Judgment of the General Court (Fifth Chamber) of 22 November 2018 –

Saleh Thabet and Others v Council

(Cases T‑274/16 and T‑275/16)

(Common foreign and security policy — Restrictive measures taken in view of the situation in Egypt — Freezing of funds — Objectives — Criteria for inclusion of persons targeted — Renewal of the applicants’ designation on the list of persons targeted — Factual basis — Plea of illegality — Legal basis — Proportionality — Right to a fair trial — Presumption of innocence — Principle of good administration — Error of law — Manifest error of assessment — Right to property — Rights of defence — Right to effective judicial protection)

1. European Union — Judicial review of the legality of the acts of the institutions — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Ambit of the review — Assessment of the legality by reference to the information available at the time of adoption of the decision (Art. 263 TFEU; Council Decisions (CFSP) 2016/411 and (CFSP) 2017/496; Council Regulation 2017/491) (see para. 28)

2. Action for annulment — Admissibility criteria — Considered of Court's own motion (see para. 31)

3. Judicial proceedings — Decision or regulation replacing the contested measure in the course of proceedings — New factor — Extension of the initial pleadings — Condition — Initial pleadings directed against the replaced measure — None — Inadmissibility (Rules of Procedure of the General Court, Art. 86(1)) (see paras 33-35)

4. Acts of the institutions — Choice of legal basis — Decision concerning the adoption of restrictive measures directed against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds and of natural or legal persons, bodies or organisations associated with them — Article 29 TEU — Lawfulness (Arts 3(5), 21, 23, 24 and 29 TEU; Council Decisions 2011/172/CFSP, Recital 1, Art. 1(1) (CFSP) 2016/411 and (CFSP) 2017/496) (see paras 41, 46, 47)

5. European Union — Judicial review of the legality of the acts of the institutions — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Ambit of the review — Proof the measure well-founded — Obligation on the competent EU authority to establish, in the event of challenge, that the grounds held against the persons or entities concerned well-founded — Breadth of the discretion of that competent authority Council Decisions 2011/172/CFSP, (CFSP) 2016/411 and (CFSP) 2017/496) (see paras 54-57)

6. Common foreign and security policy — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds and of natural or legal persons, bodies or organisations associated with them — Nature of those measures — Purely protective measures — No criminal character (Council Decision 2011/72/CFSP) (see paras 58, 384)

7. EU law — Values and objectives of the Union — Values — Respect for the rule of law — Rule of law — Meaning (Art. 2 TEU) (see para. 95)

8. European Union — Judicial review of the legality of the acts of the institutions — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Ambit of the review (Charter of Fundamental Rights of the European Union, Art. 47; Council Decisions 2011/172/CFSP, (CFSP) 2016/411 and (CFSP) 2017/496; Council Regulation 2017/491) (see paras 112, 113)

9. Common foreign and security policy — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds and of natural or legal persons, bodies or organisations associated with them — Misappropriation of public funds — Meaning — Independent and uniform interpretation — Broad interpretation — Obligation to ensure effectiveness (Council Decision 2011/172/CFSP, Art. 1(1)) (see paras 144, 145, 154, 158, 171, 172, 188)

10. European Union — Judicial review of the legality of the acts of the institutions — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds and of natural or legal persons, bodies or organisations associated with them — Ambit of the review — Proof the measure well-founded — Obligation on the Council systematically to verify evidence submitted by the authorities of a non-Member country — None (Council Decision 2011/172/CFSP, Arts 1(1) and 5) (see paras 146-148, 365, 382)

11. Acts of the institutions — Statement of reasons — Obligation — Scope — Freezing of the funds of persons involved in the misappropriation of State funds in Egypt and of natural or legal persons, entities or bodies associated with them — Decision falling within a context known to the person concerned, enabling him to understand the scope of the measure taken against him — Whether summary statement of reasons sufficient — Limits — Statement of reasons not capable of consisting of a general and stereotyped formulation (Art. 296 TFEU; Charter of Fundamental Rights of the European Union, Art. 41(2)(c); Council Decisions 2011/72/CFSP, Art. 1(1), (CFSP) 2016/411 and (CFSP) 2017/496) (see paras 239-241)

12. EU law — Principles — Rights of defence — Right to effective judicial protection — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Obligation to disclose individual and specific grounds for the decisions adopted — Obligation to enable the person concerned effectively to put forward his point of view on the grounds held against him — Scope (Council Decisions (CFSP) 2016/411 and (CFSP) 2017/496) (see paras 249-251)

13. Action for annulment — Pleas in law — Lack of or inadequate statement of reasons — Separate ground from the one concerning substantive legality (Arts 263 and 296 TFEU) (see para. 255)

14. EU law — Principles — Rights of defence — Right to effective judicial protection — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Procedural irregularity — Possibility of obtaining the annulment of a disputed act by demonstrating the mere possibility of a different decision in the absence of that irregularity (Council Decisions (CFSP) 2016/411 and (CFSP) 2017/496) (see para. 257)

15. Common foreign and security policy — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds and of natural or legal persons, bodies or organisations associated with them — Infringement of the right to property, of the freedom to conduct a business and of the right to reputation — Breach of principle of proportionality — None (Art. 29 TEU; Charter of Fundamental Rights of the European Union, Arts 16 and 17; Council Decisions 2011/172/CFSP, Art. 1(3) to (5), (CFSP) 2016/411 and (CFSP) 2017/496; Council Regulation No 270/2011) (see paras 273-291)

Re:

Application under Article 263 TFEU for annulment of (i) Council Decision (CFSP) 2016/411 of 18 March 2016 amending Decision 2011/172/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt (OJ 2016 L 74, p. 40); (ii) Council Decision (CFSP) 2017/496 of 21 March 2017 amending Decision 2011/172/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt (OJ 2017 L 76, p. 22); and (iii) Council Implementing Regulation (EU) 2017/491 of 21 March 2017 implementing Regulation (EU) No 270/2011 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt (OJ 2017 L 76, p. 10), in so far as those acts apply to the applicants.

Operative part

The Court:

1. Orders that Cases T‑274/16 and T‑275/16 be joined for the purposes of the judgment;

2. Dismisses the actions;