JUDGMENT OF THE GENERAL COURT (Seventh Chamber)
9 September 2010 (*)
(Common foreign and security policy – Restrictive measures against certain persons and entities with a view to combating terrorism – Freezing of funds – Common Position 2001/931/CFSP and Regulation (EC) No 2580/2001 – Action for annulment – Adaptation of heads of claim – Judicial review – Conditions for implementation of a European Union measure freezing funds)
In Case T‑348/07,
Stichting Al‑Aqsa, established in Heerlen (Netherlands), represented by J. Pauw, G. Pulles, A.M. van Eik and M. Uiterwaal, lawyers,
applicant,
v
Council of the European Union, represented by E. Finnegan, G.‑J. Van Hegelsom and B. Driessen, acting as Agents,
defendant,
supported by
Kingdom of the Netherlands, represented by C. Wissels, M. de Mol and Y. de Vries, acting as Agents,
and by
European Commission, represented by P. van Nuffel and S. Boelaert, acting as Agents,
interveners,
APPLICATION, originally, in essence, for annulment of Council Decision 2007/445/EC of 28 June 2007 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Decisions 2006/379/EC and 2006/1008/EC (OJ 2007 L 169, p. 58), in so far as that act concerns the applicant,
THE GENERAL COURT (Seventh Chamber),
composed of N.J. Forwood (Rapporteur), President, S. Papasavvas and E. Moavero Milanesi, Judges,
Registrar: N. Rosner, Administrator,
having regard to the written procedure and further to the hearing on 25 November 2009,
gives the following
Judgment
Legal framework and background to the dispute
1 For a summary of the early background to this case, reference is made to the following: the judgment of 11 July 2007 in Case T‑327/03 Al‑Aqsa v Council, not published in the ECR (‘Al‑Aqsa’), in particular paragraphs 16 to 21, describing the administrative and judicial proceedings relating to the applicant, Stichting Al‑Aqsa, in the Netherlands which gave rise to the Sanctieregeling Terrorisme 2003 (Regulation on sanctions for the suppression of terrorism 2003) (‘the Sanctieregeling’) adopted by the Netherlands Ministers for Foreign Affairs and for Finance on 3 April 2003; the official memorandum sent by the director of the Algemene Inlichtingen- en Veiligheidsdienst (General Intelligence and Security Service) (‘the AIVD’) to the Director General for Political Affairs of the Netherlands Ministry of Foreign Affairs on 9 April 2003 (‘the AIVD memorandum’); the interim order of the Rechtbank te ’s‑Gravenhage, sector civiel recht, voorzieningenrechter (District Court of The Hague, Civil Law Section, Court hearing applications for interim measures) (‘the court hearing the application for interim measures’) of 13 May 2003 (‘the interim order of the court hearing the application for interim measures’); and the definitive order issued by that same court on 3 June 2003 (‘the order of the court hearing the application for interim measures’).
2 In Al‑Aqsa the Court annulled Council Decision 2006/379/EC of 29 May 2006 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Decision 2005/930/EC (OJ 2006 L 144, p. 21), in so far as it concerned the applicant, essentially on the ground that it did not contain an adequate statement of reasons.
3 By letter of 23 April 2007, the Council of the European Union informed the applicant that, in its view, the reasons for including it originally in the list annexed to Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism (OJ 2001 L 344, p. 72) (‘the list at issue’) were still valid, and that it therefore intended to continue to include the applicant in that list. Enclosed with that letter was the Council’s statement of reasons. The applicant was also informed that it could submit observations to the Council on the latter’s intention to continue to include it in the list and on the reasons stated in that regard, together with any supporting documents, within a period of one month.
4 In the statement of reasons enclosed with the letter the Council noted the following:
‘The [applicant] was constituted in the Netherlands in 1993 as a foundation governed by Netherlands law. It raised funds for certain organisations belonging to the Palestinian movement Hamas, which appears on the list of groups involved in terrorist acts within the meaning of Article 1(2) of 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)]. Some of those organisations make funds available for the commission, or for facilitation in the commission, of terrorist acts. Such acts are those which fall within Article 1(3)(k) of Common Position 2001/931 and are committed with the aims set out in Article 1(3)(i) and (iii) of that Common Position.
The [applicant] therefore falls within Article 2(3)(ii) of Regulation ... No 2580/2001.
The [Netherlands] Ministers for Foreign Affairs and for Finance decided, by Ministerial Regulation DJZ/BR/219-03 of 3 April 2003 ( the Sanctieregeling Terrorisme), which was published in the Staatscourant (Netherlands Official Journal) on 7 April 2003, to freeze all assets belonging to the [applicant]. That decision was endorsed by Order LJN AF9389, delivered on 3 June 2003 by the President of the Civil Law Section of the Rechtbank ’s-Gravenhage (District Court, The Hague). That order stated that the [applicant] must be regarded as an organisation supporting Hamas and enabling the latter to commit or facilitate terrorist activities.
A decision was therefore taken in respect of the [applicant] by a competent authority within the meaning of Article 1(4) of Common Position 2001/931.
The Council is therefore convinced that the reasons that justified inclusion of the [applicant] in the [list at issue] are still valid.’
5 It is agreed between the parties that the Ministerial Regulation and the order referred to in that statement of reasons are the Sanctieregeling and the order of the court hearing the application for interim measures.
6 By letter of 25 May 2007, the applicant submitted to the Council its observations in response. It criticised both the substantive reasons given by the Council as justification for continuing to include the applicant’s name in the list at issue and the procedure it had followed.
7 On 28 June 2007, that is to say, after the oral hearing in Al‑Aqsa, which took place on 16 January 2007, but before the judgment was delivered in that case, the Council adopted Decision 2007/445/EC implementing Article 2(3) of Regulation (EC) No 2580/2001 and repealing Decisions 2006/379/EC and 2006/1008/EC (OJ 2001 L 169, p. 58) (‘the contested decision’). By that decision, the Council continued to include the applicant’s name in the list at issue.
8 Recital 4 in the preamble to the contested decision reads:
‘The Council has carried out a complete review of the list of persons, groups and entities to which Regulation … No 2580/2001 applies, as required by Article 2(3) of that Regulation. In this regard, it has taken account of observations and documents submitted to the Council by certain persons, groups and entities concerned.’
9 Recital 5 in the preamble to the contested decision reads:
‘Following this review, the Council has concluded that the persons, groups and entities listed in the Annex to this Decision have been involved in terrorist acts within the meaning of Article 1(2) and (3) of Common Position [2001/931], that a decision has been taken with respect to them by a competent authority within the meaning of Article 1(4) of that Common Position, and that they should continue to be subject to the specific restrictive measures provided for in Regulation No 2580/2001.’
10 The contested decision was notified to the applicant under cover of a letter from the Council dated 29 June 2007. The statement of reasons enclosed with that letter (‘the statement of reasons’) is identical to that enclosed with the letter from the Council of 23 April 2007 (see paragraph 3 above).
Procedure and fresh developments during the proceedings
11 By application lodged at the Court Registry on 12 September 2007 the applicant brought the present action, originally seeking, in essence, annulment in part of the contested decision.
12 On 20 December 2007 the Council adopted Decision 2007/868/EC implementing Article 2(3) of Regulation No 2580/2001 and repealing the contested decision (OJ 2007 L 340, p. 100). That decision continues to include the applicant’s name in the list at issue.
13 By order of 21 February 2008, after the parties had been heard, the President of the Seventh Chamber of the General Court granted the Kingdom of the Netherlands and the Commission of the European Communities leave to intervene in support of the forms of order sought by the Council.
14 By letter received at the Court Registry on 12 June 2008, the applicant sought leave to adapt its claims so that its action is for annulment of Decision 2007/868, in so far as it applies to the applicant. In its observations on that request, lodged at the Court Registry on 10 and 17 July 2008, the Council indicated that it could agree to such adaptation.
15 On 15 July 2008 the Council adopted Decision 2008/583/EC implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2007/868 (OJ 2008 L 188, p. 21). That decision continues to include the applicant’s name in the list at issue.
16 By letter received at the Court Registry on 10 September 2008, the applicant sought leave to adapt its claims so that its action is also for annulment of Decision 2008/583, in so far as it applies to the applicant. In its observations on that request, lodged at the Registry on 10 October 2008, the Council indicated that it could agree to such adaptation. In their observations, lodged at the Registry on 6 and 14 October 2008, respectively, the Kingdom of the Netherlands and the Commission raised no objections.
17 On 26 January 2009 the Council adopted Decision 2009/62/EC implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2008/583 (OJ 2009 L 23, p. 25). That decision continues to include the applicant’s name in the list at issue.
18 On 15 June 2009 the Council adopted Regulation (EC) No 501/2009 implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2009/62 (OJ 2009 L 151, p. 14). That regulation continues to include the applicant’s name in the list at issue.
19 On hearing the report of the Judge-Rapporteur, the General Court (Seventh Chamber) decided to open the oral procedure and, by way of measures of organisation of procedure pursuant to Article 64 of its Rules of Procedure, put two questions in writing to the parties.
