Mykola Yanovych Azarov v Council of the European Union.
Date: 2018-12-19
18


In response, the Council submits that the third part of the fifth ground of appeal is unfounded. It maintains, as the General Court held in the judgment under appeal, that the difference between the model of restrictive measures at issue in the case which gave rise to the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583), and that at issue in the present case, in terms of their wording and structure, as well as in the objectives and general conditions on which they are based, is considerable. In particular, the European Union’s political decision to support the Ukrainian regime, notably in its reforms aimed at strengthening the rule of law in Ukraine, constitutes a relevant factor, the Court having stated, in the judgment of 19 October 2017, Yanukovych v Council (C‑598/16 P, not published, EU:C:2017:786, paragraph 61), that the restrictive measures aimed at fighting the misappropriation of State funds in that country formed part of a policy of supporting a third State, intended to promote both the economic and political stability of that State.
20


According to the Court’s case-law, in a review of restrictive measures, the Courts of the European Union must ensure the review, in principle the full review, of the lawfulness of all Union acts in the light of the fundamental rights forming an integral part of the EU legal order (see, to that effect, judgments of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 97; of 28 November 2013, Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 58; and of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 106).
21


Those fundamental rights include, inter alia, respect for the rights of the defence and the right to effective judicial protection (judgments of 28 November 2013, Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 59 and the case-law cited, and of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 66).
22


The effectiveness of the judicial review guaranteed by Article 47 of the Charter requires, as the General Court correctly pointed out in paragraph 136 of the judgment under appeal, that, as part of the review of the lawfulness of the grounds which are the basis of the decision to include or to maintain a person’s name on the lists of persons subject to restrictive measures, the Courts of the European Union are to ensure that that decision, which affects that person individually, is taken on a sufficiently solid factual basis. That entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, are substantiated (judgments of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 119; of 18 June 2015, Ipatau v Council, C‑535/14 P, EU:C:2015:407, paragraph 42; and of 18 February 2016, Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 109).
25


It follows that the maintenance, by the contested acts, of the restrictive measures taken against the appellant is based on the decision of an authority of a third State, which was competent to make it, to initiate and conduct criminal investigation proceedings concerning an offence of misappropriation of public funds. In this respect, it is irrelevant, as noted in paragraph 169 of the judgment under appeal, that the existence of such a decision constitutes not the listing criterion laid down in Article 1(1) of Decision 2014/119, as amended by Decision 2015/143, but rather the factual basis for the restrictive measures at issue.
26


In the case of such a decision, the Council must, before acting on the basis of a decision of an authority of a third State, verify whether that decision was adopted in accordance with the rights of the defence and the right to effective judicial protection (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 24).
27


According to settled case-law, the Council is obliged, when adopting restrictive measures, to respect the fundamental rights that form an integral part of the EU legal order, which include, as has been pointed out in paragraph 21 of the present judgment, respect for the rights of the defence and the right to effective judicial protection (see, to that effect, judgments of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraphs 97 and 98; of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraphs 65 and 66; and of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 25).
28


In that regard, the requirement for the Council to verify that the decisions of third States on which it bases the entry of a person or entity on a list of persons or entities whose assets are to be frozen have been taken in accordance with those rights is designed to ensure that they are included on that list only on a sufficiently solid factual basis and, thus, to protect the persons or entities concerned (see, to that effect, judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 26).
29


The Court has also held that the Council must refer, if only briefly, in the statement of reasons relating to a decision to include a person or entity on a list of persons or entities whose assets are to be frozen and to subsequent decisions, to the reasons why it considers the decision of the third State on which it intends to rely to have been adopted in accordance with the rights of the defence and the right to effective judicial protection (see, to that effect, judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraphs 31 and 33).
30


Thus it is for the Council, in order to fulfil its obligation to state reasons, to show, in the decision imposing the restrictive measures, that it has verified that the decision of the third State on which those measures are based was taken in accordance with those rights (see, to that effect, judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 37).
31


In the present case, it should be noted that, in paragraph 167 of the judgment under appeal, the General Court held that the approach taken in the judgment of 16 October 2014, LTTE v Council (T‑208/11 and T‑508/11, EU:T:2014:885) could not be applied to the present case.
32


