Judgment;Abstract — ECLI:EU:T:2019:502
Date: 2019-07-11
Language of the case: English
Court formation: Sixth Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for annulment - successful

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 (see judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraph 22 and the case-law cited). 75 The adoption and the maintenance of restrictive measures, such as those laid down in Decision 2014/119 and Regulation No 208/2014, as amended, taken against a person who has been identified as responsible for the misappropriation of funds of a third State are based, in essence, on the decision of an authority of that state, which was competent to make it, to initiate and conduct criminal investigation proceedings concerning that person and relating to an offence of misappropriation of public funds (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraph 25). 76 In addition, whereas, under the listing criterion, such as that referred to in paragraph 12 above, the Council can base restrictive measures on the decision of a third State, the obligation, on that institution, to respect the rights of the defence and the right to effective judicial protection means that it must satisfy itself that those rights were complied with by the authorities of the third State which adopted that decision (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraphs 26, 27 and 35). 77 In that regard, the Court of Justice states that the requirement for the Council to verify that the decisions of third States, on which it intends to rely, have been taken in accordance with those rights is designed to ensure that the adoption or the maintenance of the measures for the freezing of funds occurs only on a sufficiently solid factual basis and, accordingly, to protect the persons or entities concerned. Thus, the Council cannot conclude that the adoption or the maintenance of such measures is taken on a sufficiently solid factual basis before having itself verified that the rights of the defence and the right to effective judicial protection were complied with at the time of the adoption of the decision by the third State in question on which it intends to rely (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraphs 28 and 34 and the case-law cited). 78 Moreover, although it is true that the fact that a third State is among the States which acceded to the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), entails review, by the ECtHR, of the fundamental rights guaranteed by the ECHR, which, in accordance with Article 6(3) TEU, form part of EU law as general principles, that fact cannot render superfluous the verification requirement referred to in paragraph 77 above (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraph 36). 79 The Court of Justice also held that the Council must refer, if only briefly, in the statement of reasons relating to the adoption or the maintenance of the restrictive measures against a person or entity, to the reasons why it considers the decision of the third State on which it intends to rely to have been adopted in accordance with the rights of the defence and the right to effective judicial protection. Thus, it is for the Council, in order to fulfil its obligation to state reasons, to show, in the decision imposing the restrictive measures, that it has verified that the decision of the third State on which those measures are based was taken in accordance with those rights (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraphs 29 and 30 and the case-law cited). 80 Ultimately, when it bases the adoption or the maintenance of restrictive measures, such as those in the present case, on the decision of a third State to initiate and conduct criminal proceedings for misappropriation of public funds or assets by the person concerned, the Council must, first, ensure that, at the time of the adoption of that decision, the authorities of that third State have complied with the rights of the defence and the right to effective judicial protection of the person against whom the criminal proceedings at issue have been brought and, second, refer to, in the decision imposing restrictive measures, the reasons for which it considers that that decision of the third State has been adopted in accordance with those rights. 81 It is in the light of those case-law principles that it is necessary to examine whether the Council complied with those obligations. 82 In the first place, it must be noted that the applicant is subject to new restrictive measures adopted by means of the contested acts on the basis of the listing criterion set out in Article 1(1) of Decision 2014/119, as clarified in Decision 2015/143, and in Article 3 of Regulation No 208/2014, as clarified in Regulation 2015/138 (see paragraphs 12 and 13 above). That criterion provides for the freezing of funds of persons who have been identified as responsible for the misappropriation of public funds, including persons subject to investigation by the Ukrainian authorities. 83 It is common ground that the Council, in order to decide to maintain the applicant’s name on the list, relied on the fact that he was subject to ‘criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets’, which was evidenced by the PGO’s letters of 3 September and 30 November 2015, as regards the March 2016 acts, and by the PGO’s letters of 10 August and 16 November 2016, as regards the March 2017 acts. 84 The maintenance of the restrictive measures taken against the applicant was therefore based, as in the case giving rise to the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), on the PGO’s decision to initiate and conduct criminal investigation proceedings concerning an offence of misappropriation of Ukrainian State funds. 85 In the first place, the fact remains that the statement of reasons for the contested acts relating to the applicant (see paragraphs 15, 20 and 26 above) does not include a single reference to the fact that the Council verified compliance, by the Ukrainian judicial authorities, with the applicant’s rights of defence and his right to effective judicial protection and that, therefore, such a failure to refer to those reasons amounts to an early indication that the Council did not carry out such a verification. 86 In the second place, it must be noted that none of the information contained in the almost identical letters of 7 March 2016 (see paragraph 21 above), as regards Case T‑244/16, and of 6 March 2017 (see paragraph 27 above), as regards Case T‑285/17, makes it possible to consider that the Council had information relating to compliance with the rights at issue by the Ukrainian authorities so far as concerns the criminal proceedings against the applicant and, even less so, that the Council had assessed such information, in order to verify that those rights had been sufficiently complied with by the Ukrainian judicial authorities at the time of the adoption of the decision to initiate and conduct criminal investigation proceedings concerning an offence of misappropriation of public funds or assets committed by the applicant. In those letters, as in the case giving rise to the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031, paragraph 24), the Council merely stated that the PGO’s letters, supplied to the applicant beforehand (see paragraphs 18 and 24 above) showed that the applicant continued to be subject to criminal proceedings for misappropriation of public funds or assets. Furthermore, the fact that Ukraine is one of the States that has acceded to the ECHR, expressly mentioned by the Council in its letters and in its pleadings, does not render verification of compliance with the applicant’s rights of defence and his right to effective judicial protection superfluous (see paragraph 78 above). 