Judgment — ECLI:EU:T:2018:905
Date: 2018-12-12
Language of the case: English
Court formation: Fifth Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for annulment - unfounded

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, since the obligation to state reasons for the decision by identifying the individual, specific and concrete reasons why the competent authorities consider that the individual concerned must be subject to restrictive measures is the corollary of that right (see, to that effect, judgments of 22 November 2012, M., C‑277/11, EU:C:2012:744, paragraph 88, and 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, paragraphs 114 and 116). 154 With regard to the first complaint, it is apparent from the documents which the applicant himself added to the case file that the Council sent him, in good time, information about him that was provided by the Egyptian authorities (i) before the adoption of the 2017 acts and (ii) before the adoption of the 2018 acts. That information is sufficiently detailed and specific with respect to the nature of the proceedings, the facts and the persons concerned and the stage that each of those proceedings had reached, and includes, where appropriate, responses to the applicant’s comments on the basis of those proceedings (see, in particular, the material supplied in Cases No 8897 of 2013 and No 53 of 2013). It therefore enables him to put forward a proper defence. Moreover, in so far as that complaint relates to a lack of solid evidence or credible proof that would substantiate the contested acts, it must be rejected as ineffective in the context of the present plea, since that is a question which concerns the merits of those acts and not the issue as to whether rights of defence were respected during the adoption of those acts. 155 With regard to the second complaint, it must be noted that the fact that the Council did not expressly indicate to the applicant the relevance of the various judicial proceedings referred to by the Egyptian authorities as relating to him has no specific effect on his rights of defence. Since the grounds for the designation of the applicant are set out in the lists at issue, as amended by the contested acts, the applicant was in a position to discuss the relevance of those judicial proceedings in the light of those grounds, which, moreover, he did do in the context of the third plea. The mere fact that, in the absence of clarification by the Council, he was required, as he claims, to submit observations on all the judicial proceedings concerned could not affect his rights of defence. Furthermore, the concepts of ‘asset recovery process’ and ‘final ruling’ are sufficiently clear to enable him to submit his observations on the new ground introduced by the 2017 acts. The second complaint must therefore be rejected. 156 As regards the third complaint, first of all, it should be noted that the fact that the Council did not reply in detail to all the arguments which the applicant put forward in his letters prior to the adoption of Decision 2017/496 does not mean that it did not examine them to the requisite legal standard. It is, moreover, apparent from the Council’s letters of 22 March 2017 and 21 March 2018 that the Council replied, albeit succinctly, to the main objections raised by the applicant prior to the adoption of the contested acts and, in particular, stated its views as regards Case No 8897 of 2013, and in the context of the second of those letters, as regards Case No 53 of 2013. It is therefore evident from those letters that the Council took into account the applicant’s observations on those two cases for the purpose of the adoption of those acts. 157 Next, the fact that the Council did not give the applicant access to internal documents containing an analysis of the information provided by the Egyptian authorities does not mean that no such analysis was carried out. Moreover, as is apparent from paragraph 152 above, upholding the applicant’s rights of defence merely entails the Council’s disclosure to him of the material available to it that concerns him, and not the disclosure to him also of the analysis of that material undertaken by the Council’s services, unless the relevance and scope of that material cannot immediately be inferred from its content and requires explanation, which is not the case here. 158 Furthermore, it has consistently been held that although, in order for the rights of the defence to be observed, the EU institutions must enable the persons concerned to make their views known effectively, those institutions cannot be required to accept them (see judgment of 30 June 2016, Jinan Meide Casting v Council, T‑424/13, EU:T:2016:378, paragraph 126 and the case-law cited). Consequently, it cannot be inferred merely from the fact that the Council relied on some of the information provided by the Egyptian authorities, notwithstanding the applicant’s submissions calling into question its relevance and accuracy, that there was no careful and impartial examination of that information. 