20 First, the Court found that the request to adapt the claim for annulment of Decision 2007/868 had been brought after the expiry of the two-month period following the publication or notification of that decision, provided for in the fifth paragraph of Article 230 EC, so that, on the date that that request was made, the applicant was out of time for lodging an application seeking annulment of that act. Although that finding was not challenged by the defendants or the interveners, the Court, observing that, according to settled case-law, the issue of whether proceedings have been brought out of time constitutes an absolute bar to proceedings, which the Community judicature may, indeed must, raise of its own motion, invited the parties to state their views in writing on whether that two-month period applies also where an action for annulment of a Community act is brought not by means of an application but by means of a request to adapt a claim seeking annulment of an earlier act that has been repealed and replaced by the act in question, an adaptation that is acceptable in principle to the Community judicature on grounds of the proper administration of justice and the requirements of procedural efficiency.
21 Second, the Court requested the main parties to state their position expressly in writing on some of the observations made by the Kingdom of the Netherlands in its statement in intervention regarding the applicant’s option, on the one hand, to bring an appeal against the order of the court hearing the application for interim measures and, on the other hand, to bring proceedings before the court determining the merits.
22 The parties answered those questions in writing within the prescribed period.
23 In its written answer to the Court’s questions, received at the Registry on 28 October 2009, the applicant sought leave to adapt its claims so that its action is also for annulment of Decision 2008/583 (referred to, due to a typographical error, as ‘Decision 2008/538’), Decision 2009/62 and Regulation No 501/2009, in so far as those measures apply to the applicant. The Court requested the other parties to submit their observations on that request orally at the hearing.
24 The parties presented oral argument and replied to the questions put by the Court at the hearing on 25 November 2009. In its oral submissions, the applicant specified the measures of which it sought annulment in so far as they concerned it. The defendants and the interveners stated that they did not object in principle to adaptation of the claims as sought by the applicant in its written response to the questions from the Court, and formal note of this was taken in the minutes of the hearing.
25 On 22 December 2009 the Council adopted Implementing Regulation (EU) No 1285/2009 implementing Article 2(3) of Regulation No 2580/2001 and repealing Regulation No 501/2009 (OJ 2009 L 346, p. 39). That regulation continues to include the applicant’s name in the list at issue.
Forms of order sought
26 The applicant claims that the Court should:
– annul the contested decision, Decisions 2007/868, 2008/583 and 2009/62 and Regulation No 501/2009, in so far as those measures concern it;
– declare that Regulation No 2580/2001 is not applicable to it;
– order the Council to pay the costs.
27 In its observations on the statement in intervention of the Kingdom of the Netherlands, the applicant offers, if the Court sees fit, to supply evidence concerning the nature and type of interlocutory proceedings under Netherlands law and the powers of a court hearing an application for interim measures, which involve hearing expert witnesses and/or producing legal text books.
28 The Council contends that the Court should:
– dismiss the application as unfounded in its entirety; and
– order the applicant to pay the costs.
29 The Kingdom of the Netherlands and the Commission support the forms of order sought by the Council.
Law
1. The procedural consequences of the repeal of the contested decision and its replacement by other acts during the course of the proceedings
30 As is made clear in the foregoing, since the application was lodged the contested decision has been repealed and replaced in turn by Decision 2007/868, Decision 2008/583, Decision 2009/62, Regulation No 501/2009, and finally by Implementing Regulation No 1285/2009. The applicant has sought leave on each occasion to adapt its original claims so that its action is also for annulment of those three decisions and of Regulation No 501/2009, in so far as those acts concern it. It has not, however, up until the date of delivery of the present judgment, sought to adapt its claims in order that its action should also be for annulment of Implementing Regulation No 1285/2009. It has, moreover, maintained its claim for annulment of the earlier measures that have been repealed and replaced.
31 Those applications must be allowed and the applicant must be regarded as being entitled to seek the annulment of the contested decision, Decisions 2007/868, 2008/583 and 2009/62 and Regulation No 501/2009 in so far as those measures concern it, irrespective in this case of whether or not those claims were brought within two months of the publication or notification of the measure to which they relate, as provided for in the fifth paragraph of Article 230 EC.
32 In that regard, the Court considers that that period applies in principle both where an action for annulment of an act is brought by means of an application and where it is brought in the course of proceedings and in accordance with the case-law laid down in Case 14/81 Alpha Steel v Commission [1982] ECR 749, paragraph 8, by means of a request to adapt a claim for annulment of an earlier act that has been repealed and replaced by the act in question.
33 This outcome is justified by the fact that rules concerning time-limits for bringing proceedings are mandatory and must be applied by the court in question in such a way as to safeguard legal certainty and equality of persons before the law (Case C‑229/05 P PKK and KNK v Council [2007] ECR I‑439, paragraph 101), whilst avoiding any discrimination or arbitrary treatment in the administration of justice (Case 152/85 Misset v Council [1987] ECR 223, paragraph 11).
34 However, by way of an exception to that rule, the Court considers, as do the Council and the Commission, that that period is not applicable in proceedings in which, first, the act in question and the measure which that act repeals and replaces have, with regard to the person concerned, the same subject-matter, are essentially based on the same grounds and have essentially the same content, and therefore differ only by reason of their respective scopes of application ratione temporis and, second, the request to adapt a claim is not based on any new plea, fact or evidence apart from the actual adoption of the act in question repealing and replacing that earlier act. That is precisely the case here, as all the parties acknowledged in their written and oral observations in response to the questions put by the Court.
35 In such circumstances, since the subject-matter and context of the dispute as established by the original action have not undergone any alteration except as regards its temporal dimension, legal certainty is in no way affected by the fact that the request to adapt the claim was made after the two-month period in question had expired.
36 The exception is also justified in the light of the measures an institution is obliged to take under Article 233 EC in order to comply with a judgment annulling a measure adopted by it.
37 It should be borne in mind in that regard that, in order to comply with such a judgment, the institution is required to have regard not only to the operative part of the judgment but also to the grounds constituting its essential basis, in so far as they are necessary to determine the exact meaning of what is stated in the operative part. It is those grounds which, first, identify the precise provision held to be illegal and, second, indicate the specific reasons which underlie the finding of illegality contained in the operative part and which the institution concerned must take into account when replacing the annulled measure (Joined Cases 97/86, 99/86, 193/86 and 215/86 Asteris and Others v Commission [1988] ECR 2181, paragraph 27).
38 However, although a finding of illegality in the grounds of a judgment annulling a measure primarily requires the institution which adopted the measure to eliminate that illegality in the measure intended to replace the annulled measure, it may also, in so far as it relates to a provision with specific scope in a given area, give rise to other consequences for that institution (Asteris and Others v Commission, paragraph 28).
39 In cases such as this, concerning the annulment of a Community decision freezing funds which, by virtue of Article 1(6) of Common Position 2001/931, must be reviewed at regular intervals, the institution which adopted the measure is first of all under an obligation to ensure that subsequent fund-freezing measures adopted after the annulling judgment and governing periods subsequent to that judgment are not vitiated by the same defects or unlawfulness (see, to that effect, Case T‑256/07 People’s Mojahedin Organization of Iran v Council [2008] ECR II‑3019, ‘PMOI I’, paragraph 62; see, by analogy, Asteris and Others v Commission, paragraph 29).
40 It is in addition to be acknowledged that, by virtue of the retroactive effect of annulling judgments, the finding of unlawfulness takes effect from the date on which the annulled measure entered into force (Asteris and Others v Commission, paragraph 30).
41 In this case, that might mean that, in the event of annulment of the contested decision, the Council might also be under an obligation to eliminate from all subsequent fund-freezing measures repealing and replacing the contested decision, adopted up until the time the annulling judgment was delivered, any defects or unlawfulness vitiating that decision (see, to that effect and by analogy, Asteris and Others v Commission, paragraph 30, and PMOI I, paragraph 64).
42 In circumstances such as those of the present case, described in paragraph 34 above, any finding in the contested decision that the applicant’s funds were frozen unlawfully might therefore apply not only in respect of the period during which that decision was in force but also in respect of the periods of validity of all the subsequent fund-freezing measures challenged during the proceedings (see, to that effect and by analogy, Asteris and Others v Commission, paragraph 31).
43 By refusing to comply with the obligation described in paragraph 41 above the Council is failing to fulfil its obligations under Article 233 EC, which may be enforced under the procedure provided for in Article 232 EC (see, to that effect and by analogy, Asteris and Others v Commission, paragraph 32).
44 In those circumstances, and in the spirit of the case-law cited in paragraphs 45 to 48 of PMOI I, it would be contrary to the principle of due administration of justice and to the requirements of procedural economy to oblige the applicant to lodge its request to adapt its claims, in the course of the proceedings, within the two-month period provided for in the fifth paragraph of Article 230 EC, failing which it would be inadmissible.
45 Lastly, in accordance with settled case-law in the field of actions brought against successive fund-freezing measures adopted pursuant to Regulation No 2580/2001, the applicant still has an interest in obtaining annulment of all the measures contested in the present action, although they will have been repealed and replaced by other measures by the date on which the present judgment is delivered (see, to that effect, PMOI I, paragraph 48 and the case-law cited).
