Judgment;Abstract — ECLI:EU:T:2019:37
Date: 2019-01-30
Language of the case: English
Court formation: Sixth Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for annulment - successful
Origin: Belgium

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 by sufficiently specific and concrete evidence (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 82 and the case-law cited). 83 According to the case-law, 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 (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 83 and the case-law cited). 84 In that regard, it should be recalled that, as was observed in paragraph 75 above, the PGO is one of the highest Ukrainian judicial authorities. 85 Admittedly, it fell, in the present case, to the Council to examine carefully and impartially the evidence provided to it by the Ukrainian authorities, in the light, in particular, of the observations and any exculpatory evidence submitted by the applicant. Moreover, in the context of the adoption of restrictive measures, the Council is under an obligation to observe the principle of good administration enshrined in Article 41 of the Charter, which, according to settled case-law, entails the obligation for the competent institution to examine carefully and impartially all the relevant aspects of the individual case (see, to that effect, judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 85 and the case-law cited). 86 However, it is also apparent from the case-law that, in order to assess the nature, form and degree of the proof that the Council may be asked to provide, the nature, specific scope and the objective of the restrictive measures must be taken into account (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 86 and the case-law cited). 87 In that regard, as is apparent from recitals 1 and 2 of Decision 2014/119 (see paragraph 3 above), 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 judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 87 and the case-law cited). 88 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. Facilitating the recovery of those funds consolidates and supports the rule of law in Ukraine (see paragraphs 68 to 72 above). 89 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 those funds. They are therefore purely precautionary (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 89 and the case-law cited). 90 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 judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 90 and the case-law cited). 91 In the present case, what the Council must ascertain is, first, to what extent the information from the PGO on which it relied prove that, as indicated by the grounds for including the applicant’s name on the list at issue, 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 relevant criterion. Only if those investigations were not successful would it, in the light of the case-law referred to in paragraph 85 above, be incumbent on the Council to investigate further (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 91 and the case-law cited). 92 Furthermore, in the context of the cooperation governed by the contested measures (see paragraph 87 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 89 above, in adopting the contested measures, 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. Furthermore, as is apparent from paragraph 90 above, the Council’s obligations under the contested measures cannot be treated in the same way as those of a national judicial authority of a Member State in the context of asset-freezing criminal proceedings initiated, in particular, in the context of international cooperation in criminal matters (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 92 and the case-law cited). 93 That interpretation is confirmed by paragraph 77 of the judgment of 5 March 2015, Ezz and Others v Council (C‑220/14 P, EU:C:2015:147), in which the Court of Justice held, in circumstances similar to those of the present case, that it was not for the Council or the General Court to verify whether the investigations to which the appellants were subject were well founded, but only to verify whether that was the case as regards the decision to freeze funds in the light of the Egyptian authorities’ request for assistance. 94 It is true that the Council cannot adopt, in all circumstances, the findings made by the Ukrainian judicial authorities in the documents provided by those authorities. 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 judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 94 and the case-law cited). 95 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. 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 mentioned in the letters from the PGO 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 judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 95 and the case-law cited). 96 It is in the light of those considerations that the applicant’s specific arguments must be assessed. Whether the information provided by the PGO is sufficient 97 In the first place, the applicant asserts that the burden of proof lies with the Council when it adopts restrictive measures against a person and that any decision taken in that context must have a sufficiently solid factual basis from which it is possible to establish the existence of criminal proceedings concerning that person in relation to acts, described in detail, classifiable as misappropriation of public funds and capable of undermining the institutional and legal foundations of Ukraine. In that context, the applicant states that the misappropriation of funds of which he is accused in the PGO’s letters on which the Council relied, particularly its letter of 25 July 2016, relates to real property which, by its very nature, remains in Ukraine and cannot be moved abroad. That letter does not provide enough detail and does not explain how the applicant could have obtained the sum of [confidential] Ukrainian hryvnias (UAH) mentioned therein. Therefore, the alleged misappropriation could only be tackled through action by the Ukrainian authorities, with the result that it is unaffected by the freezing of the applicant’s funds decided by the Council. 