62023TJ1042_RES
Case T‑1042/23
BSW – management company of ‘BMC’ holding
v
Council of the European Union
Judgment of the General Court (Fourth Chamber) of 19 March 2025
(Common foreign and security policy – Restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine – Freezing of funds – List of persons, entities and bodies subject to the freezing of funds and economic resources – Inclusion of the applicant’s name on the list – Support for the Lukashenko regime – Benefit derived from the Lukashenko regime – Undertaking belonging to the State – Error of assessment – Right to property – Freedom to conduct a business)
European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures against Belarus – Freezing of funds of certain persons and entities having regard to the situation in Belarus – Scope of the review – Obligation on the competent EU authority to establish, in the event of challenge, that the reasons relied on against the persons or entities concerned are well founded – Inclusion on the lists based on a specific, precise and consistent set of indicia
(Charter of Fundamental Rights of the European Union, Art. 47; Council Decision 2012/642/CFSP, as amended by Decision (CFSP) 2023/1592, Annex I; Council Regulations No 765/2006, Annex I, and 2023/1591)
(see paragraphs 31-33)
Common foreign and security policy – Restrictive measures against Belarus – Criteria for adopting restrictive measures – Natural or legal persons, entities or bodies benefiting from or supporting the Lukashenko regime – Concept of support for the regime – Error of assessment – None
(Council Decision 2012/642/CFSP, as amended by Decision (CFSP) 2023/1592, Annex I; Council Regulations No 765/2006, Annex I, and 2023/1591)
(see paragraphs 34-47, 62, 80)
Common foreign and security policy – Restrictive measures against Belarus – Criteria for adopting restrictive measures – Natural or legal persons, entities or bodies benefiting from or supporting the Lukashenko regime – Support for the government – Concept – Sums paid to the State, by a public entity, pursuant to State legislation imposing that payment – Included – Classification of those sums as a tax or dividend – No effect
(Council Decision 2012/642/CFSP, Art. 4(1)(b); Council Regulations No 765/2006, Art. 2(5), and No 1014/2012)
(see paragraphs 48-61)
Common foreign and security policy – Restrictive measures against Belarus – Criteria for adopting restrictive measures – Natural or legal persons, entities or bodies benefiting from or supporting the Lukashenko regime – Concept of benefit – Error of assessment – None
(Council Decision 2012/642/CFSP, as amended by Decision (CFSP) 2023/1592, Annex I; Council Regulations No 765/2006, Annex I, and 2023/1591)
(see paragraphs 63-65, 73-80)
Common foreign and security policy – Restrictive measures against Belarus – Scope – Natural or legal persons, entities or bodies benefiting from or supporting the Lukashenko regime – Concept – Persons who have committed those acts in the past, notwithstanding the lack of evidence establishing current involvement or participation in such acts – Included
(Council Decision 2012/642/CFSP, Art. 4(1)(b); Council Regulations No 765/2006, Art. 2(5), and No 1014/2012)
(see paragraph 69)
Common foreign and security policy – Restrictive measures against Belarus – Freezing of funds of certain persons and entities having regard to the situation in Belarus – Limitation of the right to property and of the freedom to conduct a business – Whether permissible – Conditions – Restriction laid down by law – Respect for the essence of the right invoked – Pursuit of an objective of general interest, recognised as such by the European Union – Observance of the principle of proportionality – Conditions met
(Charter of Fundamental Rights of the European Union, Arts 16, 17 and 52(1); Council Decision 2012/642/CFSP, as amended by Decision (CFSP) 2023/1592, Annex I; Council Regulations No 765/2006, Annex I, and 2023/1591)
(see paragraphs 91-106)
Résumé
In its judgment, the General Court dismisses the action for annulment brought by AAT Byelorussian Steel Works – management company of ‘Byelorussian Metallurgical Company’ holding (BSW – management company of ‘BMC’ holding) against the acts by which the Council of the European Union included that company in August 2023 (
1
) on the list of persons and entities subject to restrictive measures in view of the situation in Belarus and involvement of Belarus in the Russian aggression against Ukraine. It supplements the case‑law concerning the consideration – as a factor capable of demonstrating the support provided by that undertaking to the regime – of tax payments to the State by a public undertaking wholly owned by that regime.
