1 By his appeal, Mr Oleksandr Viktorovych Klymenko asks the Court to set aside the judgment of the General Court of the European Union of 8 November 2017, Klymenko v Council (T‑245/15, not published, ‘the judgment under appeal’, EU:T:2017:792), by which that Court dismissed his action for annulment of: - Council Decision (CFSP) 2015/364 of 5 March 2015 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2015 L 62, p. 25) and Council Implementing Regulation (EU) 2015/357 of 5 March 2015 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2015 L 62, p. 1); - Council Decision (CFSP) 2016/318 of 4 March 2016 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2016 L 60, p. 76) and Council Implementing Regulation (EU) 2016/311 of 4 March 2016 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2016 L 60, p. 1); and - Council Decision (CFSP) 2017/381 of 3 March 2017 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2017 L 58, p. 34) and Council Implementing Regulation (EU) 2017/374 of 3 March 2017 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2017 L 58, p. 1), (collectively referred to as ‘the contested acts’), in so far as those acts concern the appellant. Background to the dispute
2 On 5 March 2014, the Council adopted Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2014 L 66, p. 26). Article 1(1) and (2) of that decision provides: ‘1. All funds and economic resources belonging to, owned, held or controlled by persons having been identified as responsible for misappropriation of Ukrainian State funds and persons responsible for human rights violations in Ukraine, and natural or legal persons, entities or bodies associated with them, as listed in the Annex, shall be frozen. 2. No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of natural or legal persons, entities or bodies listed in the Annex.’
3 Also on 5 March 2014, the Council adopted Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2014 L 66, p. 1), which implements, as regards the European Union, the restrictive measures set out in Decision 2014/119.
4 Under Article 2(1) of that regulation: ‘All funds and economic resources belonging to, owned, held or controlled by any natural or legal person, entity or body as listed in Annex I shall be frozen.’
5 Article 3(1) of that regulation provides: ‘Annex I shall include persons who, in accordance with Article 1 of Decision 2014/119/CFSP, have been identified by the Council as being responsible for misappropriation of Ukrainian State funds and persons responsible for human rights violations in Ukraine, and natural or legal persons, entities or bodies associated with them.’
6 On 14 April 2014, by Council Implementing Decision 2014/216/CFSP implementing Decision 2014/119 (OJ 2014 L 111, p. 91) and by Council Implementing Regulation (EU) No 381/2014 implementing Regulation No 208/2014 (OJ 2014 L 111, p. 33), the appellant, identified as the ‘former Minister of Revenues and Charges’, was included on the lists of persons, entities and bodies whose funds and economic resources, as set out, respectively, in the Annex to Decision 2014/119 and in Annex I to Regulation No 208/2014, were frozen. The grounds for his inclusion on those lists were identical and were worded as follows: ‘Person subject to investigation in Ukraine for involvement in crimes in connection with the embezzlement of Ukrainian State funds and their illegal transfer outside Ukraine.’
7 By Decision (CFSP) 2015/143 of 29 January 2015 amending Decision 2014/119 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2015 L 24, p. 16), the Council amended the wording of Article 1(1) of the latter decision as follows: ‘All funds and economic resources belonging to, owned, held or controlled by persons having been identified as responsible for the misappropriation of Ukrainian State funds and persons responsible for human rights violations in Ukraine, and natural or legal persons, entities or bodies associated with them, as listed in the Annex, shall be frozen. For the purpose of this Decision, persons identified as responsible for the misappropriation of Ukrainian State funds include persons subject to investigation by the Ukrainian authorities: (a) for the misappropriation of Ukrainian public funds or assets or being an accomplice thereto; or (b) for the abuse of office as a public office-holder in order to procure an unjustified advantage for him- or herself or for a third party, and thereby causing a loss to Ukrainian public funds or assets, or being an accomplice thereto.’
8 By Regulation (EU) 2015/138 of 29 January 2015 amending Regulation No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2015 L 24, p. 1), the Council amended the wording of Article 3 of the latter regulation in similar terms.
9 By the contested acts, the Council maintained the appellant’s name on those lists following three annual reviews and thereby extended the application of the restrictive measures imposed on him until 6 March 2018 for the following reasons: ‘Person subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets and for the abuse of office by a public office-holder in order to procure an unjustified advantage for himself or for a third party and thereby causing a loss to Ukrainian public funds or assets.’ Proceedings before the General Court and the judgment under appeal
10 By application lodged at the General Court Registry on 15 May 2015, the appellant brought an action for annulment of Decision 2015/364 and Implementing Regulation 2015/357.