98 The applicant adds that the Council cannot base any relevant arguments on the fact that the PGO’s letter of 25 July 2016 states that, during the investigation, property [confidential] was seized at the investigator’s request, by decisions of the District Court [confidential] (‘the District Court’) in 2014 and 2015. The only information directly concerning the applicant relates to the seizure [confidential], which does not provide compelling support for criminal proceedings in relation to the alleged misappropriation of real property valued at UAH [confidential]. 99 The Council, supported by the Commission, argues that the misappropriation of funds of which the applicant is accused caused a loss to the Ukrainian State’s public funds or assets. The Ukrainian State is deprived of its rights of ownership, use and enjoyment of the misappropriated funds or assets, including possible revenue generated by them, until such time as the misappropriation has been undone, for example by a court decision that has become final. Furthermore, the Council states that, by order of 3 October 2014, the District Court ordered the seizure [confidential]. 100 It is common ground between the parties that, when adopting the contested measures, the Council essentially relied on the information contained in the letter from the PGO of 25 July 2016 and on the PGO’s answers. 101 In that regard, it should be recalled that that letter contains the information set out in paragraph 49 above. 102 The PGO also stated that the acts described in the letter in question correspond to the criminal offence defined in Article 191(5) of the Ukrainian Criminal Code, which concerns the misappropriation of somebody else’s property when committed by a group of persons by prior conspiracy, in relation to a particularly large amount. 103 Moreover, the PGO observed that, during the investigation, property [confidential] was seized at the investigator’s request, by decisions of the District Court of 2014 and 2015. 104 Accordingly, it must be found that, when it adopted the contested measures, the Council had sufficiently precise information in relation to the infringement of which the applicant was suspected and the state of the proceedings relating to that infringement. 105 As regards the applicant’s argument relating to the fact that, in the present case, misappropriation of real property is alleged, which cannot, by its very nature, be moved outside of Ukraine, it should be observed that the relevant criterion does not provide that, for a person to be listed, there must be a risk that the public funds that that person is suspected of having misappropriated are moved abroad. Thus, the reference to the misappropriation of public funds, if it is well founded, is sufficient, in itself, to justify the restrictive measures against the applicant (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 106 and the case-law cited). 106 In that regard, it follows from the case-law that the concept of misappropriation of public funds covers any act consisting in the unlawful use of resources belonging to public authorities, or which are placed under their control, for purposes which run counter to those planned for the resources, in particular for private purposes. To fall within the scope of that concept, that use must have been prejudicial to the financial interests of these authorities, and therefore have caused damage which can be assessed in financial terms (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 107 and the case-law cited). 107 That broad interpretation of the concept at issue is necessary in order to ensure the full effectiveness of Decision 2014/119 with a view to achieving its objectives of consolidating the rule of law in Ukraine. Taking into account, moreover, the purely precautionary nature of the measure at issue, the general principle of European Union law of the legality of offences and penalties, enshrined in the first sentence of Article 49(1) of the Charter, and that of the presumption of innocence, enshrined in Article 48(1) of the Charter, are not applicable in the present case and cannot, therefore, preclude such a broad interpretation (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 109 and the case-law cited). 108 In the present case, as the Council correctly observes, the misappropriation of public funds or assets described in the letter of 25 July 2016, as long as it lasts and has not been undone, for example pursuant to a court decision which has become final, causes a loss to the Ukrainian State which is deprived of the ownership of the misappropriated funds or assets and of the use and enjoyment thereof, including possible revenue generated thereby (see, to that effect, judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 110 and the case-law cited). 109 The fact that, as a result of the restrictive measures provided for in the contested measures, the applicant’s funds in the European Union are provisionally frozen helps to facilitate the Ukrainian authorities’ task of recovering misappropriated public funds and assets, in the event that the applicant is found guilty, and supplements the measures adopted at the national level, such as the seizure of the property ordered by the District Court (see paragraph 103 above) (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 111 and the case-law cited). 110 Indeed, in the event that the accusations against the applicant are recognised as well founded by the Ukrainian courts and that those courts order the recovery of the misappropriated funds, such recovery could be effected, in particular, by using the funds that the applicant might have placed in the European Union. In that regard, it is irrelevant whether those possible funds originate in the transaction which is the subject of the investigation relating to the applicant, given that what matters is to facilitate the Ukrainian State’s recovery of funds from which it should never have been separated (see judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 112 and the case-law cited). 111 In the light of the foregoing, those arguments of the applicant must be rejected. 