Judgment — ECLI:EU:T:2018:545
Date: 2018-09-13
Language of the case: English
Court formation: Sixth Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for annulment - unfounded;Action for annulment - inadmissible

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, is substantiated (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 119). 124 Next, it should be recalled that, in the present case, the applicant’s name was listed in Annex IV to Decision 2014/512 not because of its links with the Russian Government or because of its direct or indirect responsibility with regard to the Russian Federation’s actions to destabilise the situation in Ukraine, but because of its status as a Russian enterprise operating in the field of defence and armaments (see paragraph 95 above), which the applicant does not dispute. 125 The applicant’s arguments contesting its direct or indirect involvement in the conflict in eastern Ukraine or its links with the Russian Government are therefore ineffective in that respect. 126 The objective of the restrictive measures concerned is not to penalise certain entities because of their links with the situation in Ukraine, but to impose economic sanctions on the Russian Federation, in order to increase the costs of its actions to undermine Ukraine’s territorial integrity, sovereignty and independence, and to promote a peaceful settlement of the crisis (see paragraph 96 above). 127 In that regard, it should be noted, as did the Council, that the reference to the fact that the applicant is a Russian State-owned enterprise is purely indicative and is not a prerequisite for adoption of the restrictive measures concerned. In so far as those measures cover a particular sector of the economy, because of its importance to the Russian economy or its connection with the Russian Federation’s actions to destabilise Ukraine, it is not required that the undertakings targeted should be Russian State-owned undertakings (see, to that effect, judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council, T‑255/15, not published, EU:T:2017:25, paragraph 135). 128 In any event, it is sufficiently clear from the evidence provided by the Council that the applicant is a Russian State-owned company and that it manufactures weaponry and military equipment which it supplies to the Russian army, which, in turn, supplies heavy weaponry to separatists in eastern Ukraine, contributing to the destabilisation of Ukraine (see, to that effect, judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council, T‑255/15, not published, EU:T:2017:25, paragraphs 129 to 143). 129 Accordingly, the Council did not make an error of assessment when it listed the applicant’s name in Annex IV to Decision 2014/512, and then extended that listing by the adoption of the contested decisions. The first plea in law, alleging breach of the principle of proportionality 130 The applicant submits, by this plea, that the extension of the restrictive measures imposed by the contested decisions is incompatible with the principle of proportionality, as that principle has been affirmed by Article 5(4) TEU and the first paragraph of Article 296 TFEU. The listing of the applicant’s name cannot be regarded as a measure that is appropriate for the purpose of attaining the objective pursued by the Council, which is to prevent the further destabilisation of Ukraine and to implement the Minsk agreements. 131 As a result of the further restrictions arising from the adoption of Decision 2014/659, all the entities listed in Annex IV to Decision 2014/512 are prohibited from acquiring dual-use goods, even for non-military use, while the same prohibition, limited to military use, was already covered by Article 3 of Decision 2014/512. 132 Further, according to the applicant, the restrictive measures concerned go beyond what is necessary to attain their objective, since the Council did not verify that the applicant — directly or indirectly — contributed or still contributes to the destabilisation of Ukraine or that it had any influence on events in Ukraine. Nor did the Council demonstrate that the applicant supplied arms or ammunition — directly or indirectly — to separatists in eastern Ukraine. Lastly, the Council did not list all the companies operating in the defence sector, or all State-owned enterprises in Russia. 133 Therefore, the applicant argues, notwithstanding the Council’s margin of discretion, the restrictive measures imposed on the applicant by the contested decisions are disproportionate and should be annulled. 134 The Council disputes those arguments. 135 It should be noted in that regard that, according to Article 52(1) of the Charter, ‘any limitation on the exercise of the rights and freedoms recognised by [the] Charter must be provided for by law and respect the essence of those rights and freedoms’, and, moreover, ‘subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others’. 136 Consequently, in order to comply with EU law, a limitation on the exercise of the fundamental rights concerned must satisfy three conditions. First, the limitation must be provided for by law. In other words, the measure in question must have a legal basis. Secondly, the limitation must refer to an objective of general interest, recognised as such by the European Union. Thirdly, the limitation may not be excessive. It must be necessary and proportional to the aim sought, and the ‘essential content’, that is the substance, of the right or freedom at issue must not be impaired (see judgment of 30 November 2016, Rotenberg v Council, T‑720/14, EU:T:2016:689, paragraphs 170 to 173 and the case-law cited). 137 It is clear that those three conditions are met in the present case. 138 In the first place, the restrictive measures at issue are ‘provided for by law’, since they are set out in acts which are, in particular, of general application, have a clear legal basis in EU law and are sufficiently reasoned (see paragraphs 82 to 99 above). Furthermore, in the review of the third plea in law, it has been established that that statement of reasons was sufficient to support the conclusion that the retention of the applicant’s name on the list at issue was well founded (see paragraphs 124 to 129 above). 