62022CJ0351_RES
Case C‑351/22
Neves 77 Solutions SRL
v
Agenția Națională de Administrare Fiscală – Direcția Generală Antifraudă Fiscală
(Request for a preliminary ruling from the Tribunalul București)
Judgment of the Court (Grand Chamber) of 10 September 2024
(Reference for a preliminary ruling – Common Foreign and Security Policy (CFSP) – Restrictive measures adopted in view of the actions of the Russian Federation destabilising the situation in Ukraine – Decision 2014/512/CFSP – Article 2(2)(a) – Jurisdiction of the Court – Final sentence of the second subparagraph of Article 24(1) TEU – Article 275 TFEU – Article 215 TFEU – Article 17 of the Charter of Fundamental Rights of the European Union – Right to property – Principle of legal certainty and principle that penalties must be defined by law – Brokering services in relation to military equipment – Prohibition on providing such services – Failure to notify the competent national authorities – Administrative offence – Fine – Automatic confiscation of the amounts received in consideration for the prohibited transaction)
Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Prohibition on providing brokering services in relation to military equipment – Judicial review of legality – Scope – Provision of general scope not relating to an individual restrictive measure
(Art. 275, second para. TFEU; Council Decision 2014/512/CFSP as amended by Decision 2014/659/CFSP, Art. 2(2)(a); Council Regulation No 833/2014)
(see paragraphs 37, 39)
Questions referred for a preliminary ruling – Jurisdiction of the Court – Interpretation of provisions of general scope of a decision providing for the interruption or reduction, in part or completely, of economic and financial relations with one or more third countries – Scope – Provisions concerning measures necessary to give effect to that decision – Not implemented by the Council – Provisions forming the basis for a national sanction adopted against a third party – Included
(Arts 2, 19, 21, 24 and 40 TEU; Arts 215(1) and 267 TFEU; Council Decision 2014/512/CFSP as amended by Decision 2014/659/CFSP, Art. 2(2)(a))
(see paragraphs 44-53, 56, 57, 60, 61)
Common foreign and security policy – Restrictive measures taken in view of the situation in Ukraine – Scope – Prohibition on providing brokering services in relation to military equipment – Included – Equipment that was never imported into the territory of a Member State – Irrelevant
(Council Decision 2014/512/CFSP as amended by Decision 2014/659/CFSP, Art. 2(2)(a))
(see paragraphs 64, 65, 71, operative part 1)
Fundamental rights – Charter of Fundamental Rights – Right to property – Scope
(Charter of Fundamental Rights of the European Union, Arts 17(1) and 52(3))
(see paragraphs 82-84)
Common foreign and security policy – Restrictive measures taken in view of the situation in Ukraine – Prohibition on providing brokering services in relation to military equipment – Breach of the prohibition – Failure to notify the competent national authorities of that provision – Automatic confiscation of the entire proceeds of that transaction – Whether permissible – Conditions
(Charter of Fundamental Rights of the European Union, Arts 17(1) and 52(1); Council Common Position 2008/944/CFSP, Art. 12; Council Decision 2014/512/CFSP as amended by Decision 2014/659/CFSP, Art. 2(2)(a))
(see paragraphs 87-95, 101, 107, operative part 2)
Résumé
The Tribunalul București (Regional Court, Bucharest, Romania) made a reference for a preliminary ruling to the Court, which specifies the scope of the limitations of its jurisdiction in Common Foreign and Security Policy (CFSP) matters. (
1
) Moreover, it rules on the scope of the prohibition on providing brokering services in relation to military equipment laid down in Article 2(2)(a) of Decision 2014/512/CFSP (
2
) concerning restrictive measures adopted by the Council of the European Union in view of Russia’s actions destabilising the situation in Ukraine.
The main activity of the Romanian company Neves 77 Solutions SRL (‘Neves’) is brokering in the sale of products in the field of aviation.
In 2019, Neves entered into a contract with the Ukrainian company SFTE Spetstechnoexport (‘SFTE’) to transfer the property rights of 32 radio sets to be delivered to the United Arab Emirates. After having purchased those radio sets, 20 of which were manufactured in Russia and exported to the United Arab Emirates, from a Portuguese company, Neves transferred them, at SFTE’s request, to an Indian company.
Considering, inter alia, that that brokering transaction infringed Article 2(2)(a) of Decision 2014/512, the Romanian tax authority drew up, in 2020, an infringement notice imposing on Neves a penalty and the confiscation of the amounts received in consideration for that transaction.
Neves brought an action for annulment of that notice before the Judecătoria Sectorului 1 București (Court of First Instance, Sector 1, Bucharest, Romania), which dismissed the action. Neves then appealed against that judgment before the Regional Court, Bucharest, the referring court.
Findings of the Court
Regarding the Court’s jurisdiction to interpret Article 2(2)(a) of Decision 2014/512, the Court finds, first of all, that that provision establishes a restrictive measure of general scope forming the basis for a national sanction. Although the Court’s jurisdiction is not in any way limited regarding a regulation adopted on the basis of Article 215 TFEU, which gives effect to EU positions taken in CFSP matters, the prohibition on providing brokering services laid down in Article 2(2)(a) had not been implemented in a regulation at the time of the facts in the main proceedings.
However, in the first place, in monitoring compliance with the first paragraph of Article 40 TEU, (
3
) the Court must ensure, in particular, that, regarding the implementation of Article 215 TFEU, the Council cannot circumvent the Court’s jurisdiction regarding a regulation under that article. In that regard, it is apparent from the clear wording of Article 215(1) TFEU that it falls to the Council to adopt the necessary measures to give effect to a CFSP decision setting out the European Union’s position regarding the interruption or reduction of economic and financial relations with a third country. That institution therefore has, in the situation covered by that paragraph 1, circumscribed powers.