That judgment has been delivered in the context of a series of restrictive measures adopted by the European Union since 2004 in view of the situation in Belarus with regard to democracy, the rule of law and human rights and the involvement of Belarus in the Russian aggression against Ukraine. The applicant, one of the largest undertakings in the country, is active in the field of iron and steel products. Its funds and economic resources have been frozen on the ground that it benefited from and supported the regime of President Lukashenko (
2
) and was responsible for the repression of civil society. (
3
)
Findings of the Court
As regards the plea alleging error of assessment, the Court considers that the Council did not err in finding, at the time Decision 2023/1592 and Regulation 2023/1591 were adopted, that the applicant was a substantial source of revenue for the Lukashenko regime, and for the Belarusian State which profited directly from that revenue, and that, consequently, it supported the Lukashenko regime within the meaning of Article 4(1)(b) of Decision 2012/642.
The Court notes that, in reaching the view that the applicant supports the regime, the Council took into account, inter alia, the considerable amounts of tax paid by the applicant to the Belarusian State. While it has already been held that the Council cannot infer ‘support for the regime’ from the mere payment of taxes, the Court observes that the situation in the present case is different. The case in question (
4
) concerned support for the regime by natural persons and private legal persons, who are subject to the obligation to pay taxes as a ‘legal obligation applicable to all Belarusian taxpayers’. In the present case, the applicant is a State-owned legal person, whose entire capital is held by the Republic of Belarus.
Furthermore, the Court states that the classification as a tax or dividend on the basis of which the sums are paid to the government is not decisive for the purpose of identifying ‘support for the government’. Both cases involve sums paid to the State by a public entity pursuant to State legislation imposing that payment. To exclude such payments from that concept of ‘support for the government’, on the sole ground that the sums due are classified as taxes, could make it possible to circumvent the EU rules. Clearly, an increase in the rate of tax on profits made by such entities could be put in place in return for a reduction in the amount of the dividends which national legislation requires State-owned companies to pay to the State.
In those circumstances, the State may dispose of the applicant’s income and profits by using both instruments of public law, such as taxes, and instruments derived from property law, such as dividends. The form in which the applicant’s resources will be transferred to the State also depends on the State, as legislator and owner. So far as concerns the resources received to support the regime, it is of little importance whether the State receives them in the form of taxes paid by a State-owned undertaking or of dividends, that is to say, a share of the profits of that undertaking after tax.
Moreover, as is apparent from the grounds for including the applicant’s name on the lists at issue, the applicant ‘is a unique [State] enterprise in the metallurgical industry in Belarus and among the largest companies in the country’ and, ‘as such, it is a substantial source of revenue for the Lukashenk[o] regime’. It follows that all revenue or profits generated by the applicant are likely to be paid to the State, irrespective of the form such support may take.
In the light of the foregoing, the Court finds that, in the case of an undertaking the entire capital of which is held by the State, the payment of dividends, as well as taxes, may be taken into consideration in order to establish whether it is a substantial source of revenue for the regime in the context of the analysis of possible support for that regime. It notes, in that regard, that the applicant has paid, in 2021, income tax in the amount of 11600000 United States dollars (USD), contributions to the social protection fund in the amount of USD 27900000, and real estate and land tax in the amount of USD 6780000.
(
1
)	Council Implementing Decision (CFSP) 2023/1592 of 3 August 2023 implementing Decision 2012/642/CFSP concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (OJ 2023 L 195I, p. 31) and Council Implementing Regulation (EU) 2023/1591 of 3 August 2023 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (OJ 2023 L 195I, p. 1).
(
2
)	See Article 4(1)(b) of Council Decision 2012/642/CFSP of 15 October 2012 concerning restrictive measures against Belarus (OJ 2012 L 285, p. 1) and Article 2(1) and (5) of Council Regulation (EC) No 765/2006 of 18 May 2006 concerning restrictive measures against President Lukashenko and certain officials of Belarus (OJ 2006 L 134, p. 1), as amended by Council Regulation (EU) No 1014/2012 of 6 November 2012 (OJ 2012 L 307, p. 1).
(
3
)	See Article 4(1)(a) of Decision 2012/642 and Article 2(4) of Regulation No 765/2006.
(
4
)	Judgment of 6 October 2015, Chyzh and Others v Council (T‑276/12, not published, EU:T:2015:748, paragraph 169).