87 In the third place, it must be observed that, contrary to its claims, the Council was under an obligation to carry out that verification irrespective of any evidence adduced by the applicant to show that, in the present case, his personal situation had been affected by the problems which he pointed out relating to the functioning of the judicial system in Ukraine. In any event, although the applicant had claimed on numerous occasions, by adducing specific evidence, that the Ukrainian judicial authorities had infringed his rights of defence and his right to effective judicial protection and that the situation in Ukraine was generally incompatible with the existence of sufficient guarantees in that regard, the Council did not show that it had verified compliance with such rights. On the contrary, it repeatedly stated in its pleadings that it was not under any obligation to do so and that such obligation did not stem either from the case-law principles laid down in the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583), relied on by the applicant. 88 In the fourth place, in the reply to the question relating to the impact of the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), on the present cases, the Council put forward only the arguments summarised in paragraph 71 above. 89 In that regard, first, it must be noted that the Council accepts that the statement of reasons for the contested acts does not cover the issue of compliance with the rights of the defence and the right to effective judicial protection in the light of the decision to initiate and conduct the criminal proceedings justifying the inclusion and maintenance of the applicant’s name on the list. 90 Second, it must be noted that the Council claims that it is clear from the files before the Court in the present cases that the conduct of the criminal investigations had been subject to judicial oversight in Ukraine. More specifically, according to the Council, the existence of several judicial decisions adopted in the context of the criminal proceedings against the applicant shows that, when it relied on the decision of the Ukrainian authorities referred in the PGO’s letters, (i) it was able to verify that that decision had been taken in accordance with the rights of the defence and the right to effective judicial protection and (ii) it checked that a certain number of judicial decisions in the context of those criminal proceedings had been taken in accordance with those rights. 91 All the judicial decisions mentioned by the Council fall within the scope of the criminal proceedings which justified the inclusion and maintenance of the applicant’s name on the list and are merely incidental in the light of those proceedings, since they are either restrictive or procedural in nature. It is true that those decisions are capable of supporting the Council’s argument concerning the existence of a sufficiently solid factual basis, namely the fact that, in accordance with the listing criterion, the applicant was subject to criminal proceedings concerning, inter alia, an offence of misappropriation of Ukrainian State funds or assets. However, such decisions are not ontologically capable, alone, of demonstrating, as the Council maintains, that the decision of the Ukrainian judicial authorities to initiate and conduct those criminal proceedings, on which the maintenance of the restrictive measures directed against the applicant is, in essence, based, was taken in accordance with his rights of defence and his right to effective judicial protection. 92 In any event, the Council is not in a position to refer to any document in the file of the procedure which resulted in the adoption of the contested acts showing that it examined the decisions of the Ukrainian courts on which it relies now and from which it was able to conclude that the essence of the applicant’s rights of defence and his right to effective judicial protection had been complied with. 93 It cannot therefore be found that the information available to the Council at the time of the adoption of the contested acts enabled it to verify that the decision of the Ukrainian judicial authorities had been taken in accordance with those rights as they apply to the applicant. 94 Furthermore, in that regard, it must also be noted, as the Court of Justice made clear in the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031), that the case-law of the Court of Justice — according to which, in particular, in the event of the adoption of a decision to freeze funds such as that adopted in respect of the applicant, it is not for the Council or General Court to verify whether or not the investigations to which the person concerned by those measures was subject were well founded, but only to verify whether that was the case in relation to the decision to freeze funds in the light of the document or documents on which that decision was based (see, to that effect, judgments of 5 March 2015, Ezz and Others v Council, C‑220/14 P, EU:C:2015:147, paragraph 77; of 19 October 2017, Yanukovych v Council, C‑599/16 P, not published, EU:C:2017:785, paragraph 69; and of 19 October 2017, Yanukovych v Council, C‑598/16 P, not published, EU:C:2017:786, paragraph 72) — cannot be interpreted as meaning that the Council is not required to verify that the decision of the third State on which it intends to base the adoption of restrictive measures was taken in accordance with the rights of the defence and the right to effective judicial protection (see, to that effect, judgment of 19 December 2018, Azarov v Council, C‑530/17 P, EU:C:2018:1031, paragraph 40 and the case-law cited). 95 In the light of the foregoing, it has not been established that the Council, prior to the adoption of the contested acts, verified that the Ukrainian judicial authorities complied with the applicant’s rights of defence and his right to effective judicial protection. 96 In those circumstances, the contested acts must be annulled, in so far as they concern the applicant, without it being necessary to examine the other pleas in law and arguments put forward by the applicant or the requests for confidential treatment submitted by the Council. Costs 97 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 Council has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant. On those grounds, THE GENERAL COURT (Sixth Chamber) hereby: 1. Annuls Council Decision (CFSP) 2016/318 of 4 March 2016 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, and Council Implementing Regulation (EU) 2016/311 of 4 March 2016 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, as well as Council Decision (CFSP) 2017/381 of 3 March 2017 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, and Council Implementing Regulation (EU) 2017/374 of 3 March 2017 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, in so far as the name of Mr Viktor Fedorovych Yanukovych was maintained on the list of persons, entities and bodies subject to those restrictive measures; 2. Orders the Council of the European Union to bear its own costs and to pay those incurred by Mr Yanukovych. Berardis Spielmann Csehi Delivered in open court in Luxembourg on 11 July 2019. E. Coulon G. Berardis Registrar President * Language of the case: English.