2. The claims for annulment
46 Since the statements of reasons relied upon by the Council in order to justify the contested decision, Decisions 2007/868, 2008/583 and 2009/62 and Regulation No 501/2009, respectively, are identical, the pleas raised in support of the claims for annulment of those measures are also identical. Henceforth in this judgment, any reference to the contested decision is therefore deemed to include Decisions 2007/868, 2008/583 and 2009/62 and Regulation No 501/2009 also.
47 In that regard, the applicant relies in essence on five pleas. The first, which subdivides into four parts, alleges infringement of Article 1(1), (2) and (4) of Common Position 2001/931 and of Article 2(3) of Regulation No 2580/2001. The second alleges infringement of the principle of proportionality. The third alleges infringement of Article 1(6) of Common Position 2001/931, of Article 2(3) of Regulation No 2580/2001 and of an essential procedural requirement. The fourth alleges infringement of the fundamental right to unfettered enjoyment of property. Lastly, the fifth alleges infringement of the obligation to state reasons laid down in Article 253 EC.
48 It is appropriate to start by examining the first plea, followed by the third plea.
The first plea: infringement of Article 1(1), (2) and (4) of Common Position 2001/931 and of Article 2(3) of Regulation No 2580/2001
49 This plea subdivides into four parts, alleging (i) that the applicant is not a person, group or entity within the meaning of the provisions that have allegedly been infringed, (ii) that no competent authority has taken a decision in respect of it within the meaning of those provisions, (iii) that it has not been established that the applicant intended to facilitate the commission of terrorist acts and (iv) that the applicant can no longer be regarded as facilitating the commission of such acts.
The first part of the first plea
– Arguments of the parties
50 The applicant claims that it does not meet the definition of ‘persons, groups and entities involved in terrorist acts’ given in Article 1(2) of Common Position 2001/931. It follows therefore from Article 1(1) of that Common Position that neither that act nor, in consequence, Regulation No 2580/2001 which implements it apply to the applicant.
51 First, since the applicant is not a natural person it does not fall within the first indent of Article 1(2) of Common Position 2001/931, which, in its view, refers only to natural persons and not to legal persons. It pleads to that effect both that the second indent of that provision draws a distinction between groups, entities and persons, and that the list at issue includes only natural persons under the heading ‘Persons’, whereas several legal persons are included under the heading ‘Groups and entities’.
52 Second, the applicant clearly does not fall within the second indent of Article 1(2) of that Common Position, since, according to the wording of the statement of reasons, it is merely alleged to have raised funds for certain organisations belonging to Hamas, which in turn made them available for the commission of terrorist acts or in order to facilitate the commission of such acts.
53 The applicant states in its reply that this part of the first plea alleges that the Council lacked competence to include legal persons within the scope of Article 2(3)(ii) of Regulation No 2580/2001. If it had done so it would have gone beyond the scope of Common Position 2001/931.
54 The Council, supported by the Kingdom of the Netherlands and by the Commission, disputes the applicant’s arguments.
– Findings of the Court
55 Article 1(2) of Common Position 2001/931 provides:
‘For the purposes of this Common Position, “persons, groups and entities involved in terrorist acts” shall mean:
– persons who commit, or attempt to commit, terrorist acts or who participate in, or facilitate, the commission of terrorist acts,
– groups and entities owned or controlled directly or indirectly by such persons; and persons, groups and entities acting on behalf of, or under the direction of, such persons, groups and entities, including funds derived or generated from property owned or controlled directly or indirectly by such persons and associated persons, groups and entities.’
56 The applicant’s contention that the term ‘persons’ in the first indent of that provision refers only to natural persons cannot be accepted.
57 According to its normal legal meaning, which should be used unless otherwise specified by the legislature, the term ‘person’ means someone or something with legal personality, and therefore both a natural person and a legal person.
58 The ‘persons’ referred to in the first indent of Article 1(2) of Common Position 2001/931 may therefore be both natural and legal persons, whereas the ‘groups and entities’ referred to in the second indent of Article 1(2) of Common Position 2001/931 may be any other types of social organisations which although they do not have legal personality none the less exist in a more or less structured form.
59 As the Council correctly states, that interpretation is confirmed by Article 1(5) of Common Position 2001/931, which reads: ‘[t]he Council shall work to ensure that names of natural or legal persons, groups or entities listed in the Annex have sufficient particulars appended to permit effective identification of specific human beings, legal persons, entities or bodies’.
60 As a legal person, the applicant, contrary to its assertion, does in fact fall within the scope of the first indent of Article 1(2) of Common Position 2001/931 and therefore also of Regulation No 2580/2001.
61 The applicant’s contention that the list annexed to Common Position 2001/931 and, similarly, the list at issue include only natural persons under the heading ‘Persons’, whereas several legal persons, of which the applicant is one, are included under the heading ‘Groups and entities’, is irrelevant in that regard. Those lists, drawn up solely for the purposes of implementing, in individual specified cases, Common Position 2001/931 and Regulation No 2580/2001, have in fact no effect on the definition of ‘persons, groups and entities’ given in those measures. The same applies, therefore, as regards any errors in the classification of ‘persons’ and ‘groups and entities’ which they may contain.
62 The first part of the first plea in law must, therefore, be rejected as unfounded.
The second part of the first plea
– Arguments of the parties
63 The applicant submits that, contrary to what is asserted in the statement of reasons, no competent authority took a decision in respect of the applicant within the meaning of Article 1(4) of Common Position 2001/931. It does not therefore fall within the scope of Regulation No 2580/2001.
64 It argues that neither the Sanctieregeling nor the order of the court hearing the application for interim measures falls into any of the four decision categories covered by that provision, namely, the instigation of an investigation or prosecution for a terrorist act, the instigation of an investigation or prosecution for an attempt to perpetrate such an act, the instigation of an investigation or prosecution for an attempt to participate in or facilitate such an act, or conviction for such deeds. In particular, by its order, the court hearing the application for interim measures merely dismissed the applicant’s claims by an interlocutory order, without taking a decision in respect of the applicant within the meaning of that provision.
65 In the alternative, the applicant claims that neither the ministers who adopted the Sanctieregeling nor the President of the Civil Law Section of the District Court of The Hague, the court hearing the application for interim measures, can be regarded as competent authorities within the meaning of Article 1(4) of Common Position 2001/931.
66 First, those authorities do not have any competence with regard to the instigation of investigations or prosecution for terrorist activities, since in the Netherlands such activities fall within the exclusive competence of the Officier van justitie (Public Prosecutor).
67 Second, those authorities do not have any competence as regards delivering a conviction in respect of terrorist activities, since this falls within the exclusive competence of a strafrechter (criminal court).
68 In the further alternative, the applicant claims that, contrary to what is asserted in the statement of reasons, the court hearing the application for interim measures did not in any way ‘endorse’ the Sanctieregeling. That court merely dismissed, in interlocutory proceedings, the applicant’s application seeking an order preventing the Netherlands Government from freezing its assets. Besides which, a ministerial regulation has by definition the force of law and would never be ‘endorsed’ by the act of a judicial authority.
69 In its reply, the applicant also states that if, as the Council asserts, the court hearing the application for interim measures is indeed a competent ‘judicial’ authority, the ministers cannot be an ‘equivalent’ authority in that sphere since, according to the second subparagraph of Article 1(4) of Common Position 2001/931, such authorities are mutually exclusive. The Council’s assertion is therefore contradictory and incomprehensible.
70 In its observations in response to the statement in intervention of the Kingdom of the Netherlands, the applicant adds that neither the nature of interlocutory proceedings in Netherlands law nor the fact that they are not criminal proceedings is relevant for the purposes of examining this plea. The Kingdom of the Netherlands’ observations concerning the possibility of bringing an appeal against the order of the court hearing the application for interim measures and the fact that proceedings have not been brought before a court to determine the merits of the case are also irrelevant.
71 In the alternative, in so far as the Court seeks to obtain evidence as to the nature, content and procedural aspects of interlocutory proceedings in Netherlands law, the applicant offers to supply evidence by means of expert witnesses and/or production of reference books on the law.
72 The applicant also submits that, contrary to what the Kingdom of the Netherlands contends, the catalogue of decisions covered by Article 1(4) of Common Position 2001/931 is exhaustive. That interpretation is confirmed both by the letter of that provision, in particular in the German version, and by logic. In the provision at issue, the term ‘decision’, with an undefined and unlimited content, makes sense only in the light of the catalogue that follows. In any event, the catalogue in question is significant and shows that decisions must be of a particular type, equivalent to or closely resembling either the instigation of an investigation, or the commencement of a prosecution, or indeed a conviction. In the present case, the order of the court hearing the application for interim measures clearly does not fulfil those conditions.
73 The Council, supported by the Kingdom of the Netherlands and by the Commission, challenges the applicant’s arguments.
74 The Council points out, in particular, that the contested decision is based solely on the order of the court hearing the application for interim measures, which in its view constitutes a decision of a competent authority, in this case a judicial authority, taken in respect of the applicant, within the meaning of Article 1(4) of Common Position 2001/931. That is clear from the statement of reasons, but the Council adds that it could also have regarded the Sanctieregeling as a decision of a competent authority within the meaning of that provision.
