Keywords

Summary



Keywords

1 Non-contractual liability - Conditions - Lawful or unlawful act - Damage - Causal link - Burden of proof

(EC Treaty, Art. 215)

2 Non-contractual liability - Conditions - Regulation imposing a trade embargo against a non-member country - Damage resulting from retaliatory measures taken by the government of that country - Causal link - None

(EC Treaty, Arts 113 and 215; Council Regulation No 2340/90)

3 Non-contractual liability - Conditions - Regulation imposing a trade embargo against a non-member country - Lawful act - Lack of unusual and special damage - Community liability - Not incurred

(EC Treaty, Art. 215; Council Regulation No 2340/90)

Summary

4 If the Community is to incur non-contractual liability as the result of a lawful or unlawful act, it is necessary to prove that the alleged damage is real and the existence of a causal link between that act and the alleged damage. It is incumbent upon the applicant to produce to the Community judicature evidence to establish the fact of the loss which he claims to have suffered.

5 Liability on the part of the Community, as a result of the adoption of Council Regulation No 2340/90 prohibiting trade by the Community as regards Iraq and Kuwait, for damage caused by the impossibility, for an undertaking established in a Member State, of recovering its debts from the Government of Iraq following the latter's adoption, in response to the embargo imposed on it, of a law freezing the assets of undertakings established in the States responsible for the embargo, cannot be incurred unless there is a direct causal link between the adoption of that regulation and the damage. It is for the undertaking seeking compensation for the damage to establish that the adoption of that law constituted, as a retaliatory measure, an objectively foreseeable consequence, in the normal course of events, of the adoption of that regulation.

In any event, there can be no causal link between the adoption of Regulation No 2340/90 and the damage concerned since the trade embargo against Iraq was imposed by a United Nations Security Council resolution. Whilst it is true that, under Article 25 of the United Nations Charter, only the Members of the United Nations are required to accept and carry out the decisions of the Security Council and were required, in that capacity, to take all necessary measures to give effect to the trade embargo imposed by it, the fact remains that those Members of the United Nations Organisation which were also Member States of the Community were able to take action to that effect only under the Treaty, since any measure of common commercial policy, such as the imposition of a trade embargo, falls, by virtue of Article 113 of the Treaty, within the exclusive competence of the Community.

Regulation No 2340/90 was adopted on the basis of those considerations in order to ensure uniform implementation, throughout the Community, of the measures concerning trade with Iraq and Kuwait decided upon by the United Nations Security Council. The damage allegedly resulting from the counter-measures adopted by the Iraqi Government can therefore be attributed not to the adoption of Regulation No 2340/90 but only to the United Nations Security Council resolution which imposed the embargo.

6 In the event of the principle of Community liability for a lawful act being recognised in Community law, such liability can be incurred only if the damage alleged, if deemed to constitute a `still subsisting injury', affects a particular circle of economic operators in a disproportionate manner by comparison with others (special damage) and exceeds the limits of the economic risks inherent in operating in the sector concerned (unusual damage), without the legislative measure that gave rise to the alleged damage being justified by a general economic interest.

A Community undertaking whose claims against the government of a non-member country have become irrecoverable following the imposition by a Community regulation of a trade embargo against that country cannot be regarded as having suffered special damage where not only its claims were affected but also those of all other Community undertakings which, when the embargo was imposed, had not yet been paid.

Furthermore, the damage resulting from the suspension of payments by that non-member country cannot be regarded as unusual damage, falling outside the foreseeable risks inherent in any provision of services in a `high-risk' non-member country.

In any event, whilst it is true that rules intended, by the imposition of a trade embargo against a non-member country, to maintain international peace and security have, by definition, effects which affect the freedom to pursue a trade or business, thereby causing harm to persons who are in no way responsible for the situation which led to the adoption of the sanctions, the fact nevertheless remains that the importance of the aims pursued by such rules is such as to justify negative consequences, even of a substantial nature, for some operators. Such damage cannot therefore render the Community liable.