The General Court further indicated, in paragraph 175 of the judgment under appeal, that ‘only if the Council’s political decision to support the new Ukrainian regime … proved to be erroneous … could any inconsistency between the protection of fundamental rights in Ukraine and that in place in the European Union have a bearing on the legality of [the contested acts]’. In order to reach that conclusion, the General Court relied, as is apparent from paragraphs 173 and 174 of the judgment under appeal, on the case-law stemming from the judgment of 21 April 2015, Anbouba v Council (C‑630/13 P, EU:C:2015:247, paragraph 42), in which the Court acknowledges that the EU legislature has a broad discretion when it comes to defining the general listing criteria which must be taken into account when applying restrictive measures.
33


That reasoning is vitiated by an error of law.
34


The Council cannot conclude that a listing decision is taken on a sufficiently solid factual basis before having itself verified that the rights of the defence and the right to effective judicial protection were respected at the time of the adoption of the decision by the third State in question on which it intends to base the adoption of restrictive measures.
35


In the present case, although it is true that the listing criterion referred to in paragraph 23 of the present judgment allows the Council to base restrictive measures on a decision of a third State, such as that referred to in the letter of 10 October 2014 mentioned in paragraph 24 of the present judgment, the fact remains that the obligation, on that institution, to respect the rights of the defence and the right to effective judicial protection means that it must satisfy itself that those rights were respected by the authorities of the third State which adopted that decision.
36


Admittedly, as the General Court observed in paragraph 173 of the judgment under appeal, Ukraine is among those States that have acceded to the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950. However, although a circumstance of that nature entails review, by the European Court of Human Rights, of the fundamental rights guaranteed by that convention, which, in accordance with Article 6(3) TEU, form part of EU law as general principles, it cannot render superfluous verification, by the Council, that the decision of a third State on which it bases its restrictive measures has been taken in compliance with fundamental rights and in particular the rights of the defence and the right to effective judicial protection.
37


The fact that that case-law arose in the context of restrictive measures based on Council Common Position 2001/931/CFSP of 27 December 2001 on the application of specific measures to combat terrorism (OJ 2001 L 344, p. 93), which, according to Article 1(4) thereof, expressly refers to a decision taken by a competent authority, cannot call that conclusion into question. Indeed, the differences in the wording, structure and objective identified by the General Court, in paragraphs 168 to 172 of the judgment under appeal, between, on the one hand, the model of restrictive measures provided for by that common position and, on the other, the model of restrictive measures provided for in Decision 2014/119, as amended by Decision 2015/143, and in Regulation No 208/2014, as amended by Regulation 2015/138, cannot have the effect of limiting the application of the guarantees arising from that same case-law only to restrictive measures adopted in the fight against terrorism, along the lines of that common position, and excluding those adopted in the context of cooperation with a third State decided on by the Council as a result of a political decision.
38


It should be added, with regard to the General Court’s reasoning which is summarised in paragraph 32 of the present judgment, that the definition of general listing criteria permitting the adoption of restrictive measures is not at issue in the present case. By contrast, what is at issue is the decision to maintain, by the contested acts, the freezing of the appellant’s assets, which affects him individually. Pursuant to the case-law cited in paragraph 22 of the present judgment, in the context of its review of the legality of the grounds on which such a decision is based, the Courts of the European Union must ensure that, at the very least, one of those reasons is sufficiently detailed and specific, that it is substantiated and that it constitutes in itself sufficient basis to support that decision (see, to that effect, judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 72).
39


Moreover, it is the task of the competent EU authority to establish, in the event of challenge, that the reasons relied on against the person concerned are well founded, and not the task of that person to adduce evidence of the negative, that those reasons are not well founded (judgments of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 121, and of 28 November 2013, Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 66).
40


As regards the judgments of 19 October 2017, Yanukovych v Council (C‑598/16 P, not published, EU:C:2017:786), and of 19 October 2017, Yanukovych v Council (C‑599/16 P, not published, EU:C:2017:785), referred to by the Council, it should be noted that, in the context of the appeals leading to these judgments, the question whether the case-law resulting from the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583) covered the case of restrictive measures adopted in view of the situation in Ukraine was not put before the Court. Furthermore, it must be held that, having regard to the settled case-law cited in paragraphs 27, 28 and 39 of the present judgment, it cannot be inferred from those judgments that the Council is not required to verify that the decision of a third State on which it intends to base the adoption of restrictive measures was taken in accordance with the rights of the defence and the right to effective judicial protection. Such a conclusion would be contrary to that settled case-law. Thus, the conclusions drawn in those judgments have no bearing on the present appeal.
45


In that regard, it is in no way apparent from the statement of reasons for the contested acts that the Council verified that the Ukrainian judicial authorities had respected the appellant’s rights of defence and his right to judicial protection.