75 The Kingdom of the Netherlands also contends that the order of the court hearing the application for interim measures constitutes the decision of the competent national authority which provided the basis for the Council’s decision to include the applicant in the list at issue.
– Findings of the Court
76 In Case T‑228/02 Organisation des Modjahedines du peuple d’Iran v Council [2006] ECR II‑4665 (‘OMPI’), PMOI I, Case T‑284/08 People’s Mojahedin Organization of Iran v Council [2008] ECR II‑3487 (‘PMOI II’), and Case T‑341/07 Sison v Council [2009] ECR II-0000 (‘Sison II’) the Court set out and subsequently confirmed: (a) the conditions for implementing Article 1(4) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001; (b) the burden of proof incumbent on the Council in that context; and (c) the scope of judicial review in such matters.
77 As the Court pointed out in paragraphs 115 and 116 of OMPI, paragraph 130 of PMOI I, paragraph 50 of PMOI II and paragraph 92 of Sison II, the matters of fact and law capable of affecting the application of a fund-freezing measure to a person, group or entity are determined by Article 2(3) of Regulation No 2580/2001. In the words of that provision, the Council, acting by unanimity, is to establish, review and amend the list of persons, groups and entities to whom and to which that regulation applies, in accordance with the provisions laid down in Article 1(4) to (6) of Common Position 2001/931. The list at issue must, therefore, be drawn up, in accordance with Article 1(4) of Common Position 2001/931, on the basis of precise information or material in the relevant file which indicates that a decision has been taken by a competent authority in respect of the persons, groups and entities concerned, whether it concerns the instigation of investigations or prosecution for a terrorist act, or an attempt to perpetrate, participate in or facilitate such an act, based on serious and credible evidence, or whether it concerns conviction for such deeds. ‘Competent authority’ means a judicial authority or, where judicial authorities have no competence in that area, an equivalent authority in that sphere. In addition, the names of the persons and entities appearing in that list must be reviewed at regular intervals and at least once every six months to ensure that there are still grounds for keeping them in the list, in accordance with Article 1(6) of Common Position 2001/931.
78 In paragraph 117 of OMPI, paragraph 131 of PMOI I, paragraph 51 of PMOI II and in paragraph 93 of Sison II, the Court inferred from those provisions that the procedure which may culminate in a measure to freeze funds under the relevant legislation takes place at two levels, one national, the other Community. In the first stage, a competent national authority, as a rule judicial, must take in respect of the party concerned a decision satisfying the definition in Article 1(4) of Common Position 2001/931. If it is a decision to instigate investigations or to prosecute, it must be based on serious and credible evidence. In the second stage, the Council, acting by unanimity, must decide whether to include the party concerned in the list at issue, on the basis of precise information or material in the relevant file which indicates that such a decision has been taken. Next, the Council must, at regular intervals, and at least once every six months, be satisfied that there are grounds for continuing to include the party concerned in the list at issue. Verification that there is a decision of a national authority meeting that definition is an essential precondition for the adoption, by the Council, of an initial decision to freeze funds, whereas verification of the consequences of that decision at the national level is essential in the context of the adoption of a subsequent decision to freeze funds.
79 In paragraph 123 of OMPI, paragraph 132 of PMOI I, paragraph 52 of PMOI II and paragraph 94 of Sison II the Court noted, inter alia, that under Article 10 EC, relations between the Member States and the Community institutions are governed by reciprocal duties to cooperate in good faith (see Case C‑339/00 Ireland v Commission [2003] ECR I‑11757, paragraphs 71 and 72 and the case-law cited). That principle is of general application and is binding in, inter alia, the area of police and judicial cooperation in criminal matters (commonly known as ‘Justice and Home Affairs’) (JHA) governed by Title VI of the EU Treaty in its version prior to the Treaty of Lisbon, which is moreover entirely based on cooperation between the Member States and the institutions (Case C‑105/03 Pupino [2005] ECR I‑5285, paragraph 42).
80 In paragraph 124 of OMPI, paragraph 133 of PMOI I, paragraph 53 of PMOI II and paragraph 95 of Sison II the Court found that, in a case of application of Article 1(4) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001, provisions which introduce a specific form of cooperation between the Council and the Member States in the context of combating terrorism, that principle entails, for the Council, the obligation to defer as far as possible to the assessment conducted by the competent national authority, at least where it is a judicial authority, in particular in respect of the existence of ‘serious and credible evidence’ on which its decision is based.
81 As the Court ruled in paragraph 134 of PMOI I, paragraph 54 of PMOI II and paragraph 96 of Sison II, it follows from the foregoing that, although it is indeed for the Council to prove that freezing of the funds of a person, group or entity is or remains legally justified, in the light of the relevant legislation, that burden of proof has a relatively limited purpose in respect of the Community procedure for freezing funds. In the case of an initial decision to freeze funds, the burden of proof essentially relates to the existence of precise information or material in the relevant file which indicates that a decision by a national authority meeting the definition laid down in Article 1(4) of Common Position 2001/931 has been taken with regard to the person concerned. Furthermore, in the case of a subsequent decision to freeze funds, after review, the burden of proof essentially relates to whether the freezing of funds remains justified, having regard to all the relevant circumstances of the case and, most particularly, to the action taken following that decision of the competent national authority.
82 With regard to the review carried out by the Court, the latter recognised, in paragraph 159 of OMPI, paragraph 137 of PMOI I, paragraph 55 of PMOI II and paragraph 97 of Sison II, that the Council has broad discretion as to what matters to take into consideration for the purpose of adopting economic and financial sanctions on the basis of Articles 60 EC, 301 EC and 308 EC, consistent with a common position adopted on the basis of the common foreign and security policy. This discretion concerns, in particular, the assessment of the considerations of appropriateness on which such decisions are based.
83 However, although the Court acknowledges that the Council possesses some latitude in that sphere, that does not mean that the Court is not to review the interpretation made by the Council of the relevant facts (see PMOI I, paragraph 138, PMOI II, paragraph 55, and Sison II, paragraph 98). The Community judicature must not only establish whether the evidence relied on is factually accurate, reliable and consistent, but must also ascertain whether that evidence contains all the relevant information to be taken into account in order to assess the situation and whether it is capable of substantiating the conclusions drawn from it. However, when conducting such a review, it must not substitute its own assessment of what is appropriate for that of the Council (see, by analogy, Case C‑525/04 P Spain v Lenzing [2007] ECR I‑9947, paragraph 57 and the case-law cited).
84 In this case, it is first of all to be ascertained, in accordance with that case-law, whether the contested decision was taken on the basis of precise information or material in the file indicating that a decision meeting the definition laid down in Article 1(4) of Common Position 2001/931 had been taken with regard to the applicant (see, to that effect, Sison II, paragraph 99).
85 In this respect, paragraph 3 of the statements of reasons annexed to the Council’s letters of 23 April and 29 June 2007 addressed to the applicant make reference to two decisions which could be presumed to have been taken by competent authorities within the meaning of Article 1(4) of Common Position 2001/931, namely: the Sanctieregeling and the order of the court hearing the application for interim measures.
86 In paragraph 24 of its defence, the Council asserted that it had based the contested decision solely on the order of the court hearing the application for interim measures, although in paragraph 22 of the defence it stated that it could also have based the decision on the Sanctieregeling. That assertion, which was supported by the Kingdom of the Netherlands, also appears to be confirmed, as the Council also pointed out, by the fact that the statements of reasons notified to the applicant refer, in the finding contained in paragraph 4 thereof, only to ‘a decision taken [in respect of the applicant] by a competent authority within the meaning of Article 1(4) of Common Position 2001/931’, in the singular.
87 That being so, and contrary to what was the case as regards the judicial decisions and the Sanctieregeling at issue in Sison II, it is not possible in this case to take into consideration the order of the court hearing the application for interim measures in isolation and without having regard at the same time to the Sanctieregeling, since the latter was indeed the original reason why the matter was referred to the court hearing the application for interim measures and the application for its suspension was in fact the subject-matter of the dispute brought before that court (see also Al‑Aqsa, paragraph 18). That is clearly the construction to be placed on the explicit, detailed reference to the Sanctieregeling, also contained in the statements of reasons.
88 With regard, therefore, in the first place to the Sanctieregeling, the latter constitutes a decision of an administrative authority and not of a judicial authority. However, that circumstance is not in itself decisive. As the Council correctly points out, the wording of Article 1(4) of Common Position 2001/931 expressly states that a non-judicial authority may also be classified as a competent authority for the purposes of that provision.
89 This interpretation is also confirmed by the case-law of the Court. In particular, in PMOI I (see paragraph 6 thereof), the Council had acted on the basis of an order of the Secretary of State for the Home Department (Home Secretary) of the United Kingdom proscribing the applicant in that case as an organisation involved in terrorism, under the Terrorism Act 2000. In paragraph 144 of PMOI I, the Court held that that order did indeed appear, in the light of the relevant national legislation, to be a decision of a competent national authority meeting the definition contained in Article 1(4) of Common Position 2001/931.
