Judgment — ECLI:EU:T:2017:669
Date: 2017-09-27
Language of the case: English
Court formation: Fourth Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for annulment - unfounded

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 (see, to that effect, 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). 79 It is the task of the competent European Union authority to establish, in the event of challenge, that the reasons relied on against the person or entity concerned are well founded, and not the task of that person or entity to adduce evidence of the negative, that those reasons are not well founded. It is necessary that the information or evidence produced should support the reasons relied on against the person or entity concerned. If that material is insufficient to allow a finding that a reason is well founded, the Courts of the European Union are to disregard that reason as a possible basis for the contested decision to list or maintain a listing (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, paragraphs 121 to 123). 80 In the present case, the contested decision maintains the applicant’s name on the lists on the ground that it ‘benefits from the regime as a main exporter of arms and military equipment in Belarus, which requires authorisation from the Belarusian authorities’. 81 Moreover, it should be recalled that, in its letter of 8 June 2015, the Council explained the factors which led it to consider that the applicant was benefiting from the regime of President Lukashenko. First, it is contended, that regime supports the applicant’s risks through the reinsurance company concerned. Secondly, that regime, through the Belarusian Ministry of Defence, facilitates the applicant’s commercial transactions. Third, the applicant is licensed to import and export weapons, including complex weapons, and to sell state-owned arms. 82 It is clear from the combined reading of the contested decision and the letter of 8 June 2015 that the applicant’s name was kept on the lists on the grounds that the latter benefited from the regime of President Lukashenko, in the light of the three factual circumstances referred to in that letter. 83 It is therefore necessary to examine whether the three factual circumstances mentioned in the letter of 8 June 2015 were proven to the requisite legal standard and, for those which have been, whether, jointly or separately, they lead to the conclusion that the applicant ‘benefit[ed] from the regime as a main exporter of arms and military equipment in Belarus, which require[ed] authorisation from the Belarusian authorities’, as indicated in the contested decision. – The applicant’s risk cover by the reinsurance company concerned 84 It is apparent from the letter of 8 June 2015 that the Council considered that the reinsurance company concerned, of which the Council of Ministers of the Republic of Belarus is the founder, and whose activity is coordinated by an advisory board set up by the Belarusian Government and chaired by the Deputy Minister for Finance, had provided reinsurance coverage to the applicant. 85 The applicant does not deny that the reinsurance company concerned is owned by the Belarusian State or that it has provided the applicant with reinsurance cover. On the contrary, in the application itself, it is apparent from the documents provided by the Council that, in 2008, that company provided reinsurance cover under insurance contracts in which it is a contracting party. 86 The applicant merely points out that it did not directly enter into a reinsurance contract with the reinsurance company concerned, which was solely in contact with its insurers, that it was not aware of that company and that it did not receive payments directly from that company. As the Council contends, those circumstances are not such as to call into question the fact that it benefited, even indirectly, from reinsurance cover provided by the company in question. 87 However, as the applicant indicates, the evidence of the company’s coverage of its risks relates only to the year 2008. In the reply, the applicant submits that the Council ‘itself is persuaded that [the] reinsurance contract (that [was] only for the year 2008) still provides benefits to the applicant’. 88 It must be held that, in its pleadings, the Council does not reply to that argument of the applicant. There is no evidence in the file that, at the time of adoption of the contested decision, the reinsurance contract still benefited the applicant, which the Council did not contest in reply to a question put by the Court at the hearing. 89 In those circumstances, it must be held that the Council failed to establish, to the requisite legal standard, the applicant’s risk cover by the reinsurance company concerned, which it relied on in its letter of 8 June 2015. – The facilitation by the regime of President Lukashenko, through the Belarusian Ministry of Defence, of transactions which benefit the applicant 90 It is apparent from the letter of 8 June 2015 that the Council considered that the Belarusian Government had, through the Belarusian Ministry of Defence, facilitated cooperation between the Russian and Belarusian companies, including the applicant, in the areas of repair, modernisation and creation of automatic control systems, aviation and defence equipment. 