139 In the second place, it is apparent from recitals 1 to 8 of Decision 2014/512 that the stated objective of that decision is to increase the costs of the Russian Federation’s actions to undermine Ukraine’s territorial integrity, sovereignty and independence, and to promote a peaceful settlement of the crisis. Such an objective is consistent with the objective of maintaining peace and international security, in accordance with the objectives of the European Union’s external action set out in Article 21 TEU (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 115). 140 With regard, specifically, to the measures affecting the applicant that were imposed in the relevant provisions of Decision 2014/512, it must be recalled that these were added by Decision 2014/659, which states in recitals 4, 5 and 6 that, in view of the gravity of the situation in Ukraine, the Council considered it appropriate to take further restrictive measures in response to the Russian Federation’s actions destabilising the situation in Ukraine. In that context, the Council considered it appropriate to provide for additional restrictions on access to the capital market targeting, inter alia, certain Russian entities in the defence sector, and to prohibit the sale, supply or transfer of dual-use items to certain persons, entities or bodies established in Russia. 141 In the third place, with regard to the principle of proportionality, it should be noted that, as a general principle of EU law, this requires that measures adopted by the EU institutions do not exceed the limits of what is appropriate and necessary in order to attain the objectives pursued by the legislation in question. Consequently, when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (see judgment of 30 November 2016, Rotenberg v Council, T‑720/14, EU:T:2016:689, paragraph 178 and the case-law cited). 142 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 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 may 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). 143 First, it is indeed the case that restrictive measures, by definition, have consequences which affect rights to property and the freedom to pursue a trade or business, thereby causing harm to persons who are in no way responsible for the situation which led to the adoption of the sanctions. That is a fortiori the case with respect to the consequences of targeted restrictive measures on the entities subject to those measures (see judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 149 and the case-law cited). 144 However, the importance of the objectives pursued by Decision 2014/512, namely the protection of Ukraine’s territorial integrity, sovereignty and independence, and the promotion of a peaceful settlement of the crisis in that country, the achievement of which is part of the wider objective of maintaining peace and international security, in accordance with the objectives of the Union’s external action set out in Article 21 TEU, is such as to justify the possibility that, for certain operators, which are in no way responsible for the situation which led to the adoption of the sanctions, the consequences may be negative, even significantly so (see, to that effect, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraphs 149 and 150 and the case-law cited). 145 Secondly, contrary to what is claimed by the applicant, there is a reasonable relationship between the restrictive measures concerned and the objective pursued by the Council in adopting them. In so far as that objective is, inter alia, to increase the costs to be borne by the Russian Federation for its actions to undermine Ukraine’s territorial integrity, sovereignty and independence, the approach of targeting Russian companies carrying on their business in the field of defence and armaments is consistent with that objective and cannot, in any event, be considered to be manifestly inappropriate with respect to the objective pursued (see, to that effect and by analogy, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 147). 146 Thirdly, it should be noted that the measures adopted by the Council in the present case are targeted economic sanctions, which cannot be regarded as a complete interruption of economic and financial relations with a third country, even though the Council has such a power under Article 215 TFEU. 147 In those circumstances, and having regard, in particular, to the fact that the restrictive measures adopted by the Council in reaction to the crisis in Ukraine have become progressively more severe, interference with the applicant’s freedom to conduct a business and its right to property cannot be considered to be disproportionate (see, to that effect, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 150). 148 Accordingly, the applicant is mistaken in its view that the Council should have chosen less restrictive measures in relation to the objective pursued, since those measures are specifically intended to put pressure on the Russian Federation and to increase the costs to be borne by the Russian Federation for its actions to undermine Ukraine’s territorial integrity, and it does not appear that the Council’s decision to target certain entities in the defence sector is manifestly inappropriate for the purpose of achieving that objective (see, to that effect and by analogy, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 147). 149 In the light of all these considerations, the first plea in law must be rejected, and the action dismissed in its entirety. Costs 150 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 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 Joint-Stock Company ‘Almaz-Antey’ Air and Space Defence Corp. to pay the costs. Berardis Spielmann Csehi Delivered in open court in Luxembourg on 13 September 2018. E. Coulon G. Berardis Registrar President * Language of the case: English.