Judgment — ECLI:EU:T:2014:141
Date: 2014-03-21
Language of the case: English
Court formation: Second Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for failure to act - successful;Action for failure to act - unfounded
Origin: United Kingdom

summary of reasons [of the Sanctions Committee], the competent authority of the European Union is obliged 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. In that context, it is for that authority to assess, having regard, inter alia, to the content of any such comments, whether it is necessary to seek the assistance of the Sanctions Committee and, through that committee, the Member of the UN which proposed the listing of the individual concerned on that committee’s list, in order to obtain, in that spirit of effective cooperation which, under Article 220(1) TFEU, must govern relations between the European Union and the organs of the United Nations in the fight against international terrorism, the disclosure of information or evidence, confidential or not, which would enable it to discharge its duty of careful and impartial examination. Lastly, without going so far as to require a detailed response to the comments made by the individual concerned, the obligation to state reasons laid down in Article 296 TFEU entails in all circumstances, not least when the reasons stated for the European Union measure represent reasons stated by an international body, that that statement of reasons identify the individual, specific and concrete reasons why the competent authorities consider that the individual concerned must be subject to restrictive measures. 93 Also in Kadi II, Court of Justice (paragraph 135), the Court inferred from that analysis that, for the rights of the defence and the right to effective judicial protection to be respected, first, the competent European Union authority must (i) disclose to the person concerned the summary of reasons provided by the Sanctions Committee which is the basis for listing or maintaining the listing of that person’s name on the list at issue, (ii) enable him effectively to make known his observations on that subject and (iii) examine, carefully and impartially, whether the reasons alleged are well founded, in the light of the observations presented by that person and any exculpatory evidence that may be produced by him. 94 In the present case, it is common ground that the applicant was unable to rely on any of those principles or guarantees in the context of the adoption of Regulation No 1629/2005, even after the judgment in Kadi I, Court of Justice, was delivered, until the two dates on which he, first, asked for access to the documents used by the Commission in order to justify the inclusion of his name in the list at issue, then called upon that institution to remove his name from that list. 95 In particular, according to the Commission’s letter of 23 April 2009, thus after the judgment in Kadi I, Court of Justice, was delivered, when adopting Regulation No 1629/2005, the Commission acted on the basis only of a mere Sanctions Committee press release which did not contain any statement of reasons. The Commission did not receive any other relevant document from the Sanctions Committee before 31 August 2010, when it received that committee’s statement of reasons. 96 The Commission was clearly under an obligation to act with regard to the applicant, in order to remedy those procedural and substantive irregularities, if not immediately after the Court had delivered its judgment in Kadi I, Court of Justice, or in response to the applicant’s letter of 7 March 2009, then at the very least and by the latest in reply to his letter calling upon it to act of 18 March 2010. 97 That applies with all the more force since the applicant had also referred to new and significant evidence which the Commission was at least obliged to examine, in order to assess whether it amounted to a change of circumstances such as to warrant, if appropriate, the revocation of Regulation No 1629/2005, without retroactive effect. 98 It follows that, even if the Commission took the view that the imposition on the applicant of the restrictive measures laid down by Regulation No 881/2002, as implemented by Regulation No 1629/2005, was and remained justified, in substance, in the light of the personal situation of the person concerned as apparent from the file, including the new evidence brought to its attention, it was in any case bound as soon as possible to remedy the manifest infringement of the applicable principles which occurred during the adoption of Regulation No 1629/2005, after having found that that infringement was identical, in essence, to the infringement of those same principles determined by the Court of Justice and by the General Court in their respective Kadi I and Kadi II judgments (see, to that effect, Kadi I, Court of Justice, paragraphs 373 to 376). 99 Since it is common ground that the Commission failed to respond effectively or adequately to the applicant’s letter of 18 March 2010, by which the applicant called upon it to observe those principles, relying specifically on Kadi I, Court of Justice, it must be held that the Commission was in the position of having failed to act in that regard on 18 May 2010, following the expiry of the period of two months after having been called upon to act pursuant to that letter. 