112 In the second place, the applicant recalls that he argued before the Council that the conduct of which he is accused in the PGO’s letter of 25 July 2016 dated back to 2006 and 2007 and had already been examined in 2008 by Ukrainian courts, which had found no evidence of unlawfulness. According to the applicant, although it is true that the Council responded to those arguments by putting questions to the PGO in that regard, the latter’s replies were not satisfactory, particularly as regards observance of the principle ne bis in idem, so that the Council was not entitled to find that it had sufficient evidence to justify maintaining his name on the list at issue. In addition, the applicant claims that the Council cannot criticise him for not producing any documentation in support of his arguments, since it is for the Council to satisfy itself that it has a sufficiently solid factual basis. 113 The Council, supported by the Commission, recalls that the applicant did not produce the relevant court decisions when he claimed that the conduct of which he was accused had already been examined by Ukrainian courts. The Council submits that it was proactive in so far as it requested additional information from the PGO, which, in its answers to the Council’s questions, provided the necessary details and stated, in particular, that the conduct at issue had not been assessed from a criminal law perspective. The principle ne bis in idem therefore does not apply. Accordingly, the Council had a sufficiently solid factual basis to justify maintaining the restrictive measures against the applicant. 114 It must be recalled that, following the arguments that the applicant had put forward in the case which gave rise to the judgment of 22 March 2018, Stavytskyi v Council (T‑242/16, not published, EU:T:2018:166), the Council sent certain questions to the PGO, in particular in order to ascertain whether, as the applicant claimed, the acts alleged against him in the criminal proceedings referred to in a letter from the PGO of 30 November 2015, which are the same proceedings as those referred to in the letter of 25 July 2016, related to the period from 2006 to 2007 and had already been examined by the Ukrainian courts. 115 The PGO’s answers to the Council’s questions are to be found in a Working Paper of the Council of 16 November 2016. According to that paper, first, the property transaction linked to the misappropriation of public funds alleged against the applicant took place during 2006 and 2007 and was given concrete form by an exchange agreement [confidential]: [confidential] [confidential] [confidential] 116 After he had received the PGO’s answers from the Council, the applicant, by letter of 13 January 2017, replied, inter alia, that the exchange agreement [confidential] had been recognised as legal by several decisions of Ukrainian courts in 2008 and 2009, [confidential] and by the District Court, which all found that there had been no unlawfulness. Moreover, the applicant stated that, in 2009, the PGO had ascertained that the acts undertaken, in particular by him, during the conclusion of that agreement were legitimate and recognised that there had been no unlawfulness. 117 It is common ground between the parties that, on reading the applicant’s letter of 13 January 2017, the Council did not request further information from the PGO. In that regard, the Council contends that it was entitled to confine itself to relying on the allegedly detailed information with which the PGO had already provided it, since the applicant had not appended to his letter the court decisions which he mentioned in that letter. 118 For his part, the applicant is of the opinion that the PGO’s replies were very general and uninformative. According to the applicant, although the PGO confirmed that the alleged actions of the applicant, which took place in 2006 and 2007, were subsequently found to be legal, the PGO asserts that the currently ongoing investigation has provided evidence of guilt, without specifying any facts concerning that investigation. Moreover, the PGO does not state the reasons why the new investigation is compatible with the principle ne bis in idem. 119 In that regard, it must be held that, in the light of the matters raised by the applicant, the Council was required to re-contact the PGO, in accordance with the principles set out in paragraphs 94 and 95 above. 120 Contrary to what the Council contends, the material in its possession did not enable it to rule out that the criminal proceedings on which it relied to maintain the restrictive measures concerning the applicant conflicted with the principle ne bis in idem. 121 In that context, first, it should be pointed out that, in the letter of 13 January 2017, the applicant referred not only to decisions of economic or administrative courts, but also to a decision of the District Court, that is the same court which is mentioned in the letter from the PGO of 25 July 2016. 122 [Confidential] 123 Third, it should be recalled that the principle ne bis in idem is a general principle of EU law, which is applicable regardless of any legislative provision (judgment of 18 October 2001, X v ECB, T‑333/99, EU:T:2001:251, paragraph 149). 124 As regards the courts of the Member States, that principle is recognised in Article 50 of the Charter. 125 Moreover, reference must be made to Article 4 of Protocol No 7 to the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, entitled ‘Right not to be tried or punished twice’, which provides: ‘1. No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State. 2. The provisions of the preceding paragraph shall not prevent the reopening of the case in accordance with the law and the penal procedure of the State concerned, if there is evidence of new or newly discovered facts, or if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the case.’ 126 In that regard, it should be pointed out that that protocol is applicable to Ukraine. 