm’ of Belaruskali has been established. Accordingly, the applicant makes it possible for Belaruskali to export potassium fertilisers outside Belarus and thus enables it to increase revenue and foreign currency for the State. 100 Moreover, as the Council rightly points out, since Belaruskali generated a turnover of USD 2.3 billion (approximately EUR 2.15 billion) in 2019, it was bound to pay a significant amount of tax to the Belarusian State, beyond the statutory obligation applicable to all Belarusian taxpayers. Such financial flows would not be possible without the applicant’s activities, which consist of exporting fertilisers produced by Belaruskali outside Belarus. 101 Thus, as the ‘exporting arm’ of Belaruskali, the applicant’s activities are closely linked to Belaruskali, and the Council could legitimately refer to the role played by Belaruskali in the global market for potassium fertilisers in order to establish that the applicant supports the Lukashenko regime. 102 Moreover, although Belaruskali’s funds were frozen, there is a not insignificant danger that that company may exert pressure on its ‘exporting arm’, namely the applicant, in order to circumvent the effect of the measures applying to it, so that the freezing of the funds of those entities is necessary and appropriate in order to ensure the effectiveness of the measures adopted and to ensure that those measures are not circumvented (see, to that effect and by analogy, judgments of 13 March 2012, Melli Bank v Council, C‑380/09 P, EU:C:2012:137, paragraph 58, and of 22 September 2016, NIOC and Others v Council, C‑595/15 P, not published, EU:C:2016:721, paragraph 89). 103 Second, as regards the act of ‘benefiting’ from the Lukashenko regime, it is common ground that, since 2013, the applicant has held the exclusive right – granted by the Belarusian State – to engage in foreign trade in potassium-based mineral or chemical fertilisers. The applicant does not, moreover, dispute that fact and simply asserts that that monopoly ceased to exist before the adoption of the initial acts, that is to say, in March 2022. 104 The mere existence of a monopoly on a market as important, from the perspective of the Belarusian economy as a whole, as the market for potassium fertilisers and for the export thereof is sufficient to conclude, as the Council did, that an undertaking benefits from the regime. Furthermore, as is clear from paragraph 83, even after March 2022, when the applicant’s monopoly in that field expired, the applicant continues to receive preferential treatment from the Belarusian State. 105 It follows from the foregoing that the Council did not err in finding that the position occupied by the applicant in the Belarusian economy and the fact that it represented a source of revenue for the Lukashenko regime were sufficient for it to be considered that the applicant benefited from and supported that regime within the meaning of Article 4(1)(b) of Decision 2012/642. 106 Therefore, the third plea must be rejected. The fourth plea, alleging infringement of the principle of proportionality 107 The applicant claims that the initial acts have dramatic consequences that will reverberate not only within the European Union, but also throughout the world. Thus, the restrictive measures imposed on the applicant are clearly disproportionate in view of the extremely negative impact on third countries, on Belarus and on the applicant. 108 The Council, supported by the Republic of Latvia, disputes that line of argument. 109 It should be recalled, first of all, that the principle of proportionality is one of the general principles of EU law and requires that measures implemented through provisions of EU law be appropriate for attaining the legitimate objectives pursued by the legislation at issue and must not go beyond what is necessary to achieve them (see judgment of 13 March 2012, Melli Bank v Council, C‑380/09 P, EU:C:2012:137, paragraph 52 and the case-law cited). 110 The case-law makes clear in that respect that, with regard to judicial review of compliance with the principle of proportionality, the EU legislature must be allowed a broad discretion in areas such as the common foreign and security policy (CFSP), which involve political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Therefore, the legality of a measure adopted in those areas can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue (see judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 146 and the case-law cited). 111 In the present case, it should be noted that the applicant maintains that the initial acts infringe the principle of proportionality in that they have an extremely negative impact not only on its interests, but also on Belarus and on third countries. However, it merely raises that argument, without referring to any specific evidence to support such a position. The applicant has therefore not adduced any factual evidence in support of its claims. 