Judgment — ECLI:EU:T:2017:479
Date: 2017-07-07
Language of the case: German
Court formation: Sixth Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for annulment - unfounded

summary of reasons underpinning that decision, with the result that the judicial review is not confined to an assessment of the abstract plausibility of the reasons relied on, but looks at whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, are substantiated by sufficiently precise and concrete evidence (see judgment of 21 April 2015, Anbouba v Council, C‑605/13 P, EU:C:2015:248, paragraphs 41 and 45 and the case-law cited). 137 Moreover, according to the case-law concerning decisions to maintain the inclusion of a person’s name on a list of persons covered by restrictive measures, when comments are made by the individual or the entity concerned on the summary of reasons, the competent EU authority is under an obligation to examine, carefully and impartially, whether the alleged reasons are well founded, in the light of those comments and any exculpatory evidence provided with those comments (see judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 114 and the case-law cited; judgment of 30 April 2015, Al-Chihabi v Council, T‑593/11, EU:T:2015:249, paragraph 51). 138 It also follows from case-law that, in order to assess the nature, form and degree of the proof that the Council may be required to provide, it is necessary to take account of the specific nature and scope of the restrictive measures, as well as of their objective (see judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 59 and the case-law cited). 139 As is apparent from recitals 1 and 2 of Decision 2014/119, that decision forms part of a more general EU policy of support for the Ukrainian authorities which is intended to promote the political stability of Ukraine. It thus satisfies the objectives of the CFSP, which are defined, in particular, in Article 21(2)(b) TEU, pursuant to which the European Union is to engage in international cooperation with a view to consolidating and supporting democracy, the rule of law, human rights and the principles of international law (see, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 60 and the case-law cited). 140 It is within that context that the restrictive measures at issue provide for the funds and economic resources of, in particular, persons who have been ‘identified as responsible for the misappropriation of Ukrainian State funds’ to be frozen. The rule of law in Ukraine is, after all, strengthened and supported by facilitating the recovery of those funds. 141 It follows that the restrictive measures at issue are not intended to penalise any misconduct in which the persons concerned may have engaged, or to deter them, by coercion, from engaging in such conduct. The sole purpose of those measures is to facilitate the Ukrainian authorities’ identification of any misappropriation of public funds that has taken place and to protect the possibility of the authorities recovering misappropriated public funds. They are therefore purely precautionary (see, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 62 and the case-law cited). 142 Thus, the restrictive measures at issue, which were imposed by the Council on the basis of the powers conferred on it by Articles 21 and 29 TEU, have no criminal-law aspect. They cannot, therefore, be treated in the same way as a decision to freeze assets that has been taken by a national judicial authority of a Member State in the relevant criminal proceedings, respecting the safeguards provided by those proceedings. Consequently, the requirements the Council must fulfil with regard to the evidence underpinning a person’s entry on the list of persons whose assets are to be frozen cannot be exactly the same as those which apply to the national judicial authority in the abovementioned case (see, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 64 and the case-law cited). 143 It should also be recalled that the Council is not required to carry out, systematically and on its own initiative, its own investigations or checks for the purpose of obtaining additional information, when it already has information provided by the authorities of a third country in taking restrictive measures against nationals of that country who are the subject of judicial proceedings in that country (judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 57). 144 In the present case, what the Council must ascertain is, first, to what extent the documents [confidential] on which it intends to rely prove that, as indicated by the grounds for including the applicant’s name on the list at issue, referred to in paragraph 134 above, the applicant is the subject of criminal proceedings brought by the Ukrainian authorities in respect of acts that may be characterised as the misappropriation of State funds, and, secondly, whether those proceedings are such that the applicant’s actions can be characterised as satisfying the abovementioned criterion. Only if those investigations were not successful would it, in the light of the case-law referred to in paragraph 137 above, be incumbent on the Council to investigate further (see, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 65 and the case-law cited). 