127 According to the case-law, it is possible that a decision of an authority, required to play a part in the administration of criminal justice in the national legal system concerned, to discontinue criminal proceedings against an accused, subject to certain conditions, means that further prosecution is definitively time-barred. In such a case, the situation of the person concerned must be considered to fall within the scope of the principle ne bis in idem, notwithstanding the fact that no court is involved in such a procedure and that the decision in which the procedure culminates does not take the form of a judicial decision (see, to that effect, judgment of 11 February 2003, Gözütok and Brügge, C‑187/01 and C‑385/01, EU:C:2003:87, paragraphs 27 to 31). However, the principle ne bis in idem does not fall to be applied to a decision by which an authority of a State, after examining the merits of the case brought before it, makes an order, at a stage before the charging of a person suspected of a crime, suspending the criminal proceedings, where the suspension decision does not, under the national law of that State, definitively bar further prosecution and therefore does not preclude new criminal proceedings, in respect of the same acts, in that State (see, to that effect, judgment of 22 December 2008, Turanský, C‑491/07, EU:C:2008:768, paragraph 45). 128 In the light of the foregoing observations, it must be held that the information that the Council had in its possession, on the basis of the PGO’s answers, when it adopted the contested measures did not enable it to establish whether the criminal proceedings concerning the applicant, whose existence formed the basis for maintaining the restrictive measures against him, conflicted with the principle ne bis in idem, given that the Council did not know the content of the decision of the District Court and of the decisions of the PGO mentioned by the applicant in its letter of 13 January 2017. 129 Although it is not for the Council to determine whether the ongoing criminal proceedings in Ukraine (see paragraphs 91 to 93 above) are well founded, nor to assess whether those proceedings comply with the procedural rules applicable under Ukrainian law (judgment of 22 March 2018, Stavytskyi v Council, T‑242/16, not published, EU:T:2018:166, paragraph 134), the Council is nevertheless required to ensure that the criminal proceedings on which it relies to maintain the restrictive measures against a person does not conflict with the principle ne bis in idem, provided that the person concerned provides it with evidence capable of giving rise to doubt in that regard. 130 Whilst it is true that, in his letter of 13 January 2017, the applicant did not expressly refer to the principle ne bis in idem nor submitted decisions of the Ukrainian authorities capable of showing that the proceedings to which he is currently subject conflict with that principle, the fact remains that the information that he provided was sufficient to give rise to the obligation for the Council to request further information from the PGO, in view also of the content of the answers that the latter had already provided it with and which mentioned, inter alia, the fact that the bodies responsible for bringing the proceedings had decided not to launch any criminal investigation (see paragraph 116 above). 131 In that context, it must be noted that the issue is not whether, in the light of the information provided to the Council, the Council was required to remove the applicant’s name from the list, on account of the fact that the criminal proceedings concerning him infringed the principle ne bis in idem, but only whether it was required to take that evidence into account and to carry out additional verifications or seek clarification from the Ukrainian authorities. Accordingly, it is sufficient that the evidence be capable of giving rise to legitimate doubts regarding the conduct of the investigation and the adequacy of the information provided by the PGO (see, to that effect, judgment of 21 February 2018, Klyuyev v Council, T‑731/15, EU:T:2018:90, paragraph 242). 132 Moreover, it should be observed that, at the time when the contested measures were adopted, the applicant had been the subject of the restrictive measures at issue for several years, on account also of the same criminal proceedings brought by the PGO. In such a context (i) the PGO had, in principle, to be capable of providing the Council with all additional information that it might have needed and (ii) the Council had to consider itself to be more required to explore in greater detail the question of a possible breach of a fundamental principle, such as the principle ne bis in idem, by the Ukrainian authorities to the detriment of the applicant. 133 In the light of the foregoing considerations, it must be held that the Council made a manifest error of assessment by adopting the contested measures without requesting further information from the Ukrainian authorities; this is sufficient to annul those measures so far as concerns the applicant, and there is no need to consider his other arguments. 134 With respect to the Council’s alternative claim, (see paragraph 36, second indent, above), seeking, in essence, that the effects of Decision 2017/381 be maintained until the expiry of the period of time allowed for bringing an appeal and, in the event that an appeal is lodged, until the decision ruling on that appeal, it is sufficient to observe that Decision 2017/381 was effective only until 6 March 2018. Consequently, the annulment of that decision by this judgment has no effect on the period after that date, so that it is not necessary to rule on the question of maintaining the effects of that decision (see judgment of 6 June 2018, Arbuzov v Council, T‑258/17, EU:T:2018:331, paragraph 107 and the case-law cited). Costs 135 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. 136 In accordance with Article 138(1) of the Rules of Procedure, the institutions which have intervened in the proceedings are to bear their own costs. The Commission must therefore bear its own costs. On those grounds, THE GENERAL COURT (Sixth Chamber) hereby: 1. Annuls 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 Mr Edward Stavytskyi’s name 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 Stavytskyi; 3. Orders the European Commission to bear its own costs. Berardis Spielmann Csehi Delivered in open court in Luxembourg on 30 January 2019. E. Coulon G. Berardis Registrar President * Language of the case: English. 1 Confidential information omitted.