159 In any event, the question whether the Council was required to accept that information or carry out further checks concerns the merits of the contested acts. 160 Last, the argument concerning the date on which the proposal to renew the applicant’s designation was put forward by the ‘Mashreq/Maghreb’ working party, that is 20 February 2017, is irrelevant. First, that proposal is merely a preparatory act which does not prejudge the possibility of the Council taking into account the applicant’s subsequent observations in its final decision. Second, although it is the case that the Council only disclosed to him in its letter of 9 February 2017 the information on which it intended to rely in order to adopt the contested acts, the applicant had a sufficient, albeit admittedly short, period of time to submit observations, given that, as is evident from the documents in the case file, that information simply updated matters of which the applicant had already been aware in 2015 and 2016. 161 Therefore, since none of the complaints raised by the applicant in connection with the fourth plea can succeed, this plea must be rejected. 5. Fifth plea in law: unjustified and disproportionate restriction of the applicant’s right to property and damage to his reputation 162 According to the applicant, the freezing of his assets in the European Union does not satisfy either of the two conditions laid down in the case-law for the restriction of his rights, namely, first, that that freezing of assets must pursue an objective of general interest and, second, that it must be necessary and proportional to that objective. 163 As regards the first condition, the applicant maintains that the objective of supporting the rule of law in Egypt cannot constitute a credible objective of the freezing of his assets, given that the Egyptian authorities have taken no steps to recover his assets in the European Union since 2011, contrary to what was declared in their letter of 22 February 2011, and that the current Egyptian regime is undermining democracy, the rule of law, human rights and the principles of international law. 164 As to the second of those conditions, he submits that the asset freeze imposed by the Council is not necessary in so far as, in its letter of 21 February 2011, the Egyptian Government had requested the judicial authorities of certain Member States to freeze the assets of the applicant and of members of his family. Furthermore, he states that there is no reference to a transfer of his assets to the Member States of the European Union in the judicial proceedings on which the Council relies. In addition, he asserts that the freezing of all his assets in the European Union is not the least onerous measure. Last, having failed to make enquiries in order to determine the amount of the funds misappropriated since 2011, the Council can, in the applicant’s submission, no longer rely on the findings of the General Court in paragraph 208 of the judgment of 27 February 2014, Ezz and Others v Council (T‑256/11, EU:T:2014:93). In the statement of modification, the applicant argues that his assets have been frozen for seven years and that that period reinforces the disproportionate nature of the measure. 165 The Council disputes those arguments. 166 It should be borne in mind in that regard that, according to the case-law, in view of the Council’s broad discretion in the present case, the legality of restrictive measures can be affected only if the measures are manifestly inappropriate in relation to the objective which the competent institution is seeking to pursue. The Council must be allowed that broad discretion, including in determining the nature and scope of those measures. Furthermore, it must also be noted that the right to property and the freedom to conduct a business are fundamental rights which are not, however, absolute, and whose exercise may be subject to restrictions justified by objectives of general interest pursued by the European Union. Consequently, restrictions may be imposed on the exercise of the freedom to pursue a trade or profession, as on the exercise of the right to property, in particular in the context of a Council decision or regulation imposing restrictive measures, provided that the restrictions do in fact correspond to objectives of general interest pursued and do not constitute, in relation to the aim pursued, a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed (see judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraphs 154 to 156 and the case-law cited). The same reasoning may be applied, mutatis mutandis, to the right to protection of the applicant’s reputation (see, to that effect, judgment of 25 March 2015, Central Bank of Iran v Council, T‑563/12, EU:T:2015:187, paragraph 115). 167 In the first place, the Court must examine the arguments calling into question the fact that the continued freezing of the applicant’s assets meets the objective of supporting the rule of law in Egypt. 