90 In the present case, it is common ground (see also Al‑Aqsa, paragraph 16) that the Sanctieregeling was adopted on 3 April 2003, by the Netherlands Minister for Foreign Affairs in agreement with the Minister for Finance, in accordance with the Sanctiewet 1977 (Law on sanctions of 1977), as amended on 16 May 2002, which confers competence on those authorities to freeze the funds of persons and entities, in the context of the implementation of United Nations Security Council Resolution 1373 (2001) of 28 September 2001 laying down strategies to combat terrorism by all means and, in particular, to combat the financing of terrorism. It is therefore a decision that is very similar in substance and form to the decision at issue in PMOI I.
91 It is not claimed moreover that a decision such as the Sanctieregeling falls within the competence of the judicial authorities except with regard to judicial review of its lawfulness.
92 In the second place, the order of the court hearing the application for interim measures constitutes in any event a decision of a judicial authority delivered at the end of proceedings concerning the apparent lawfulness of the Sanctieregeling, suspension of which the applicant was seeking in accordance with Netherlands law.
93 In those circumstances, the applicant’s argument that the court hearing the application for interim measures merely dismissed its application for suspension of the Sanctieregeling, without taking a ‘decision’ in respect of the applicant within the meaning of Article 1(4) of Common Position 2001/931, must be rejected as being based on an excessively legalistic reading of the order of the court hearing the application for interim measures.
94 The same applies to the applicant’s argument that the court hearing the application for interim measures did not strictly speaking ‘endorse’ the Sanctieregeling.
95 That being so, it is true that, to the same extent as the Sanctieregeling, the order of the court hearing the application for interim measures does not strictly speaking constitute a decision ‘instigat[ing] investigations or prosecution for a terrorist act’ nor does it lead to the ‘conviction’ of the applicant, within the strictly criminal meaning of the term.
96 The Court considers none the less that, in the light of its content, scope and context, the order of the court hearing the application for interim measures, taken together with the Sanctieregeling, does indeed constitute a ‘decision’ taken by a competent authority, within the meaning of Article 1(4) of Common Position 2001/931 and of Article 2(3) of Regulation No 2580/2001.
97 In that regard, it should be borne in mind that, in determining the purport of a provision of Community law, its wording, context and objectives must all be taken into account (see Case C-280/04 Jyske Finans [2005] ECR I‑10683, paragraph 34 and the case-law cited).
98 Clearly, the provisions at issue in the present case do not require that the national ‘decision’ should be taken in the context of criminal proceedings stricto sensu, even if that is more often the case. That is confirmed by the second subparagraph of Article 1(4) of Common Position 2001/931, which, by making express provision for the possibility that judicial authorities would have ‘no competence in the area covered’ by the paragraph in question, infers that such decisions might fall within an area other than that of criminal law stricto sensu. Likewise, the second sentence of the first subparagraph of Article 1(4) of Common Position 2001/931 provides that persons, groups and entities identified by the Security Council of the United Nations as being related to terrorism and against whom it has ordered sanctions may be included in the list. However, sanctions ordered by the Security Council are not necessarily criminal sanctions (see, to that effect, Joined Cases C‑402/05 P and C‑415/05 P Kadi and Al Barakaat International Foundation v Council and Commission [2008] ECR I-6351, paragraph 358, and the judgment of 11 July 2007 in Case T‑47/03 Sison v Council (‘Sison I’), not published in the ECR, paragraph 101).
99 In those circumstances, the applicant’s argument that criminal investigations and prosecutions, on the one hand, and criminal convictions, on the other hand, fall within the exclusive competence of the officier van justitie and the strafrechter, respectively, must be rejected as irrelevant.
100 In the light of the objectives of the provisions at issue in this case, in the context of the implementation of United Nations Security Council Resolution 1373 (2001), the purpose of the national proceedings in question must none the less be to combat terrorism in the broadest sense.
101 In Sison II (paragraph 111), the Court ruled that, having regard both to the wording, context and objectives of the provisions at issue in that case (see, especially, recital 1 in the preamble to Common Position 2001/931) and to the major part played by the national authorities in the fund-freezing process provided for in Article 2(3) of Regulation No 2580/2001, a decision to ‘instigat[e] … investigations or prosecut[e]’ must, if the Council is to be able validly to invoke it, form part of national proceedings seeking, directly and chiefly, the imposition on the person concerned of measures of a preventive or punitive nature, in connection with the combating of terrorism and by reason of that person’s involvement in terrorism. The Court held that that requirement is not satisfied by a decision of a national judicial authority ruling only incidentally and indirectly on the possible involvement of the person concerned in such activity in relation to a dispute concerning, for example, rights and duties of a civil nature.
102 Unlike the judicial decisions at issue in Sison II, the order of the court hearing the application for interim measures relied upon by the Council in the present case forms a sufficiently direct part of national proceedings seeking chiefly to impose an economic sanction on the person concerned, namely the freezing of its funds under the Sanctieregeling itself, as a result of that person’s involvement in terrorist activity (see paragraph 90 above).
103 In that regard, the applicant is correct in stating that neither the nature of interlocutory proceedings in Netherlands law nor the fact that they are not criminal proceedings is relevant for the purposes of this assessment. It does not therefore appear necessary to follow up the applicant’s offer to supply evidence with regard to those matters (see paragraphs 27 and 71 above).
104 The order of the court hearing the application for interim measures, taken together with the Sanctieregeling, thus appears, in the light of the relevant national legislation, to be a decision of a competent national authority meeting the definition contained in Article 1(4) of Common Position 2001/931.
105 Such a decision could therefore have been regarded at the time when it was taken, together with the Sanctieregeling, as meeting the requirements of Article 1(4) of Common Position 2001/931 and could therefore in principle, as such, justify the adoption of a measure freezing the applicant’s funds under Article 2(3) of Regulation No 2580/2001.
106 As for whether that decision could also provide a valid basis for the contested decision at the date when it was adopted, in the light of all the relevant circumstances of this case and, in particular, the actions that were taken as a result of it under national law, that will be examined below in relation to the third plea.
107 With that reservation, the second part of the first plea in law must be rejected as unfounded.
The third part of the first plea
– Arguments of the parties
108 The applicant submits that neither the statement of reasons, the order of the court hearing the application for interim measures, the Sanctieregeling, nor even the AIVD memorandum, reveal the slightest intention, culpability or knowledge on its part concerning support of terrorist activities. The evidence of such factors, which in its view must be provided by the Council, is decisive for the purposes of applying Common Position 2001/931 and Regulation No 2580/2001, in particular Article 2(3)(ii) thereof, which relates to legal persons ‘facilitating’ the commission of terrorist acts.
109 The court hearing the application for interim measures, in particular, merely found that the funds raised by the applicant had benefited organisations associated with Hamas and that those organisations had in turn made those funds available to that movement in order to enable it to commit or facilitate terrorist acts (see, in particular, paragraph 3.2 of the order of the court hearing the application for interim measures). Thus, the assertion contained in the statement of reasons that the court hearing the application for interim measures found that the applicant should be regarded as an organisation supporting Hamas and enabling that movement to commit or facilitate terrorist acts is incorrect. On the contrary, the words used by the court hearing the application for interim measures indicate that it by no means established that the applicant knew or should have known that the funds which it made available to other organisations would be used for terrorist purposes. The applicant denies all knowledge of this.
110 In its reply, the applicant adds that evidence of its good faith is also provided by the fact that it authorised the court hearing the application for interim measures to consult the AIVD’s confidential file.
111 As regards the assessments contained in the AIVD memorandum, the applicant states, in response to the statement in intervention of the Kingdom of the Netherlands, that the fact that the court hearing the application for interim measures extensively quoted from that memorandum in both its orders does not by any means imply that it approved of all the wording. That applies, in particular, with regard to the active part allegedly played by the applicant and its directors in raising funds for Hamas.
112 As regards the argument of the Kingdom of the Netherlands that the term ‘knowledge’ implies not only ‘knowing’ but also ‘being expected to know’, the applicant points out that this is not supported by the actual words used by the legislature in Article 1(3)(k) of Common Position 2001/931, since is would have been easy for the legislature to have used another form of words if that had been its intention.
113 In any event, it is not clear even from the order of the court hearing the application for interim measures that the applicant ‘should have known’ that the funds it was paying out were being used for terrorist purposes.
114 In that regard, the applicant adds that, contrary to what the Kingdom of the Netherlands states, it is by no means clear from the order of the court hearing the application for interim measures (in particular paragraph 3.4 thereof) that that court was convinced that the applicant had or could have been expected to have knowledge that its funds were ultimately being used for terrorist purposes.
115 The applicant concludes that the Council committed a manifest error of assessment in assuming that it knew that some of the organisations to which donations were given were associated with Hamas and that those organisations were in turn using those funds to commit terrorist attacks.