145 Furthermore, in the context of the cooperation governed by the contested acts (see paragraph 139 above), it is not, in principle, for the Council itself to examine and assess the accuracy and relevance of the information relied on by the Ukrainian authorities in conducting criminal proceedings in respect of the applicant for conduct that could be characterised as misappropriation of public funds. As explained in paragraph 141 above, in adopting the contested acts, the Council does not seek itself to punish the misappropriation of public funds being investigated by the Ukrainian authorities, but to protect the possibility of the authorities identifying such misappropriation and recovering the funds thus misappropriated. It is therefore for those authorities, in the context of those proceedings, to verify the information on which they are relying and, where appropriate, to draw the appropriate conclusions as regards the outcome of those proceedings (see, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 66). 146 That interpretation is confirmed by the case-law to the effect that it is not for the Council to verify whether the investigations of which the person concerned is the subject are well founded, but only to verify whether that is the case as regards the decision to freeze funds in the light of those investigations (see, to that effect and by analogy, judgment of 5 March 2015, Ezz and Others v Council, C‑220/14 P, EU:C:2015:147, paragraph 77). 147 Admittedly, the Council cannot, in all circumstances, adopt the findings of the Ukrainian authorities [confidential]. Such conduct would not be consistent with the principle of good administration nor, generally, with the obligation on the part of the EU institutions to respect fundamental rights in the application of EU law, under the combined provisions of the first subparagraph of Article 6(1) TEU and Article 51(1) of the Charter (see, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 67). 148 However, it is for the Council to assess, on the basis of the circumstances of the case, whether it is necessary to investigate further, in particular to seek the disclosure of additional evidence from the Ukrainian authorities if it transpires that the evidence already supplied is insufficient or inconsistent. Information communicated to the Council, either by the Ukrainian authorities themselves or in some other way, might conceivably lead that institution to doubt the adequacy of the evidence already supplied by those authorities. Furthermore, when availing themselves of the opportunity which the persons concerned must be given to submit their comments on the reasons which the Council intends to use to maintain their names on the list at issue, those persons may submit such information, or even exculpatory evidence, which would require the Council to investigate further. In particular, while it is not for the Council to take the place of the Ukrainian judicial authorities in assessing whether the criminal proceedings [confidential] are well founded, it is not inconceivable that, in the light, in particular, of the applicant’s observations, the Council might be obliged to seek clarification from those Ukrainian authorities with regard to the material on which those proceedings are based (see, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 68). 149 In the present case, it should be noted that the Council bases its decision to maintain the restrictive measures against the applicant principally on the letter of 10 October 2014 [confidential]. The letter also refers [confidential]. Only one of the two cases, number [confidential], is relevant, inasmuch as it relates to a misappropriation of public funds, which is the reason given for maintaining the applicant’s name in the contested acts. Moreover, the subject matter of those proceedings is characterised in law by the Ukrainian authorities as misappropriation of funds [confidential]. That letter indicates that the applicant misappropriated funds [confidential]. 150 It follows that the decision to maintain the restrictive measures against the applicant was based on evidence which enabled the Council to establish unequivocally the existence of proceedings instituted by the Ukrainian judicial authorities against the applicant in connection with the offence of misappropriation of public funds. 151 It should be noted, after all, that the letter of 10 October 2014 shows that [confidential], and thus leaves no doubt as to the applicant’s alleged involvement, particularly given that the facts describing the offence are consistent, coherent and characterised in law by the Ukrainian authorities as misappropriation of public funds, and thus meet the relevant criterion set out above. 152 Moreover, that evidence, which was made known to the Council, is contained [confidential] (see, to that effect, judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraphs 41 and 93). In that regard, the Council cannot therefore be criticised for having regarded the information [confidential] as correct and substantiated. 153 Furthermore, it is important to point out that the letter states that the applicant is suspected of having committed certain economic offences [confidential]. 154 In that regard, it should be noted that the restrictive measures at issue facilitate and complement the efforts made by the Ukrainian authorities to recover the misappropriated public funds, to which extent they are caught by the objective of consolidating the rule of law, as indicated in paragraphs 140 and 141 above. 