168 As regards the applicant’s argument concerning the alleged failure of the Egyptian authorities to take steps to recover the misappropriated assets, only the judicial proceedings on which the Council was able to rely in order to renew the applicant’s designation should be taken into account. It must be noted that, as regards Cases No 756 of 2012 and No 53 of 2013, the judicial proceedings in those cases have not culminated in a decision containing a definitive ruling on the applicant’s liability with regard to the misappropriation of State funds. Furthermore, in Case No 8897 of 2013, the applicant acknowledged, in the context of the third plea, that the Egyptian authorities had made a request for legal assistance, at least to the United Kingdom authorities for the recovery of misappropriated funds. 169 As regards the applicant’s argument concerning the current political situation in Egypt, it is sufficient to note that, for the reasons set out in paragraphs 80 to 95 and 97 above, the applicant’s arguments in the second part of the second plea, alleging that the freezing of his assets is manifestly inappropriate in the light of the objectives of Decision 2011/172 and Regulation No 270/2011, must be rejected. 170 Consequently, the applicant has failed to establish that the condition that the freezing of his assets must pursue an objective of general interest — in this case, the objective of supporting the rule of law in Egypt — is not met. 171 In the second place, the Court must examine the arguments as to the lack of necessity and proportionality in the freezing of the applicant’s assets in the European Union. 172 First of all, the freezing of the applicant’s assets is an independent measure designed to attain the objectives of the CFSP, not a measure designed to respond to a request by the Egyptian authorities for legal assistance (see, to that effect and by analogy, judgments of 27 February 2014, Ezz and Others v Council, T‑256/11, EU:T:2014:93, paragraph 151 and the case-law cited, and of 5 October 2017, Mabrouk v Council, T‑175/15, EU:T:2017:694, paragraph 146). The question whether measures taken by Member States’ judicial authorities are best suited to meeting the Egyptian authorities’ request for legal assistance and to best protecting the applicant’s fundamental rights is therefore irrelevant. 173 In any event, inasmuch as it applies to the whole of the territory of the European Union, that freezing of funds is clearly better able to safeguard the integrity of the assets covered than a series of decisions taken individually by the national authorities. 174 In addition, that measure, which is temporary and reversible, is subject to certain limitations and derogations which are intended to safeguard the essence of the applicant’s right to property and his freedom to conduct a business, and is subject to review, in principle a full review, by the Courts of the European Union in the light of fundamental rights and, in particular, the rights of the defence and the right to effective judicial protection. 175 As regards the right to reputation, first, it is sufficient to note that the grounds for the applicant’s designation in the annex to Decision 2011/172 and Regulation No 270/2011 do not mention the specific circumstances of the acts to which the judicial proceedings or the asset recovery proceedings concerning the applicant relate, but merely mention the Egyptian authorities’ classification of those acts as criminal. Second, the Council confined itself to mentioning the existence of such proceedings without commenting on the question as to whether or not the applicant had been found guilty (see, to that effect and by analogy, judgment of 11 July 2018, Klyuyev v Council, T‑240/16, not published, EU:T:2018:433, paragraph 182). The damage to the applicant’s reputation does not therefore exceed that which is strictly necessary for the purposes of compliance with the obligation to state reasons. 176 Therefore, the applicant has not established that his rights would be better protected if the freezing of his assets was decided upon by the judicial authorities of the Member States. 177 Next, it is apparent from the case-law that the fact that the judicial proceedings to which the applicant is subject in Egypt do not refer to acts entailing the holding of unlawful assets in the European Union is irrelevant (see, to that effect and by analogy, judgment of 5 October 2017, Mabrouk v Council, T‑175/15, EU:T:2017:694, paragraph 57 and the case-law cited). 178 Last, as regards the disproportionate nature of the asset freeze in dispute, it has repeatedly been held that a partial freezing of the assets of a person such as the applicant in the European Union would not enable the intended objective to be met (see, to that effect and by analogy, judgments of 27 February 2014, Ezz and Others v Council, T‑256/11, EU:T:2014:93, paragraph 233, and of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 161). 