116 In any event, the applicant states that Hamas was not one of the organisations that was included as such (by Council Common Position 2003/651/CFSP of 12 September 2003 updating Common Position 2001/931/CFSP and repealing Common Position 2003/482/CFSP (OJ 2003 L 229, p. 42)) in the list at issue until 12 September 2003, that is to say, subsequent to the order of the court hearing the application for interim measures and even subsequent to the initial Community measure freezing the applicant’s funds. Up until that date only the terrorist wing of Hamas, identified in the relevant Council acts as ‘Hamas-Izz al-Din al-Qassem’ (see, in particular, Council Common Position 2003/482/CFSP of 27 June 2003 updating Common Position 2001/931/CFSP and repealing Common Position 2003/402/CFSP (OJ 2003 L 160, p. 100)), was included in that list. The applicant infers from this that up until 12 September 2003 the average European citizen, and hence the applicant itself, was entitled to consider that donations made to the humanitarian wing of Hamas would not be used for terrorist purposes.
117 The Council, supported by the Kingdom of the Netherlands and by the Commission, contends that evidence has been supplied in this case, in accordance with the relevant provisions, that the applicant had knowledge that its involvement in the activities of Hamas would contribute to the criminal activities of that group.
118 The Kingdom of the Netherlands adds that ‘knowledge’, for the purposes of those provisions means not only that it ‘knew’ but also that it ‘should have known’ or ‘would have been expected to know’.
– Findings of the Court
119 As the Council correctly states, Regulation No 2580/2001 itself does not expressly provide that the Council is required to prove that the person concerned had the ‘intention’ to commit a terrorist act, or to participate in or facilitate commission of such an act. However, evidence of such intention is required by Common Position 2001/931, Article 1(3)(k) of which, relied on as against the applicant in the statement of reasons, provides that participating in the activities of a terrorist group must involve ‘knowledge of the fact that such participation will contribute to the criminal activities of the group’. Such evidence is therefore also required under Article 1(4) of Regulation No 2580/2001, in view of the wording of that provision.
120 It is therefore necessary to establish whether such evidence has been properly adduced in the present case.
121 It is apparent in this case, from the statement of reasons of the Sanctieregeling, that the latter was adopted, pending the adoption of a Community decision directed against the applicant on the basis of Regulation No 2580/2001, on the ground that there was evidence that the applicant had made transfers of funds to organisations supporting terrorism in the Middle East (see also Al‑Aqsa, paragraph 17).
122 The applicant brought proceedings against the Kingdom of the Netherlands before the court hearing the application for interim measures seeking, in particular, suspension of the application of the measures laid down by the Sanctieregeling.
123 By the interim order of the court hearing the application for interim measures, that court ruled, in particular, as follows:
‘1. Facts
On the basis of the documents on the file and the hearing which was held on 6 May 2003, the [court hearing the application for interim measures] takes its decision on the grounds of the following facts.
...
1.9. On 3 April 2003, the Minister for Foreign Affairs adopted [the Sanctieregeling] ...
1.10. The statement of reasons of [the Sanctieregeling] asserts that there is evidence that the [applicant] made transfers of funds to organisations supporting terrorism in the Middle East.
1.11. By letter of 9 April 2003, the director of the [AIVD] communicated the following facts to the Director General for Political Affairs of the Ministry of Foreign Affairs:
“... In order to confirm the communications made earlier, we should like to provide the following information. In the course of carrying out its statutory duties, the AIVD has learned the following facts from reliable but vulnerable sources.
The Al‑Aqsa organisation, established in the Netherlands, founded on 24 August [1993] ..., whose registered office is in Heerlen, has raised money in the Netherlands for organisations associated with Hamas in the Middle East. Some of those organisations make money available for the commission or facilitation of terrorist activities.
The AIVD came to the conclusion that a distinction can no longer be maintained between the social and terrorist activities of Hamas. Hamas, with which the fund-raising organisations before the court are associated, must be regarded as a group of organisations that facilitates both humanitarian and terrorist activities, those activities being complementary.
The Al‑Aqsa foundation has, or had, contact with organisations raising funds for Hamas. The Al‑Aqsa foundation is or was associated with Al‑Aqsa in Germany (banned in mid-2002), Al‑Aqsa in Denmark (assets frozen end 2002), Al‑Aqsa in Belgium and with organisations raising funds for Hamas in the United Kingdom, Italy, Switzerland, Sweden and France.
International collective fund-raising is undertaken by organisations, including Al‑Aqsa Netherlands, to raise funds for Hamas, under the name Union of the Good (Ittilaf Al-Khair in Arabic). The leader of the Union of the Good, residing in Qatar, has in the past authorised suicide attacks on religious grounds. Until the banning (of Al‑Aqsa) in Germany, the chairman of Al‑Aqsa Germany was also the chairman of Al‑Aqsa in the Netherlands. Following the banning of the organisation in Germany, a member of the leadership of Al‑Aqsa Belgium who was also a member of the leadership in the Netherlands, became chairman of Al‑Aqsa in the Netherlands ...”
That official communication, supplemented by the following information provides the basis for [the Sanctieregeling].
1.12. At the request of the [applicant], a discussion was held on 17 April 2003 between the [applicant’s] lawyers and representatives of the Ministry of Foreign Affairs in order to obtain information. At that meeting the [applicant’s] leadership provided additional information on its activities. That information did not, however, cause [the Kingdom of the Netherlands] to withdraw or amend the measures taken against the [applicant]. Subsequent requests by the [applicant] to that effect were not considered by [the Kingdom of the Netherlands].
2. The claim, the grounds and the defence
The [applicant] claims, in essence:
...
To that effect, the [applicant] makes the following arguments.
The accusations made against the [applicant] are not substantiated by well-established facts. The official communication from the AIVD does not provide an adequate basis for those accusations. In addition, [the Kingdom of the Netherlands] previously indicated that there was no cause to take measures against the [applicant]. The [applicant] has no association with Hamas or with organisations associated with Hamas. The funds it has raised are used solely for social activities, and this is closely monitored by the authorities concerned. Before adopting [the Sanctieregeling], [the Kingdom of the Netherlands] did not place the [applicant] in a position in which it could effectively make known its views. The [applicant] acted openly with regard to [the Kingdom of the Netherlands] and allowed it to monitor all its activities. [The Kingdom of the Netherlands] was wrong in not following up the [applicant’s] offer. [The Kingdom of the Netherlands] therefore acted unlawfully with regard to the [applicant]. The way in which [the Kingdom of the Netherlands] acted irreparably damaged the [applicant’s] interests. The [applicant] can no longer meet its financial commitments (rent, gas, water, electricity, wages) and has had to bring to an end its current projects.
Even if the way in which [the Kingdom of the Netherlands] acted were held to be lawful, it was nevertheless unlawful because [the Kingdom of the Netherlands] did not take any measures to bring to an end the inhumane situation in which the [applicant] currently finds itself.
By giving a certain amount of publicity in the media to the accusations made against the [applicant], [the Kingdom of the Netherlands] has damaged the [applicant’s] reputation and honour. The [applicant] has therefore suffered damage which [the Kingdom of the Netherlands] is required to compensate.
...
3. Assessment of the dispute
3.1. In the light of the documents lodged and the discussion at the hearing, it should be noted that the [applicant] seeks in particular to prevent [the Kingdom of the Netherlands] from continuing to implement [the Sanctieregeling]. It is necessary to decide whether [the Kingdom of the Netherlands] acted unlawfully with regard to the [applicant] by adopting and applying [the Sanctieregeling].
...
3.4. According to the established case-law of the Hoge Raad [der Nederlanden (Netherlands Supreme Court)], a court may classify the adoption and implementation of generally binding provisions (laws in the substantive sense) as unlawful on the grounds of arbitrariness, since it was not reasonable for the body concerned to adopt the provision in question in the light of the interests which that body was, or should have been, aware of at the time the implementing decision was taken. The court must observe the necessary restraint in the process of such a review, according to the Hoge Raad.
3.5. The interest [of the Kingdom of the Netherlands], in the context of [the Sanctieregeling], lies in combating terrorist activities in general and cutting off financial support for such activities in particular. The [applicant’s] interest, on the contrary, is to be able to carry on its activities unhindered.
3.6. [The Sanctieregeling] is based on the abovementioned official communication of the AIVD. The content of that communication relates mainly to the fact that the funds raised in the Netherlands by the [applicant] benefit organisations associated with the Islamist (Palestinian) movement of Hamas and that several of those organisations (associated with Hamas) make funds available for the commission or facilitation of the terrorist activities of Hamas.
3.7. The [applicant] has strenuously maintained that it has not made money available to Hamas or to other organisations associated with that movement. The funds it raises (EUR 1 300 000 in 2002) are, according to the [applicant], paid to institutions based in Israel, in the Israeli occupied territories and in other countries (Canada and Australia, in particular), which pursue merely social purposes and organise only social activities. The funds raised are then used solely in accordance with the relevant laws in those countries/occupied territories and under the supervision of the authorities of those countries/territories.
3.8. The official communication of the AIVD contains only general assertions. Those assertions are not substantiated by any factual data. Consequently, neither the court hearing the application for interim measures nor the [applicant] are in a position to decide whether the findings made in that communication are substantiated by the data from the investigation; in other words, the veracity of that official communication cannot be determined. That is all the more problematic since the [applicant] has disputed the content of that communication, and has done so giving its reasons wherever possible.