11 In the course of the proceedings, the Council adopted Decision 2016/318 and Implementing Regulation 2016/311, followed by Decision 2017/381 and Implementing Regulation 2017/374; the appellant therefore amended the original forms of order sought on two occasions so that his action also covered the annulment of those acts, in so far as they concerned him.
12 In support of his claims for annulment of the contested acts, the appellant put forward five pleas in law, alleging, first, that there was no legal basis for those acts, secondly, a manifest error of assessment, thirdly, infringement of the rights of the defence and of the right to effective judicial protection, fourthly, infringement of the obligation to state reasons and, finally and fifthly, infringement of the right to property and respect for his reputation. The appellant raised a sixth plea in law, directed solely against Decision 2016/318 and Implementing Regulation 2016/311 and against Decision 2017/381 and Implementing Regulation 2017/374, alleging infringement of his rights under Article 6 TEU, read together with Articles 2 and 3 TEU, and under Articles 47 and 48 of the Charter of Fundamental Rights of the European Union (‘the Charter’). Lastly, he raised an objection, in respect of those contested acts, that the criterion for the listing of persons and entities whose funds were frozen, as set out in Article 1(1) of Decision 2014/119, as amended by Decision 2015/143, was unlawful.
13 The General Court first examined the pleas raised in support of the claim seeking annulment of Decision 2015/364, Implementing Regulation 2015/357, Decision 2016/318 and Implementing Regulation 2016/311. Next, it examined the pleas raised in support of the claim seeking annulment of Decision 2017/381 and of Implementing Regulation 2017/374 and, finally, the plea alleging that the listing criterion was unlawful. The General Court rejected each of those pleas and the objection alleging illegality and consequently dismissed the action in its entirety. Procedure before the Court and forms of order sought
14 The appellant claims that the Court should: - set aside the judgment under appeal; - annul the contested acts, in so far as they concern him; and - order the Council to pay the costs relating to the present appeal and the action at first instance.
15 The Council contends that the Court should: - dismiss the appeal; - in the alternative, dismiss the action; and - order the appellant to pay the full costs of the proceedings.
16 The written observations submitted by the parties on the lessons to be drawn from the Court’s judgments of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583, paragraphs 24, 31, 33 and 37), and of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031, paragraphs 26, 29, 30 and 45), for the purpose of dealing with the present appeal, have been received. The appeal
17 The appellant relies on three grounds of appeal, alleging, first, failure to provide adequate reasons for the judgment under appeal and for the contested acts, secondly, lack of a legal basis, and, thirdly, infringement of the right to property. Arguments of the parties
18 By his first ground of appeal, the appellant submits that the General Court erred in law in considering that the statement of reasons adopted by the Council in the contested acts was adequate and that that institution had had due regard for the principle of good administration enshrined in Article 41 of the Charter. The grounds on which the judgment under appeal is based are also incorrect. In that regard, the appellant submits that, as the letters from the Ukrainian authority on which the Council based its assessment when adopting the restrictive measures taken against him were insufficient, the Council should have carried out further checks to satisfy itself that that authority was credible and to ensure compliance with the principle of the rule of law, particularly as the appellant adduced evidence of infringement of the presumption that he is innocent and of his right to due process, his political persecution and the lack of judicial independence in Ukraine. The General Court also wrongly described that authority as ‘one of the highest Ukrainian judicial authorities’.
19 In response, the Council submits that the first ground of appeal is unfounded. The General Court used the expression ‘highest judicial authority’ in the broad sense to describe the Ukrainian authority in question and examined the evidence adduced by the appellant as regards the credibility of that authority. The conclusion reached by the Court of Justice in paragraphs 64 and 75 of the judgment of 19 October 2017, Yanukovych v Council (C‑598/16 P, not published, EU:C:2017:786) is applicable to the present case, bearing in mind the factual findings made by the General Court in paragraphs 107 and 109 of the judgment under appeal, which cannot be reviewed by this Court, from which it is apparent that the evidence put forward by the appellant was insufficient to demonstrate that his particular situation was affected by the problems he identifies in the Ukrainian judicial system and that the Council’s political decision to cooperate with the Ukrainian authorities could not be regarded as manifestly incorrect. It is also apparent from that judgment that it was not for the General Court to verify whether or not the investigations concerning the person affected by a measure freezing funds were justified, but only to verify whether that was the case as regards the decision to freeze that person’s funds, in the light of the documents on which that decision was based. The General Court did not therefore err in law in allowing the Council to base its decision on the evidence adduced by that Ukrainian authority without carrying out further checks, or infringe Article 41 of the Charter.