112 Therefore, the fourth plea must be rejected. 113 In the light of all the foregoing considerations, the application for partial annulment of the initial acts must be dismissed. The application for partial annulment of the maintaining acts 114 By a statement of modification, the applicant seeks, pursuant to Article 86 of the Rules of Procedure of the General Court, annulment of the maintaining acts in so far as they concern it, reiterating the pleas in law and arguments raised in the application against the initial acts. 115 The Council is of the view that it has already demonstrated in the defence and the rejoinder that the applicant supported and benefited from the Lukashenko regime, and contends that the evidence available to it justifies maintaining the applicant’s name on the lists at issue. 116 In the context of the first plea, alleging infringement of the principle of legality of the maintaining acts, the applicant has failed to submit any arguments in addition to those put forward against the initial acts. 117 Consequently, since the first plea has already been rejected, above, in the context of the examination of the lawfulness of the initial acts (see paragraph 62 above), it must be rejected on the same grounds in so far as it is directed at the maintaining acts. 118 In the context of the second plea, alleging infringement of the right to effective judicial protection and of the obligation to state reasons, the applicant puts forward a fresh argument relating to the obligation of judicial protection, consisting of the obligation to carry out a periodic review of the initial acts. In essence, the applicant claims that, when deciding to maintain the name of an entity on a list, the Council must examine not only the initial reasons for including the entity on the lists at issue, but also the observations and evidence submitted by the applicant. 119 In the context of fourth plea, which must be examined together with the second plea, the applicant claims that, since the Council failed to carry out, in the present case, a proper regular review of its listing and it did not therefore have the benefit of the related procedural safeguards, the conditions laid down by the case-law for assessing the proportionality of measures such as the maintaining acts are not satisfied, with the result that those acts are manifestly disproportionate. 120 It should be borne in mind that restrictive measures are measures of a precautionary and, by definition, provisional nature, the validity of which always depends on whether the factual and legal circumstances which led to their adoption continue to apply and on the need to persist with them in order to achieve their objective. It is thus for the Council, in the course of its periodic review of those restrictive measures, to conduct an updated assessment of the situation and to appraise the impact of such measures, in order to determine whether they have made it possible to attain the objectives pursued by the initial inclusion of the names of the persons and entities concerned on the list at issue or whether the same conclusion in respect of those persons and entities can still be drawn (judgment of 12 February 2020, Amisi Kumba v Council, T‑163/18, EU:T:2020:57, paragraphs 58 and 59). In addition, in order to justify retaining a person’s name on the list, the Council is not prohibited from basing its decision on the same evidence justifying the initial inclusion, re-inclusion or previous retention of the name of the person concerned on the list, provided that (i) the reasons given for inclusion remain unchanged and (ii) the context has not changed in such a way that that evidence is now out of date. That context includes not only the situation of the country in respect of which the system of restrictive measures was established, but also the particular situation of the person concerned (see judgment of 26 October 2022, Ovsyannikov v Council, T‑714/20, not published, EU:T:2022:674, paragraph 78 and the case-law cited). 121 In the present case, the applicant’s claim as set out in its statement of modification concerning infringement of the Council’s obligation to carry out a periodic review is unfounded. 122 First, by letter of 21 December 2022, the Council informed the applicant of its intention to extend the restrictive measures against it and enclosed additional evidence on which the Council relied in the context of the annual review of the measures, and the applicant submitted observations on the extension of the measures and the new evidence by letter of 12 January 2023. 123 Second, by letter of 27 February 2023, the Council replied to the applicant’s observations. That letter contained detailed arguments explaining the reasons why the Council took the view that the applicant’s arguments were not sufficient for it to alter its assessment and that it was appropriate to continue to apply restrictive measures to the applicant. 