91 It should first be noted that the applicant does not dispute that the Belarusian Ministry of Defence facilitated cooperation between it and the Russian companies. The applicant merely asserts, on the basis of the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), that, taking into account the regulated nature of the relevant sector of activity, the Council should have submitted evidence that the Belarusian Ministry of Defence had provided it with a ‘particular advantage’, which it did not do. 92 In that regard, it should be noted that, in the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), the General Court held that the fact that the trade in defence products is a regulated sector, in which it is inherent that there are relations between the applicant and the State authorities, cannot demonstrate, as such, that it supported the regime of President Lukashenko financially. ‘Support’ for that regime is a criterion for inclusion on the lists that is separate from the criterion of ‘benefit’ from that regime, as is apparent both from Article 2(1)(b) of Council Decision 2010/639/CFSP of 25 October 2010, concerning restrictive measures against certain officials of Belarus (OJ 2010 L 280, p. 18), as amended by Council Decision 2011/69/CFSP of 31 January 2011 (OJ 2011 L 28, p. 40), applicable in the case which gave rise to the judgment referred to above, and from Article 4(1)(b) of Decision 2012/642, applicable in the present case. The applicant cannot, therefore, rely on the abovementioned judgment in order to claim, in the present case, that it does not benefit from the regime in question. 93 It should also be noted that, contrary to the applicant’s claims, the Council did not merely infer from the fact that the applicant operated in a regulated sector the conclusion that it benefited from the regime of President Lukashenko. Moreover, the regulated nature of the sector in which the applicant operates, taken in isolation, cannot suffice to establish that it benefits from that regime (see, by analogy, judgment of 12 May 2015, Ternavsky v Council, T‑163/12, not published, EU:T:2015:271, paragraphs 120 and 121). As the Council pointed out in response to a question from the Court at the hearing, it must be held, in the present case, that, in a country such as Belarus, activities of the magnitude of those of the applicant, which is presented by the contested decision as ‘a main exporter of arms and military equipment in Belarus’, and sustained over time, as is the case for the applicant, are not possible without the endorsement of that regime. 94 In those circumstances, it must be held that the Council has established, to the requisite legal standard, facilitation by the regime of President Lukashenko, through the Belarusian Ministry of Defence, of transactions which benefit the applicant. 95 That conclusion is not called into question by the applicant’s argument that the evidence provided by the Council relates to cooperation which goes back to 2005. The Council has produced several documents showing the existence of longer-term cooperation. First, a copy of the website of a Russian industrial investment group in the sectors of engineering and advanced technology, dated 5 September 2005, shows, it is contended, that the Republic of Belarus and the Russian Federation established joint ventures for the repair, modernisation and construction of automatic control systems, aviation equipment and air defence equipment. Next, it is apparent from a copy of the website of the Russian agency responsible for exports of defence-related products, dated 8 July 2014, that that agency intended to examine with its Belarusian partners future projects on behalf of third countries and, in particular, that discussions were foreseen with representatives of the Belarusian Military-Industrial Committee, special exporters such as the applicant and other companies, concerning current projects as well as on promising areas of cooperation in foreign markets. However, neither in its pleadings nor at the hearing was the applicant able to establish that this evidence submitted by the Council, which shows that cooperation still existed at the date of adoption of the contested decision, was incorrect. 96 Finally, the fact that the names of other Belarusian companies participating in cooperation projects with Russian companies were not included on the lists cannot cast doubt on the facilitation by the regime of President Lukashenko, through the Belarusian Ministry of Defence, of transactions for the benefit of the applicant, since the principle of equal treatment must be reconciled with the principle of legality, according to which no one may rely, to his own benefit, on an unlawful act committed in favour of another (see judgment of 14 October 2009, Bank Melli Iran v Council, T‑390/08, EU:T:2009:401, paragraph 59 and the case-law cited). – The licences granted to the applicant to import and export weapons, including complex weapons, and to sell state-owned arms 97 It is apparent from the letter of 8 June 2015 that the Council considered that the applicant was licensed to import and export weapons, including complex weapons, and to sell arms owned by the Belarusian State. 