20 The Council adds that it is obvious from the specific and concrete information referred to in paragraph 57 of the judgment under appeal that the appellant was subject to criminal proceedings for misappropriation of public funds, with the result that the General Court was entitled to find that the matters of fact and law on which the contested acts were based had been set out to the requisite legal standard. Findings of the Court
21 According to the Court’s case-law, where restrictive measures, such as the measures freezing the appellant’s funds, are imposed, 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 (see, inter alia, judgments of 26 July 2017, Council v LTTE , C‑599/14 P, EU:C:2017:583, paragraph 24, and of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 26).
22 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 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; of 26 July 2017, Council v LTTE , C‑599/14 P, EU:C:2017:583, paragraph 25; and of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 27).
23 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, judgments of 26 July 2017, Council v LTTE , C‑599/14 P, EU:C:2017:583, paragraph 26, and of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 28).
24 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, judgments of 26 July 2017, Council v LTTE , C‑599/14 P, EU:C:2017:583, paragraphs 31 and 33, and of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 29).
25 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, judgments of 26 July 2017, Council v LTTE , C‑599/14 P, EU:C:2017:583, paragraph 37, and of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 30).
26 In the present case, as is apparent from paragraphs 56, 57, 135 to 138, 238 and 246 of the judgment under appeal, the Council based the maintenance, by the contested acts, of the restrictive measures taken against the appellant on the fact that he was subject to ‘criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets and for the abuse of office by a public office-holder’, as was established by letters, inter alia, of 30 December 2014, 30 November 2015 and 1 March 2016, referring to an investigation instituted against the appellant by a Ukrainian judicial authority.
27 In that regard, it should be recalled that the listing criterion on which the decision to maintain the appellant on the list was based, set out in Article 1(1) of Decision 2014/119, as amended by Decision 2015/143, and Article 2(1), in conjunction with Article 3, of Regulation No 208/2014, as amended by Regulation 2015/138, as referred to in paragraphs 7 and 8 above, provides for the freezing of funds of persons who have been identified as responsible for the misappropriation of Ukrainian State funds, including persons subject to investigation by the Ukrainian authorities for misappropriation of public funds or for abuse of office as a public office-holder.
28 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 in that regard, to initiate and conduct criminal investigation proceedings concerning such offences.
29 Thus, in the present case, in accordance with the case-law cited in paragraphs 21, 24 and 25 above, the Council was obliged to verify, before adopting those acts, that the decision of that third State had been adopted in accordance with the appellant’s rights of the defence and the right to effective judicial protection and to show, in the statement of reasons for those acts, that it had undertaken that verification.
30 It must be noted that the General Court, in the judgment under appeal, considered that the Council was not subject to such requirements, since it took the view that that case-law, stemming from the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583), was not applicable to restrictive measures taken in view of the situation in Ukraine. In doing so, the General Court erred in law with regard to the obligations on the Council to verify and state reasons when it adopts restrictive measures based on the decision of a third State.
31 The General Court thus stated, in paragraph 223 of the judgment under appeal, 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), then subject to an appeal, could not be applied to the present case. The General Court further indicated, in paragraph 231 of the judgment under appeal, that ‘only if the Council’s political choice to support the new Ukrainian regime ... proved to be manifestly incorrect ... could any mismatch between the protection of fundamental rights in Ukraine and that in the European Union affect the lawfulness of [the contested acts]’. The General Court reiterated that reasoning in paragraph 256 of the judgment under appeal. In order to reach that conclusion, the General Court relied, as is apparent from paragraphs 229 and 230 of the judgment under appeal, on the case-law stemming from the judgment of 21 April 2015, Anbouba v Council (C‑605/13 P, EU:C:2015:248, paragraph 41), in which the Court of Justice 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.
32 Such reasoning is vitiated by an error of law, as established by the Court in the judgment of 19 December 2018, Azarov v Council (C‑530/17 P, EU:C:2018:1031, paragraphs 31 to 33).