3.9. Although it may be acknowledged that the official communication has a certain logic, the [court hearing the application for interim measures] considers that where a person is prevented to a significant extent from functioning in a practical sense, on the basis of an official communication, [the Kingdom of the Netherlands] cannot merely make reference to that communication, where it is not substantiated and where the [applicant] has disputed the content in a reasoned manner. The argument put forward [by the Kingdom of the Netherlands] that merely to refer to the official communication is sufficient in the context of review of the legislation by the court hearing the application for interim measures, given the confidential nature of the sources substantiating that communication, is also rejected.
3.10. In the alternative, [the Kingdom of the Netherlands] has proposed that the [court hearing the application for interim measures] alone should be permitted to consult the data in question. The [applicant] has not disputed the contention [by the Kingdom of the Netherlands] that it is in the latter’s interest to protect the confidentiality of the AIVD data on which the official communication is based. The [applicant] has indicated its agreement with the fact that the court hearing the application for interim measures alone should consult the confidential data in question.
3.11. Consultation of the relevant documents in confidence by the [court hearing the application for interim measures] would appear to conflict with one of the fundamental principles of procedural law, namely that all parties should be heard. The statement of reasons of the (definitive) order of the court hearing the application for interim measures will not refer to the data which the [court hearing the application for interim measures] obtained from the confidential consultation, so that that statement of reasons cannot be directly reviewed. It is none the less acceptable that, for reasons of public policy, an exception should be made to the abovementioned principle. That is so in the present case. It is thus also important that the parties have agreed that an exception should be made to that principle and that the present procedure has similarities with administrative law, under which it is not unusual for a court to consult a document in confidence (see Article 8.29 of the Code of Administrative Law).
3.12. Consequently, [the Kingdom of the Netherlands] will be required to allow the court hearing the application for interim measures, together with the registrar of that court, to consult in confidence the file on which the AIVD’s official communication was based. The court hearing the application for interim measures considers that that confidential consultation should take place soon ...
4. The decision
The court hearing the application for interim measures directs [the Kingdom of the Netherlands] to inform it within a week of [the day after the present order], of the way in which that court, together with its registrar, may consult in confidence documents in the file on which the AIVD’s official communication was based.
...’
124 The Netherlands Government complied with that interim order and, on 21 May 2003, the court hearing the application for interim measures consulted the AIVD’s file at the offices of the AIVD.
125 By its interim order, the court hearing the application for interim measures held, inter alia, as follows:
‘...
2. The facts, the claim, the statement of reasons and the defence
With regard to these points, reference is made to the [interim order of the court hearing the application for interim measures].
3. Assessment of the dispute
3.1. In the light of the findings set out in the [interim order of the court hearing the application for interim measures], an answer will be given, first, to whether [the Kingdom of the Netherlands] acted unlawfully towards the [applicant] by adopting and implementing [the Sanctieregeling] and whether it is therefore necessary to direct it to cease implementing [the Sanctieregeling].
3.2. On the basis of its investigations, the court hearing the application for interim measures concludes that the findings of the AIVD provide adequate grounds to support the (AIVD’s) finding that funds raised by the [applicant] in the Netherlands have been used for the benefit of organisations associated with the (Palestinian) Islamist movement Hamas, and may also support the finding that some of those organisations (associated with Hamas) are making funds available for the purposes of committing or facilitating the terrorist activities of Hamas.
3.3. No evidence proving that the AIVD improperly carried out the tasks entrusted to it under the law governing the intelligence and security services has been brought to the attention of the court hearing the application for interim measures.
3.4. The [applicant] has also claimed that, even assuming that [the Kingdom of the Netherlands] did not act unlawfully towards it by adopting and implementing [the Sanctieregeling], the unlawful nature of the actions of [the Kingdom of the Netherlands] lies in any event in the fact that it arranged for implementation of [the Sanctieregeling] without providing for an arrangement that would end the situation in which the [applicant] currently finds itself. That line of argument must be rejected. It is established that the [applicant] suffered, and continues to suffer, damage as a result of the conduct [of the Kingdom of the Netherlands]. However, only the conduct of the [applicant] itself has caused that damage and, it is possible, will cause further damage in the future. The damage already suffered and any future damage will be totally attributable to the [applicant].
3.5. The [applicant] has also stated that [the Kingdom of the Netherlands] (in the person of the Minister for Internal Affairs) had earlier, that is to say in October 2002, stated in reply to questions raised by Members of the Second Chamber, that it considered it useless to take measures against the [applicant]. [The Kingdom of the Netherlands] has however provided sufficient indication – which is also clear from the answers to the questions raised by the Second Chamber – that the AIVD’s investigation was at that particular time at a stage where the adoption of measures with regard to the [applicant] was not justified, but that, after the investigation had been taken further, adoption of such measures was no longer ruled out.
3.6. In the light of the above considerations, the answer to the question raised in point 3.1 must be answered in the negative. Therefore, it is necessary to reject the [applicant’s] claims seeking an order prohibiting [the Kingdom of the Netherlands] from freezing all the assets belonging to it, prohibiting it from preventing all financial transactions on its behalf and for its benefit, and prohibiting third parties from making resources available to it either directly or indirectly.
...
The decision
The court hearing the application for interim measures dismisses the claims.
...’
126 In the light of the interim order of the court hearing the application for interim measures it is not necessary to decide whether, as the Kingdom of the Netherlands contends, judicial review of the Council’s assessment of the ‘knowledge’ required by Article 1(3)(k) of Common Position 2001/931 should be limited to assessing whether there was a manifest error.
127 Indeed, without committing the slightest error of assessment it was possible for the Council to consider, in the light of the two orders in question, that the applicant had knowledge, within the meaning of that provision, that its activity raising funds and making them available would contribute to the criminal activities of a terrorist group, in this case, Hamas or, more precisely, at the relevant time, its armed wing Hamas-Izz al-Din al-Qassem.
128 Contrary to what the applicant claims on the basis of an excessively legalistic and literary reading of those two orders, the factual findings and assessments made by the court hearing the application for interim measures in the light of the AIVD memorandum and the documents on the file substantiating it show that the AIVD was clearly convinced that the applicant had knowledge that its funds were ultimately being used for terrorist purposes. The various examples of such findings and assessments relied upon by the Kingdom of the Netherlands with reference to point 1.11 of the interim order of the court hearing the application for interim measures show this implicitly but surely.
129 Moreover, it is not so much regarding this aspect of knowledge or intent as more fundamentally on the alleged relationship between the applicant and Hamas that the discussion took place before the court hearing the application for interim measures. As that court noted, the applicant ‘strenuously’ asserted at that stage of the proceedings that ‘it [was not making] money available to Hamas or to other organisations associated with that movement’ and even that it ‘[was not] associated in any way with Hamas or with organisations associated with Hamas’. Those assertions were clearly refuted by the court hearing the application for interim measures, after it had been able to consult the file on which the AIVD memorandum was based. In those circumstances, it was not necessary for that court to describe expressly, in point 3.2 of its order, the extent to which the applicant had ‘knowledge’ of the situation.
130 In any event, in ruling that the damage already suffered by the applicant as a result of the Sanctieregeling, and any future damage, were ‘totally attributable’ to the applicant, the court hearing the application for interim measures necessarily found that ‘knowledge’ existed that was essential for establishing the liability of the applicant in the context of weighing up interests, which it was required to do (see, in particular, point 3.5 of the interim order of the court hearing the application for interim measures).
131 Moreover, the line of argument set out by the applicant in its observations on the statement in intervention of the Kingdom of the Netherlands, on the basis of the alleged distinction that should be drawn, at least in respect of the period prior to 12 September 2003, between the humanitarian and terrorist wings of Hamas, is irrelevant in the light of the finding of the court hearing the application for interim measures that, first, the funds raised by the applicant in the Netherlands had benefited organisations associated with Hamas and, second, several of those organisations made funds available for the purposes of committing or facilitating the terrorist activities of Hamas.
132 In any case, that argument, that the applicant was entitled to consider at that time that donations made to the humanitarian wing of Hamas would not be used for terrorist purposes, is incompatible with the argument it put forward before the court hearing the application for interim measures, whereby it denied any association with Hamas or with organisations associated with Hamas.
133 Having regard to the foregoing, the third part of the first plea in law must be rejected as unfounded.
The fourth part of the first plea
– Arguments of the parties
134 The applicant claims that the subject-matter and purpose of Common Position 2001/931 and Regulation No 2580/2001 are to combat current and future funding of terrorism and not past funding of it. Thus, in its view, unless the existence of a current or future risk that an entity will fund terrorism can be established, those measures are not applicable to it.
135 Neither the statement of reasons nor the order of the court hearing the application for interim measures show that the applicant represented the slightest current or future threat from which it could have been concluded in 2007 that the applicant might be considered to be facilitating terrorist activities. After the time that has passed since 3 June 2003, the provisions of the order of the court hearing the application for interim measures cannot moreover be used as grounds for such a finding.
