Case C-376/10 P

Pye Phyo Tay Za

v

Council of the European Union

‛Appeals — Common foreign and security policy — Restrictive measures against the Republic of the Union of Myanmar — Freezing of funds applicable to persons, entities and bodies — Legal basis’

Summary of the Judgment

Acts of the institutions — Choice of legal basis — Regulation renewing and strengthening restrictive measures against a third country — Measures freezing the funds of certain persons and entities associated with or controlled by the leaders of that country

(Arts 60 EC and 301 EC; Council Regulation No 194/2008; Council Common Positions 2006/318 and 2007/750)

While it is true that the Court gave a broad interpretation of Articles 60 EC and 301 EC, in so far as it included in the concept of ‘third country’ used in those provisions the leaders of such countries and also the individuals and entities associated with or controlled, directly or indirectly, by them, the fact remains that such an interpretation was subject to conditions designed to ensure that Articles 60 EC and 301 EC are applied in a manner consistent with the objective assigned to them. An interpretation of Articles 60 EC and 301 EC to the effect that it is enough for the restrictive measures at issue to be directed at persons or entities present in a third country or associated with one in some other way in order for them to be regarded as having been adopted against such a country for the purpose of Articles 60 EC and 301 EC would give those provisions an excessively broad meaning and would fail to take any account at all of the requirement, imposed by their very wording, that the measures decided on the basis of those provisions must be taken against third countries.

It follows that, in order for it to be possible for them to be adopted on the basis of Articles 60 EC and 301 EC as restrictive measures imposed on third countries, the measures in respect of natural persons must be directed only against the leaders of such countries and the persons associated with those leaders. That requirement ensures that there is a sufficient link between the persons concerned and the third country targeted by the restrictive measures adopted by the European Union, precluding too broad an interpretation of Articles 60 EC and 301 EC.

By considering that it may be presumed that the members of the families of leading business figures in a third country also benefit from the economic policies of the government of that country, the General Court extended the category of natural persons who may be subject to targeted restrictive measures. The application of such measures to natural persons on the sole ground of their family connection with persons associated with the leaders of the third country concerned, irrespective of the personal conduct of such natural persons, is at variance with the Court’s interpretation of Articles 60 EC and 301 EC. Moreover, by finding that the restrictive measures adopted against a third country could not be directed at persons associated with that country ‘in some other way’, the Court intended to restrict the categories of natural persons at whom targeted restrictive measures may be directed to those whose connection with the third country concerned is quite obvious, namely, the leaders of third countries and the individuals associated with them.

Moreover, the criterion used by the General Court in order to include the members of the families of those in charge of businesses is based on a presumption for which no provision was made in Regulation No 194/2008 renewing and strengthening the restrictive measures in respect of Burma/Myanmar or in Common Positions 2006/318 and 2007/750, to which that regulation refers, and which is inconsistent with the objective of the regulation. Consequently, a measure to freeze funds and economic resources belonging to the appellant could have been adopted within the framework of a regulation intended to impose sanctions on a third country on the basis of Articles 60 EC and 301 EC only in reliance upon precise, concrete evidence enabling it to be established that the appellant benefits from the economic policies of the leaders of the Republic of the Union of Myanmar.

It follows that, by finding that it may be presumed that the members of the families of leading business figures in a third country benefit from the functions exercised by those businessmen, so that such members of the family also benefit from the economic policies of the government, and that there is therefore a sufficient link, for the purposes of Articles 60 EC and 301 EC, between the appellant and the military regime of Myanmar, the General Court erred in law.

(see paras 60-66, 68-71)

Case C-376/10 P

Pye Phyo Tay Za

v

Council of the European Union

‛Appeals — Common foreign and security policy — Restrictive measures against the Republic of the Union of Myanmar — Freezing of funds applicable to persons, entities and bodies — Legal basis’

Summary of the Judgment

Acts of the institutions — Choice of legal basis — Regulation renewing and strengthening restrictive measures against a third country — Measures freezing the funds of certain persons and entities associated with or controlled by the leaders of that country

(Arts 60 EC and 301 EC; Council Regulation No 194/2008; Council Common Positions 2006/318 and 2007/750)

While it is true that the Court gave a broad interpretation of Articles 60 EC and 301 EC, in so far as it included in the concept of ‘third country’ used in those provisions the leaders of such countries and also the individuals and entities associated with or controlled, directly or indirectly, by them, the fact remains that such an interpretation was subject to conditions designed to ensure that Articles 60 EC and 301 EC are applied in a manner consistent with the objective assigned to them. An interpretation of Articles 60 EC and 301 EC to the effect that it is enough for the restrictive measures at issue to be directed at persons or entities present in a third country or associated with one in some other way in order for them to be regarded as having been adopted against such a country for the purpose of Articles 60 EC and 301 EC would give those provisions an excessively broad meaning and would fail to take any account at all of the requirement, imposed by their very wording, that the measures decided on the basis of those provisions must be taken against third countries.

It follows that, in order for it to be possible for them to be adopted on the basis of Articles 60 EC and 301 EC as restrictive measures imposed on third countries, the measures in respect of natural persons must be directed only against the leaders of such countries and the persons associated with those leaders. That requirement ensures that there is a sufficient link between the persons concerned and the third country targeted by the restrictive measures adopted by the European Union, precluding too broad an interpretation of Articles 60 EC and 301 EC.

By considering that it may be presumed that the members of the families of leading business figures in a third country also benefit from the economic policies of the government of that country, the General Court extended the category of natural persons who may be subject to targeted restrictive measures. The application of such measures to natural persons on the sole ground of their family connection with persons associated with the leaders of the third country concerned, irrespective of the personal conduct of such natural persons, is at variance with the Court’s interpretation of Articles 60 EC and 301 EC. Moreover, by finding that the restrictive measures adopted against a third country could not be directed at persons associated with that country ‘in some other way’, the Court intended to restrict the categories of natural persons at whom targeted restrictive measures may be directed to those whose connection with the third country concerned is quite obvious, namely, the leaders of third countries and the individuals associated with them.

Moreover, the criterion used by the General Court in order to include the members of the families of those in charge of businesses is based on a presumption for which no provision was made in Regulation No 194/2008 renewing and strengthening the restrictive measures in respect of Burma/Myanmar or in Common Positions 2006/318 and 2007/750, to which that regulation refers, and which is inconsistent with the objective of the regulation. Consequently, a measure to freeze funds and economic resources belonging to the appellant could have been adopted within the framework of a regulation intended to impose sanctions on a third country on the basis of Articles 60 EC and 301 EC only in reliance upon precise, concrete evidence enabling it to be established that the appellant benefits from the economic policies of the leaders of the Republic of the Union of Myanmar.

It follows that, by finding that it may be presumed that the members of the families of leading business figures in a third country benefit from the functions exercised by those businessmen, so that such members of the family also benefit from the economic policies of the government, and that there is therefore a sufficient link, for the purposes of Articles 60 EC and 301 EC, between the appellant and the military regime of Myanmar, the General Court erred in law.

(see paras 60-66, 68-71)