155 Finally, it is also appropriate to point out that the prosecution of economic crimes, such as misappropriation of public funds, is an important means of combating corruption and that, in the context of the external action of the European Union, the combating of corruption is a principle encompassed by the rule of law. It must further be observed that the offence that the applicant is alleged to have committed has a wider context, in that a significant part of the former Ukrainian leadership is suspected of having committed serious crimes in the management of public resources, thereby seriously threatening the legal and institutional foundations of the country and undermining, inter alia, the principles of legality, prohibition on arbitrary exercise of power by the executive, effective judicial review and equality before the law (see, to that effect, judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 117). It follows that, taken as a whole and taking into consideration the role occupied by the applicant within the former Ukrainian leadership, the restrictive measures at issue contribute, in an effective manner, to facilitating the prosecution of crimes of misappropriation of public funds that were to the detriment of the Ukrainian institutions and ensure that the Ukrainian authorities can more easily secure restitution of the profits of such misappropriation. That facilitates, in the event that the prosecutions are successful, the punishment, through the courts of law, of alleged acts of corruption committed by members of the former regime, and thereby contributes to the support of the rule of law in that country (see, to that effect, judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 118). 156 Thus, the Council did not commit a manifest error of assessment in adopting the contested acts in so far as they concern the applicant. 157 That conclusion cannot be called into question by the other arguments raised by the applicant. 158 First, the applicant’s argument that the investigation of which he is the subject in Ukraine cannot culminate in his being charged with an offence, in the light of [confidential], as well as the relevant provisions of Ukrainian law and the limited decision-making powers which he exercised, must be rejected. 159 After all, the applicant does not dispute the authenticity of the letter of 10 October 2014. The Council must thus be regarded as having furnished proof of the existence in Ukraine of criminal proceedings relating to the applicant. In that regard, it should be observed that the only evidence provided by the applicant to the Council before the contested acts were adopted sought, in essence, to challenge the merits of the investigation and concerned the powers of the Prime Minister in the Ukrainian legal system and Ukrainian budgetary provisions. That evidence was not therefore such as to call into question the merits of the decision to freeze funds in the light of the investigation. 160 In any event, any argument by the applicant which has to do with challenging the veracity of the accusations made against him and which seeks to refute the facts constituting the offence under investigation in Ukraine are irrelevant, inasmuch as it follows from the case-law recalled in paragraphs 141, 143, 145 and 146 above that it was not, in principle, for the Council itself to examine and assess the accuracy and relevance of the information on which the Ukrainian authorities relied as the basis for conducting a judicial investigation relating to the applicant, it being for those authorities, in the course of those investigations, to verify the information on which they are relying and to draw the appropriate conclusions with regard to the outcome of those investigations (see, to that effect and by analogy, judgment of 14 April 2016, Ben Ali v Council, T‑200/14, not published, EU:T:2016:216, paragraph 158). 161 Secondly, with regard to the judgments given by the Ukrainian administrative courts, which, according to the applicant, demonstrate in essence that the facts on which the investigation concerning him are based do not constitute a misappropriation of public funds, it should be observed that, whether or not they are relevant, the applicant has not established that the Council was aware of them before the contested acts were adopted. It follows that the Council cannot be criticised for having committed a manifest error of assessment in that regard. 162 It should be recalled, moreover, that a decision to freeze assets is to be assessed in the light of the information available to the Council when the decision was adopted (judgment of 28 May 2013, Trabelsi and Others v Council, T‑187/11, EU:T:2013:273, paragraph 115). According to settled case-law, after all, the legality of a European Union measure must be assessed on the basis of the elements of fact and of law existing at the time when the measure was adopted (see judgment of 26 October 2012, Oil Turbo Compressor v Council, T‑63/12, EU:T:2012:579, paragraph 19 and the case-law cited). 163 Thirdly, as regards the alleged infringement of the principle of the presumption of innocence, which is enshrined, in the European Union legal order, in Article 48(1) of the Charter, it is readily apparent, as the Council has noted, that there is nothing in the contested acts which indicates that the applicant has been found guilty of conduct punished under Ukrainian criminal law or the law of an EU Member State, or which prejudges the assessment of the facts by the competent Ukrainian authorities and courts. Moreover, in adopting those acts, the Council did not instil in public opinion a feeling that the applicant is guilty. Those acts merely state that the applicant is the subject of criminal proceedings in Ukraine concerning a misappropriation of public funds (see, to that effect and by analogy, judgment of 27 February 2014, Ezz and Others v Council, T‑256/11, EU:T:2014:93, paragraphs 82 to 84). 