124 The applicant was therefore able to submit its comments before the maintaining acts were adopted, and its observations were taken into account by the Council. In addition, all of the arguments on the merits of the grounds for maintaining the applicant’s inclusion on the lists at issue refer not to the issue of judicial protection, but to the validity of the initial acts. 125 Moreover, inasmuch as the applicant essentially reiterates the arguments which have already been rejected in the context of the examination of the second and fourth pleas in respect of the initial acts, without submitting fresh arguments concerning the maintaining acts, those arguments must be rejected for the same reasons in the context of the examination of the lawfulness of the maintaining acts. 126 It follows that the second and fourth pleas must be rejected in their entirety. 127 In the context of the third plea, the applicant alleges an error of assessment of the facts and infringement of Article 4(1)(b) of Decision 2012/642. 128 In that regard, it should be noted that, in so far as they concern the applicant, the grounds for the maintaining acts are essentially the same as the grounds for the initial acts, the only difference being the use of the past tense in the first sentence of the second paragraph of the grounds for the listing at issue, relating to the existence of the applicant’s monopoly rights for the export of potassium fertilisers. 129 The applicant submits that the reason for its inclusion on the list at issue – on which it continues to appear following the maintaining acts – cannot be an outdated event, since, pursuant to the Presidential Decrees of March 2022, other entities are now able to export potassium fertilisers. 130 In that regard, first of all, the activity of several entities on a market as important as the potassium fertiliser export market in Belarus does not in itself preclude the applicant from enjoying the regime’s support. 131 Next, even though the potassium fertiliser export market has been formally opened up, as demonstrated by the items of evidence submitted by the Council when the maintaining acts were adopted, the applicant continues to enjoy special privileges within that market, since, in accordance with Presidential Decree No 77 of 5 March 2022, it secured the right to use the word ‘Belarusian’ in its name and in the particulars of documents or promotional materials, and to use a seal, stamps and letterheads depicting the emblem of the Republic of Belarus. 132 It is true that, as is apparent from the items of evidence submitted by the Council when the maintaining acts were adopted, other entities may now apply for a licence to export potassium fertilisers. However, that is not sufficient to conclude that the applicant does not retain its dominant position on the export market for Belarusian potassium fertilisers. Moreover, unlike other entities, the applicant enjoys privileged access since it is not required to go through the procedure for applying for a licence to export potassium fertilisers. 133 Lastly, it is apparent from an article on the website ‘export.by’ of 7 April 2021, submitted in working document 17501/2022 INIT, that, even following the end of the applicant’s monopoly on the export market for Belarusian potassium fertilisers, it continues to receive significant benefits from the Belarusian Government, including consent to enter into a voluntary insurance agreement to cover political and commercial risks during the implementation of a short-term export contract. 134 Therefore, contrary to the applicant’s claims concerning the items of evidence submitted in working document 17501/2022 INIT, it must be held that, although that evidence suggests that the potassium fertiliser export market has opened up, it is not such as to call into question the fact that the applicant continues to enjoy privileges and a leading position. 135 Consequently, the third plea must be rejected as unfounded and, in consequence, the application for partial annulment of the maintaining acts dismissed. 136 In the light of all of the foregoing considerations, the present action must be dismissed in its entirety. Costs 137 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those of the Council, in accordance with the form of order sought by the Council. 138 Under Article 138(1) of the Rules of Procedure, the Member States and institutions which have intervened in the proceedings are to bear their own costs. Consequently, the Republic of Latvia must be ordered to bear its own costs. On those grounds, THE GENERAL COURT (Fourth Chamber) hereby: 1. Dismisses the action; 2. Orders Belarusian Potash Company AAT to bear its own costs and to pay those incurred by the Council of the European Union; 3. Orders the Republic of Latvia to bear its own costs. da Silva Passos Gervasoni Półtorak Delivered in open court in Luxembourg on 18 September 2024. V. Di Bucci M. van der Woude Registrar President * Language of the case: English.