33 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 (judgment of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 34).
34 In addition, while it is true that the listing criterion set out in paragraph 27 above allows the Council to base restrictive measures on a decision of a third State, such as that referred to in the letters, inter alia, of 30 December 2014, 30 November 2015 and 1 March 2016, mentioned in paragraph 26 above, 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 (see, to that effect, judgment of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 35).
35 The fact that 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, which 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, does not absolve the Council of the requirement to verify that the decision of a third State on which it bases its restrictive measures has been taken in compliance with fundamental rights, in particular the rights of the defence and the right to effective judicial protection (judgment of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 36).
36 The Court has also stated that that conclusion cannot be called into question on the ground that the case-law stemming from the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583) 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) (see, to that effect, judgment of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 37).
37 It should be added, with regard to the General Court’s reasoning set out in paragraph 231 of the judgment under appeal and summarised in paragraph 31 above, that the definition of general listing criteria permitting the adoption of restrictive measures is not at issue in the present case. On the other hand, what is at issue is the decision to maintain, by the contested acts, the freezing of the appellant’s assets, which affects him individually. In their review of the legality of the grounds on which such a decision is based, the Courts of the European Union must satisfy themselves that, at the very least, one of those reasons is sufficiently detailed and specific, that it is substantiated and that it constitutes in itself a sufficient basis to support that decision (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 119, and of 28 November 2013 Council v Manufacturing Support & Procurement Kala Naft , C‑348/12 P, EU:C:2013:776, paragraph 72).
38 Moreover, it is for the competent European Union 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 is to say, 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).
39 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 appeals leading to those judgments, the question whether the case-law established by 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, the Court held, having regard to the settled case-law cited in paragraphs 22, 23 and 38 above, that 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 (see, to that effect, judgment of 19 December 2018, Azarov v Council , C‑530/17 P, EU:C:2018:1031, paragraph 40). It cannot a fortiori be inferred from those judgments that the Council was not obliged to show, in the statement of reasons for the contested acts, that it undertook such a verification. Thus, the conclusions drawn in those judgments have no bearing on the present appeal.
40 It follows from the foregoing that the first ground of appeal must be upheld and the judgment under appeal set aside on that basis in its entirety, without it being necessary to rule on other grounds of appeal or arguments of the appellant. The action before the General Court
41 In accordance with the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the appeal is well founded, the Court of Justice is to quash the decision of the General Court. It may itself give final judgment in the matter, where the state of the proceedings so permits.
42 In the present case, the Court has the necessary information to give final judgment on the action for annulment of the contested acts brought by the appellant before the General Court.
43 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 authority in question had had due regard for the appellant’s rights of defence and his right to judicial protection.
44 Accordingly, it is sufficient to conclude that, on the grounds set out in paragraphs 21 to 40 above, the action is well founded and the contested acts must be annulled, in so far as they concern the appellant. Costs
45 Under Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is well founded and the Court itself gives final judgment in the case, the Court is to make a decision as to costs.
46 Under Article 138(1) of those rules, applicable to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
47 Since the appellant has applied for costs and the Council has been unsuccessful, the Council must be ordered to pay the costs incurred both in the proceedings at first instance and in the present appeal. On those grounds, the Court (Seventh Chamber) hereby: 1. Sets aside the judgment of the General Court of the European Union of 8 November 2017, Klymenko v Council (T ‑ 245/15, not published, EU:T:2017:792); 2. Annuls Council Decision (CFSP) 2015/364 of 5 March 2015 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, Council Implementing Regulation (EU) 2015/357 of 5 March 2015 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, Council Decision (CFSP) 2016/318 of 4 March 2016 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, Council Implementing Regulation (EU) 2016/311 of 4 March 2016 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, Council Decision (CFSP) 2017/381 of 3 March 2017 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine and Council Implementing Regulation (EU) 2017/374 of 3 March 2017 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, in so far as they concern Mr Oleksandr Viktorovych Klymenko; 3. Orders the Council of the European Union to pay the costs incurred both in the proceedings at first instance and in the present appeal. von Danwitz Xuereb Kumin Delivered in open court in Luxembourg on 26 September 2019. A. Calot Escobar T. von Danwitz Registrar President of the Seventh Chamber * Language of the case: English.