100 Although the Commission later communicated to the applicant, on 10 September 2010, the statement of reasons received from the Sanctions Committee on 31 August 2010, calling upon him to submit observations in that regard, then sent those observations to the Sanctions Committee in December 2010, while initiating the procedure of review of its decision to include the applicant’s name on the list at issue provided by Regulation No 881/2002, as amended by Regulation No 1286/2009, it must be held that that failure to act continued at the time when the oral procedure closed, since the infringement referred to in paragraph 96 above had still not been adequately remedied during the review procedure. 101 In that regard, the Commission’s argument, based on the fact that it had initiated the review procedure, which was still underway, and communicated to the applicant the statement of reasons which had been sent to it by the Sanctions Committee, must be rejected. It is settled case-law that a letter emanating from an institution, stating that examination of the questions raised is in progress, does not, however, constitute the definition of a position which brings to an end a failure to act (see Joined Cases T‑344/00 and T‑345/00 CEVA and Pharmacia Entreprises v Commission [2003] ECR II‑229, paragraph 80 and the case-law cited). 102 In particular, it is not acceptable that, more than four years after the ruling in Kadi I, Court of Justice, the Commission is still not in a position to discharge its obligation to examine the applicant’s case carefully and impartially (Kadi II, Court of Justice, paragraphs 114 and 135), where appropriate in ‘effective cooperation’ with the Sanctions Committee (Kadi II, Court of Justice, paragraph 115). 103 Furthermore, according to the statements made at the hearing, the Commission continues to regard itself as strictly bound by the findings of the Sanctions Committee and as not having any discretion in that regard, in contradiction with the principles laid down by the Court in Kadi I and Kadi II, Court of Justice (in particular in paragraphs 114, 115 and 135) and by the General Court in its Kadi II judgment. 104 Accordingly, it must be held that the way in which the Commission purports, by implementing the review procedure with regard to the applicant’s case, to remedy the infringements of the same kind as those found by the Court of Justice in its judgment in Kadi I, is formal and artificial in nature. 105 On the basis of the foregoing, the first two pleas in law, alleging respectively a failure by the Commission to act in relation to the review to be carried out by it of the findings of the Sanctions Committee and a similar failure of that institution to observe the applicant’s fundamental rights, in the procedure concerning the freezing of his funds, must be regarded as well founded. 106 That being the case, the extent of that failure to act must be determined. 107 As the Court of Justice already held in paragraph 374 of Kadi I, it cannot be excluded that, on the merits of the case, the retention of the applicant’s name on the list at issue may for all that prove to be justified, even in the light of the new evidence which the Commission must take into consideration. The failure to act held to have occurred does not therefore consist, as argued by the applicant, in a failure to revoke Regulation No 1629/2005, but in a more limited failure to observe the principles which apply in the procedure followed in the review of the applicant’s situation which has been requested. 108 Thus, the applicant’s first claim is to be upheld only in part, in holding that the Commission’s failure to remedy the procedural deficiencies and substantive irregularities affecting the freezing of his funds is unlawful. 109 Accordingly, the third plea must be rejected. Costs 110 Under Article 87(2) 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 Commission has, in essence, failed in its submissions and the applicant has applied for costs, the Commission must be ordered to pay the costs. 111 Under the first subparagraph of Article 87(4) of the Rules of Procedure, institutions which have intervened in the proceedings are to bear their own costs. The Council must therefore be ordered to bear its own costs. 112 In accordance with Article 97(3) of the Rules of Procedure, the applicant having been granted legal aid and the Court having ordered the Commission to pay the costs incurred by the applicant, the Commission will be required to refund to the Court cashier the sums advanced by way of legal aid. On those grounds, THE GENERAL COURT (Second Chamber) hereby: 1. Declares that the European Commission has failed to fulfil its obligations under the FEU Treaty and under Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (EC) No 467/2001, by not remedying the procedural deficiencies and substantive irregularities affecting the freezing of the funds of Mr Hani El Sayyed Elsebai Yusef; 2. Dismisses the action as to the remainder; 3. Orders the Commission to pay, apart from its own costs, the costs incurred by Mr Yusef and the sums advanced by way of legal aid by the cashier of the Court; 4. Orders the Council of the European Union to bear its own costs. Forwood Dehousse Schwarcz Delivered in open court in Luxembourg on 21 March 2014. [Signatures] * Language of the case: English.