164 Fourthly, with regard to the lack of credibility [confidential], which is said to vitiate the letter of 10 October 2014, it should be observed, on the one hand, that Ukraine, as a Member State of the Council of Europe since 1995, has ratified the ECHR and, on the other, that the new Ukrainian regime has been recognised as lawful both by the European Union and by the international community. The Council did not therefore err in relying on evidence [confidential] without challenging the legality and legitimacy of the Ukrainian regime and judicial system. In any event, in so far as an examination of the applicant’s arguments would require the Court to give a ruling on the lawfulness of the Ukrainian regime’s transition, it need hardly be pointed out that such an examination does not fall within the scope of the power of review exercised by the Court in relation to the acts forming the subject matter of the present case (see, to that effect and by analogy, judgment of 25 April 2013, Gbagbo v Council, T‑119/11, not published, EU:T:2013:216, paragraph 75). 165 Fifthly, as regards the claims concerning the alleged inadequacy of the statement of reasons, reference should be had to the assessment carried out in connection with the first plea in law, alleging infringement of the obligation to state reasons. 166 Finally, in his written pleadings and at the hearing, the applicant, relying, first, on the judgment of 16 October 2014, LTTE v Council (T‑208/11 and T‑508/11, under appeal, EU:T:2014:885), and, secondly, on the Opinion of Advocate General Sharpston in Council v LTTE (C‑599/14 P, EU:C:2016:723), submitted that the Council must, before acting on the basis of a decision of an authority of a third State, carefully verify that the relevant legislation of that State ensures protection of the rights of defence and a right to effective judicial protection equivalent to that guaranteed at EU level. According to the applicant, there is no reason to assume that the level of protection of fundamental rights guaranteed in Ukraine is at least equivalent to that in the European Union. It therefore falls to the Council to ascertain whether the Ukrainian legal system guarantees such protection. 167 That argument is based on incorrect premisses. The approach taken by the General Court in the case which gave rise to the judgment of 16 October 2014, LTTE v Council (T‑208/11 and T‑508/11, EU:T:2014:885) cannot be transposed to the present case. 168 More particularly, in that case, Council Common Position 2001/931/CFSP of 27 December 2001 on the application of specific measures to combat terrorism (OJ 2001 L 344, p. 93), which establishes a mechanism the effect of which is to allow the Council to include a person on a list relating to frozen funds on the basis of a decision taken by a national authority, in some cases of a third State, laid down a criterion for selecting the persons covered by the restrictive measures adopted by the Council which read as follows: ‘The list … shall be drawn up on the basis of precise information or material in the relevant file which indicates that a decision has been taken by a competent authority in respect of the persons, groups and entities concerned, irrespective of whether it concerns the instigation of investigations or prosecution for a terrorist act, an attempt to perpetrate, participate in or facilitate such an act based on serious and credible evidence or clues, or condemnation for such deeds. Persons, groups and entities identified by the Security Council of the United Nations as being related to terrorism and against whom it has ordered sanctions may be included in the list.’ 169 In the present case, the existence of a prior decision by the Ukrainian authorities is not one of the criteria laid down in Article 1(1) of Decision 2014/119, as amended by Decision 2015/143, as a condition for the adoption of the restrictive measures at issue, the judicial proceedings initiated by those authorities being only the factual basis for those measures. The relevant criterion simply refers to persons ‘having been identified as responsible for the misappropriation of Ukrainian State funds’. 170 In that regard, it must also be pointed out that the wording of the relevant criterion is closer to that of the criterion in the case which gave rise to the judgment of 27 February 2014, Ezz and Others v Council (T‑256/11, EU:T:2014:93). In particular, in paragraph 6[7] of the judgment of 27 February 2014, Ezz and Others v Council (T‑256/11, EU:T:2014:93), the General Court held that that criterion comprised persons being prosecuted for the ‘misappropriation of … State funds’, without examining whether the legal order of the country concerned, in that case Egypt, offered legal protection comparable to that guaranteed in the European Union. 171 In any event, as the Council stated at the hearing, it should be noted that there is a considerable difference between restrictive measures, such as those at issue in the case that gave rise to the judgment of 16 October 2014, LTTE v Council (T‑208/11 and T‑508/11, EU:T:2014:885), which are concerned with combating terrorism, and those which, as in the present case, form part of cooperation between the European Union, on the one hand, and the new authorities of a third State, in this instance, Ukraine, on the other. 