In the second place, the possibility provided for by the Treaties of making a reference to the Court for a preliminary ruling regarding a regulation adopted on the basis of Article 215(1) TFEU must be available in respect of all the provisions that the Council should have included in such a regulation and which form the basis for a national sanction adopted against third parties. That interpretation makes it possible to ensure the uniform application of EU law by the national courts and tribunals and the necessary consistency of the system of judicial protection provided for by EU law. The preliminary ruling procedure, (
4
) which is the keystone of the judicial system within the European Union, is essential to preserving the values of the rule of law on which the European Union is founded. (
5
)
The Court thus has jurisdiction to interpret a restrictive measure of general scope where it fell to the Council to implement that measure, which serves as a basis for national sanctions, by a regulation adopted under Article 215 TFEU. In the present case, the prohibition on providing brokering services in question is intended to restrict the ability of economic operators to carry out transactions falling within the scope of the FEU Treaty. (
6
) It can be implemented at EU level only if it is followed by the adoption of such a regulation and is one of the measures necessary to give effect to Decision 2014/512 at EU level, which the Council was required to implement in Regulation No 833/2014.
The Court therefore has jurisdiction to answer the questions referred for a preliminary ruling.
On the substance, the Court considers, in the first place, that the prohibition on providing brokering services laid down in Article 2(2)(a) of Decision 2014/512 is applicable even where the military equipment that was the subject of the brokering transaction concerned was never imported into the territory of a Member State.
In the second place, the Court emphasises that that provision, read in the light of the right to property enshrined in Article 17 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and of the principle of legal certainty and the principle that penalties must be defined by law, does not preclude a national measure confiscating the entire proceeds of a brokering transaction referred to in Article 2(2)(a), which is implemented automatically following a finding by the competent national authorities of an infringement of the prohibition on carrying out that transaction and of the obligation to notify that transaction.
Regarding the right to property, the Court begins by recalling the case-law of the European Court of Human Rights (‘ECtHR’), according to which confiscation measures relating to the proceeds of an infringement or unlawful activity or an instrument having been used to commit an infringement which does not belong to a third party in good faith constitute, as a general rule, regulation of the use of property, even if they deprive, by their very nature, a person of his or her property. (
7
)
In the present case, that limitation on the exercise of the right to property appears to comply with the principle of proportionality and, as a result, to be justified in the light of the conditions laid down in Article 52(1) of the Charter, which it is, however, for the referring court to verify. That limitation is provided for by law (
8
) and respects the essence of the right to property, since it relates to how the use of property is governed for the purposes of the third sentence of Article 17(1) of the Charter and does not constitute deprivation of property for the purposes of the second sentence of Article 17(1). In addition, that measure corresponds to an objective of general interest recognised by the European Union.
As for the principle of proportionality, the confiscation of all the proceeds of the prohibited brokering transaction thus appears necessary in order to dissuade effectively and efficiently economic operators from infringing the prohibition on providing brokering services in relation to military equipment. Similarly, the automatic imposition of a confiscation measure is necessary to ensure the full effectiveness of the sanction. Nevertheless, where a confiscation sanction is imposed separately from a criminal penalty, the procedure as a whole must, according to the case-law of the ECtHR, give the party concerned the opportunity to put his or her case to the national authorities which have imposed that sanction and to the courts hearing the action against the decisions of those authorities, so that they may carry out an overall examination of the interests at stake. (
9
)
(
1
)	Those limitations are imposed by Article 24(1) TEU and Article 275(1) TFEU.
(
2
)	Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 13), as amended by Council Decision 2014/659/CFSP of 8 September 2014 (OJ 2014 L 271, p. 54).
(
3
)	Under the first paragraph of Article 40 TEU, the implementation of the CFSP does not affect the application of the procedures and the extent of the powers of the institutions laid down by the Treaties for the exercise of the competences of the European Union referred to in Articles 3 to 6 of the FEU Treaty.
(
4
)	The preliminary ruling procedure is laid down in Article 19(3)(b) TEU and Article 267 TFEU.
(
5
)	See Article 2 TEU and Article 21 TEU, to which Article 23 TEU relating to the CFSP refers.
(
6
)	Trade in weapons, military equipment and services covered by Article 2(2)(a) of Decision 2014/512 does indeed come within that scope, under Articles 114 and 207 TFEU.
(
7
)	See, inter alia, ECtHR, 24 October 1986, Agosi v. the United Kingdom, CE ECHR:1986:1024JUD000911880, § 51; ECtHR, 12 May 2015, Gogitidze and Others v. Georgia, CE ECHR:2015:0512JUD003686205, § 94; and ECtHR, 15 October 2020, Karapetyan v. Georgia, CE ECHR:2020:1015JUD006123312, § 32.
(
8
)	The measure is based on the Ordonanța de urgență a Guvernului nr. 202/2008 privind punerea în aplicare a sancțiunilor internaționale (Government Emergency Order No 202/2008 on the implementation of international sanctions) of 4 December 2008 (Monitorul Oficial al României, Part I, No 825 of 8 December 2008) and on the national military technology and equipment list referred to in Article 12 of Common Position 2008/944 and established, as regards Romania, by Decrees No 156/2018 and No 901/2019.
(
9
)	See, to that effect, ECtHR, 15 October 2020, Karapetyan v. Georgia, CE ECHR:2020:1015JUD006123312, § 35.