98 It is clear that the applicant does not dispute the existence of the licences in question. It merely notes that it obtained those licences before Mr Lukashenko was inaugurated as President of the Republic of Belarus, that it has no special association with the ruling personalities, that other companies also obtained such licences, that its activities consisted mainly of exports and that it merely complied with Belarusian law which makes the exercise of particular business activities subject to licensing. However, those circumstances are not such as to call into question the existence of licences in favour of the applicant. 99 First, as the Council states, even if the applicant had obtained the licences before Mr Lukashenko came to power, it should be noted that those licences continued for more than 20 years after Mr Lukashenko took up office and served as President of the Republic of Belarus, which the applicant does not dispute in the reply. Secondly, even assuming that, as the applicant observes, 90% of its activities were in exports, that does not in any way contradict the continued listing of its name on the ground that it ‘benefits from the regime as a main exporter of arms and military equipment in Belarus’. Thirdly, for the same reasons as those given in paragraph 96 above, the fact that the names of other companies which had obtained the same licences as the applicant do not appear on the lists cannot call into question the licences granted to the applicant to import and export arms, including complex weapons, and to sell arms belonging to the Belarusian State. 100 However, in view of the regulated nature of the sector in which the applicant operated, it must be noted that licences were required for it to carry out its activities. As such, the fact that the applicant was licensed to import and export weapons, including complex weapons, and to sell arms belonging to the Belarusian State does not establish that it benefited from the regime of President Lukashenko. That ground must be considered in the light of the applicant’s specific characteristics, which is presented by the contested decision as one of the principal exporters of arms and military equipment, and of its activities, the magnitude and continuity of which would not have been possible in a country such as Belarus without the endorsement of the regime of President Lukashenko (see paragraph 93 above). 101 In the light of the considerations set out in paragraphs 90 to 100 above, it must be concluded that, by the contested decision, the Council maintained the applicant’s name on the lists without making an error of assessment. 102 The third plea in law must therefore be rejected. Fourth plea in law, alleging infringement of the right to property 103 The applicant claims that the contested decision, which was adopted without compelling evidence and in breach of its rights of defence infringe its right to property provided for under Article 17 of the Charter of Fundamental Rights and Article 1 of Protocol No 1 of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950. 104 The freezing of funds constitutes a restriction on the right to property which must be justified and which, it is claimed, has not been justified in the present case. Even assuming that that restriction may be justified, the applicant claims that that restriction can only be applied if the applicant is given a guarantee that it can present its case to the competent authorities, which is also not the case in this instance. 105 The Council contends, in essence, that the applicant’s right to property was in no way limited by the contested decision, as the restrictive measures were suspended in respect of the applicant. 106 It should be noted that the applicant establishes a connection between the present plea and the pleas alleging ‘manifest error of assessment’ and infringement of its rights of defence. As is apparent from paragraphs 61 to 68 and from paragraphs 80 to 102 above, however, those pleas must be rejected as unfounded. 107 In any event, it must be recalled that, although the Council, by the contested decision, extended the inclusion of the applicant’s name on the lists, it also decided to suspend application of the restrictive measures against it. Accordingly, as the Council points out, the applicant’s allegation that the restrictive measures prevented it from using European Union financial instruments or making payments via euro accounts is incorrect, which, moreover, the applicant did not deny either in the reply or at the hearing. 108 Consequently, the applicant cannot validly claim that its right to property was infringed. 109 It follows that the fourth plea must be rejected and, consequently, the action must be dismissed in its entirety. Costs 110 Under Article 134(1) of the Rules of Procedure of the General Court, 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. 111 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 (Fourth Chamber) hereby: 1. Dismisses the action; 2. Orders BelTechExport ZAO to bear its own costs and pay those incurred by the Council of the European Union; 3. Orders the European Commission to bear its own costs. Kanninen Schwarcz Iliopoulos Delivered in open court in Luxembourg on 27 September 2017. E. Coulon H. Kanninen Registrar President * Language of the case: English.