172 After all, the fight against terrorism, to which the Council contributes by imposing restrictive measures on certain persons or entities, does not necessarily form part of cooperation with the authorities of a third State which has undergone a regime change that the Council has decided to support. The measures at issue in the present case, however, did form part of such cooperation, as did the measures at issue in the case which gave rise to the judgment of 27 February 2014, Ezz and Others v Council (T‑256/11, EU:T:2014:93), confirmed on appeal by judgment of 5 March 2015, Ezz and Others v Council, (C‑220/14 P, EU:C:2015:147). 173 Thus, if the Council’s eminently political decision to cooperate with the new Ukrainian authorities – which it considers to be trustworthy – so as to enable them in particular to recover any misappropriated public funds ‘with a view to consolidating and supporting the rule of law’ in Ukraine were subject to the condition that, notwithstanding the fact that that country is a member of the Council of Europe and has ratified the ECHR, the Ukrainian State should, immediately after the change of regime, guarantee a level of protection of fundamental rights equivalent to that offered by the European Union and its Member States, the broad discretion enjoyed by the Council when it comes to defining the general criteria for identifying the category of persons capable of forming the subject of restrictive measures to support those new authorities would in effect be undermined (see paragraph 136 above). 174 In exercising that broad discretion, the Council must therefore be free to take the view that, following the change of regime, the Ukrainian authorities deserve to be supported in so far as they are improving democratic life and respect for the rule of law in Ukraine as compared with the state of affairs obtaining there previously, and that one way of consolidating and supporting the rule of law is to freeze the assets of persons having been identified as responsible for the misappropriation of Ukrainian State funds, a category which, following the January 2015 acts, includes persons under investigation by the Ukrainian authorities for misappropriation of public funds or complicity therein, and for abuse of office or complicity therein. 175 Consequently, only if the Council’s political decision to support the new Ukrainian regime, including by way of cooperation in the form of the restrictive measures at issue, proved to be manifestly erroneous, in particular because fundamental rights are being systematically violated in that country following the change of regime, could any inconsistency between the protection of fundamental rights in Ukraine and that in place in the European Union have a bearing on the legality of maintaining those measures against the applicant. It is clear from an examination of the present action that that is not the case here. 176 In the present case, it should be noted that the evidence submitted by the applicant is neither such as to call into question the plausibility of the accusations made against him in connection with the misappropriation of public funds, as examined above, nor sufficient to demonstrate that his particular situation was affected by the shortcomings he claims to exist in the Ukrainian judicial system during the proceedings of which he is the subject and which form the basis of the decision to maintain the restrictive measures against him. 177 In the light of all the foregoing, it must be concluded that the Council discharged the burden of proof incumbent upon it and did not commit a manifest error of assessment in taking the view that the letter of 10 October 2014 provided a factual basis sufficient to demonstrate that, at the time when the contested acts were adopted, the applicant was the subject of criminal proceedings relating to a misappropriation of public funds [confidential], and, on that basis, in maintaining the applicant’s name on the list. 178 In those circumstances, the fifth plea in law must be rejected. 179 Consequently, the entire action must be dismissed, there being no need to examine either the applicant’s application for a measure of organisation of procedure or the request, submitted by the Council in the alternative, to maintain the effects of Decision 2015/364. Costs 180 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, he must be ordered to pay the costs, in accordance with the form of order sought by the Council. On those grounds, THE GENERAL COURT (Sixth Chamber) hereby: 1. Dismisses the action; 2. Orders Mr Mykola Yanovych Azarov to pay the costs. Berardis Spielmann Csehi Delivered in open court in Luxembourg on 7 July 2017. [Signatures] Table of contents Background to the dispute Events subsequent to the bringing of the action Procedure and forms of order sought Law The first plea in law, alleging infringement of the obligation to state reasons The second plea in law, alleging infringement of fundamental rights The fourth part, alleging infringement of the rights of the defence The first part, alleging infringement of the right to property The second part, alleging infringement of the right to pursue an economic activity The third part, alleging that the restrictive measures are disproportionate The third plea in law, alleging a misuse of powers The fourth plea in law, alleging infringement of the principle of good administration The fifth plea in law, alleging a manifest error of assessment Costs * Language of the case: German. 1 Confidential data redacted.