179 Furthermore, as is apparent from paragraphs 174 and 175 above, the freezing of the applicant’s assets does not infringe the essence of his fundamental rights. 180 Moreover, even if the Council were in a position to determine the quantum of the misappropriated funds that have become part of the applicant’s assets, that still could not justify limiting the freezing of the applicant’s assets in the European Union to just part of those assets. Implementation of such a measure presupposes that the Council is able to determine the value of the assets held by the applicant in each of the Member States, which involves establishing police and judicial cooperation which in turn falls within the competence of those Member States and, moreover, does not fall within the scope of measures that are precautionary and not penal in nature, such as the contested acts. Accordingly, even on the assumption that the Court’s reasoning in paragraph 208 of the judgment of 27 February 2014, Ezz and Others v Council (T‑256/11, EU:T:2014:93) — that, at the time of the adoption of Decision 2011/172 and Regulation No 270/2011, the Council could not have known the quantum of any possible misappropriation of State funds by the first applicant in that case — is not applicable in the present case, this would have no effect on the proportionality of the contested acts. 181 It must be added that, in the light of the particular circumstances specific to the judicial proceedings on which the Council was entitled to rely (see paragraph 147 above), the duration of those proceedings does not appear to be manifestly excessive. The same applies therefore to the freezing of the applicant’s assets in the European Union. 182 Consequently, the applicant has not established that the freezing of his assets in the European Union is unnecessary or is disproportionate. 183 It follows from all of the foregoing that the fifth plea in law must be rejected. 184 Accordingly, since none of the pleas in the present action can be accepted, the action must be dismissed in its entirety, without there being any need to rule on the admissibility of the claim for annulment of Implementing Regulation 2018/465, in so far as it applies to the applicant (see, to that effect and by analogy, judgment of 5 October 2017, Ben Ali v Council, T‑149/15, not published, EU:T:2017:693, paragraphs 64 and 65). Costs 185 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. 186 In the present case, 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 (Fifth Chamber), hereby: 1. Dismisses the action; 2. Orders Mr Mohamed Hosni Elsayed Mubarak to bear his own costs and to pay those incurred by the Council of the European Union. Gratsias Labucka Ulloa Rubio Delivered in open court in Luxembourg on 12 December 2018. E. Coulon D. Gratsias Registrar President Table of contents I. Background to the dispute and factual context II. Procedure and forms of order sought III. Law A. Application for the adoption, by the Court, of measures of organisation of procedure B. Substance 1. First plea in law: plea of illegality in respect of Article 1(1) of Decision 2011/172, as renewed by Decisions 2017/496 and 2018/466, and in respect of Article 2(1) of Regulation No 270/2011 (a) First part of the first plea, alleging that Article 1(1) of Decision 2011/172, as renewed by Decisions 2017/496 and 2018/466, and Article 2(1) of Regulation No 270/2011 have no legal basis (b) Second part of the first plea, alleging breach of the principle of proportionality by Article 1(1) of Decision 2011/172, as renewed by Decisions 2017/496 and 2018/466, and Article 2(1) of Regulation No 270/2011 2. Second plea in law: infringement of Article 6 TEU, in conjunction with Articles 2 and 3 TEU and Articles 47 and 48 of the Charter (a) First part of the second plea, alleging that the Council failed to satisfy itself that the applicant’s fundamental rights had been respected and applied an irrefutable presumption that the Egyptian authorities had respected those fundamental rights (b) Second part of the second plea, alleging that the renewal of the applicant’s designation is manifestly contrary to the objectives referred to in recital 1 of Decision 2011/172 3. Third plea in law: infringement of the general criteria referred to in Article 1(1) of Decision 2011/172 and in Article 2(1) of Regulation No 270/2011 (a) General considerations (b) The arguments relating to each of the judicial proceedings on which the renewal of the applicant’s designation on the lists at issue is based (1) The judicial proceedings in Case No 8897 of 2013 (2) The judicial proceedings in Cases No 53 of 2013 and No 756 of 2012 4. Fourth plea in law: infringement of the rights of the defence, of the right to good administration and of the right to effective judicial protection 5. Fifth plea in law: unjustified and disproportionate restriction of the applicant’s right to property and damage to his reputation Costs * Language of the case: English.