136 In particular, it is not apparent from the statement of reasons that the organisations to which the applicant gave funds before 3 June 2003, assuming that they did actually facilitate terrorist activities at that time, continue to do so today. It is even possible that those organisations no longer exist. The Council itself is not in a position to verify such matters, since the identities of the organisations concerned have not been disclosed and it has not had access to the AIVD file on which the order of the court hearing the application for interim measures was based.
137 Moreover, there is nothing to suggest that if the measure freezing its assets were lifted the applicant would support the same organisations again. In that regard, the applicant expressly states that if the Council provides it with a list of organisations that are regarded as funding terrorism it will refrain from providing them with any financial support.
138 In its reply, the applicant adds that, contrary to what the Council contends in its defence, the Court is fully able to review in this case the merits of the contested decision with regard to this plea. Referring to the assessment criteria to which reference is made in that regard by the Council, it points out that it did not and still does not have any history of terrorist violence, that the Council cannot reasonably put forward any serious hypothesis regarding its future intentions merely on the basis of the documents at its disposal, and that both the Sanctieregeling, repealed with effect from 2003, and the order of the court hearing the application for interim measures have lost much of their relevance.
139 In its observations on the statement in intervention of the Kingdom of the Netherlands, the applicant also claims that the Council’s assessment was manifestly erroneous. It states that the Council itself has no knowledge of the identity of the organisations which the applicant supported and that, moreover, the Council does not know which of those organisations subsequently supported terrorism. The Council is not even aware whether those organisations still exist. In the light of this fact, it is impossible for the Council to state, on the basis of the documents of which it is aware, that the applicant may still be regarded as facilitating terrorist acts. It therefore exercised its discretion in a manifestly erroneous way.
140 The Council, supported by the Kingdom of the Netherlands and by the Commission, disputes the applicant’s arguments.
– Findings of the Court
141 The arguments put forward by the applicant in connection with the fourth part of the first plea are in essence the same as those which the applicant put forward in connection with the third plea in the proceedings in PMOI I.
142 Ruling on that third plea, the Court held in particular in PMOI I that (a) nothing in the provisions in question of Regulation No 2580/2001 and of Common Position 2001/931 precludes the imposition of restrictive measures on persons or entities that have in the past committed acts of terrorism, despite the lack of evidence to show that they are at present committing or participating in such acts, if the circumstances warrant it (paragraph 107); (b) attainment of the objective of those acts, namely to combat the threats to international peace and security posed by acts of terrorism, which is of fundamental importance to the international community, would be at risk of being jeopardised if the measures to freeze funds provided for by those acts could be applied only to persons, groups or entities at present committing acts of terrorism or having done so in the very recent past (paragraph 109); (c) those measures, being intended essentially to prevent the perpetration of such acts or their repetition, are based more on the appraisal of a present or future threat than on the evaluation of past conduct (paragraph 110); and (d) the broad discretion enjoyed by the Council with regard to the matters to be taken into consideration for the purpose of adopting or of maintaining in force a measure freezing funds extends to the evaluation of the threat that may be represented by an organisation having in the past committed acts of terrorism, notwithstanding the suspension of its terrorist activities for a more or less long period, or even their apparent cessation (paragraph 112).
143 In Sison II (paragraph 66) the Court added that in those circumstances, and in the light of the case-law relating to the obligation to state the reasons on which subsequent fund-freezing decisions are based (see, to that effect, PMOI I, paragraph 82) the Council cannot be required to state with greater precision in what way freezing the applicant’s funds may in concrete terms contribute to the fight against terrorism or to produce evidence to show that the applicant might use its funds to commit or facilitate acts of terrorism in the future.
144 In this instance, it follows from that case-law that the fact that the Council referred exclusively to events before 3 June 2003, as established by the court hearing the application for interim measures, is therefore not enough on its own to indicate an infringement of Article 1(1), (2) and (4) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001 (see, to that effect, PMOI I, paragraph 113).
145 The same applies as regards the applicant’s ‘express statement’ that if the measure freezing its assets were lifted it would refrain from providing any financial support to organisations that the Council had indicated to it were funding terrorism.
146 As to whether, in the light of all the other relevant circumstances (in particular the time that has elapsed since the original fund-freezing decision, what has happened meanwhile to the organisations to which the applicant had given funds, the applicant’s background as regards terrorism, its future intentions, the repeal of the Sanctieregeling and the current relevance of the order of the court hearing the application for interim measures), the Council overstepped the bounds of its discretion, that question is more a matter for judicial review of the Council’s compliance with its obligations under Article 1(6) of Common Position 2001/931. Since infringement of those obligations is specifically alleged in the context of the third plea, such infringement will, in so far as may be appropriate, be considered when that plea is examined (see, to that effect and by analogy, PMOI I, paragraph 114).
147 With that reservation, the fourth part of the first plea must therefore be rejected as unfounded and, likewise, also with the reservation contained in paragraph 106 above, the first plea must be rejected in its entirety.
Third plea: infringement of Article 1(6) of Common Position 2001/931, Article 2(3) of Regulation No 2580/2001 and of an essential procedural requirement
Arguments of the parties
148 According to the applicant, which refers to Article 1(6) of Common Position 2001/931, Article 2(3) of Regulation No 2580/2001 and the principles stated by the Court in OMPI, the Council did not review whether it was appropriate to continue to include it in the list at issue. The Council thus infringed an essential procedural requirement.
149 In that regard, the applicant points out that the statement of reasons by no means indicates that the Council did indeed review whether the reasons that had justified the original freezing of funds still applied, and even less the way in which it did so. There is every reason to believe, moreover, that the Council based the contested decision solely on the order of the court hearing the application for interim measures and on the Sanctieregeling. Those acts do not constitute a conclusive, independent basis for a subsequent decision to continue to freeze funds. According to the applicant, citing the same two national decisions at the time of each subsequent fund-freezing decision does not constitute serious and current review of its situation, as required by the Court in OMPI.
150 The applicant also points out that it no longer has any means of obtaining a review by a Netherlands court of the factual accuracy or inaccuracy of the accusations made by the AIVD in 2003, and still less of the current status of the organisations to which it sent funds.
151 At the hearing, the applicant, referring in particular to paragraph 116 of Sison II, again claimed that the Sanctieregeling and the order of the court hearing the application for interim measures have not so far given rise in the Netherlands to the instigation of any investigations or prosecutions against it, even though the Sanctieregeling was repealed immediately after the adoption of the first Community measure freezing its funds. It infers from this, first, that no action was taken under the national decision on the basis of which the Council originally decided to freeze the applicant’s funds and, second, that the Council is not taking this fact adequately into account by continuing that measure indefinitely.
152 The Council rejects the applicant’s assertions and states that it carried out a detailed, substantive review before deciding to continue to include it in the list at issue, in order to ensure that continued inclusion remained justified.
153 Pointing out that the question whether restrictive measures taken against a terrorist organisation should be maintained is a policy matter which it is for the legislature alone to decide, the Council considers that it essentially took all the relevant considerations into account.
154 As regards procedure also, the Council carefully ensured that the obligations stated in OMPI and in Sison I (paragraphs 141 and 184), concerning the rights of the defence and the right to be heard, were complied with. It therefore carried out the review in full knowledge of the applicant’s observations.
155 In that regard, the Council states, referring to the fifth recital in the preamble to the contested decision and to its letter of 29 June 2007, by which the contested decision was notified to the applicant, that it carefully considered the observations submitted by the latter on 25 May 2007 before deciding to continue to include it in the list at issue.
156 That being so, the Council considers that, although it is required, according to OMPI and Sison I, to enable third parties to submit their comments and to take those comments into account, it is not required to respond in turn to those observations. The fact that the statement of reasons was not amended in relation to the one notified on 23 April 2007 merely shows that none of the arguments put forward by the applicant in its observations convinced the Council and that it had nothing new to add.
157 In their observations in response to the written questions from the Court, the Council, the Kingdom of the Netherlands and the Commission maintained moreover that, according to the principles stated by the Court in Sison II, the Council was entitled to take into account the fact that the decision of the competent national authority on which it had based its own decision imposing restrictive measures on the applicant had not been challenged by the applicant.
158 At the hearing the Kingdom of the Netherlands stated that the repeal of the Sanctieregeling, following the adoption of the initial Community measure freezing the applicant’s funds, did not indicate a change in the national authorities’ position in relation to the applicant but resulted from concern on the part of the Netherlands Government to avoid an overlap between a national measure and a Community measure freezing the applicant’s funds.
Findings of the Court
159 As stated in paragraphs 106 and 146 above, it is also in the context of this plea that it is appropriate to consider, first, whether the order of the court hearing the application for interim measures might still provide a valid basis for the contested decision at the date on which that decision was adopted, in the light of the relevant circumstances of this case and in particular the action which had been taken under national law with regard to the Sanctieregeling and, second, whether, in taking that order exclusively as its basis, the Council overstepped the bounds of its discretion. It is in that context also that questions arise as to whether the applicant had and still has any remedies under national law against the order of the court hearing the application for interim measures, and also what consequences attach to the fact that the applicant refrained from pursuing those legal remedies.
160 Before considering those questions, it is appropriate to recall the principles underlying the case-law of the Court relating to litigation in respect of fund-freezing measures adopted in order to combat terrorism, in particular OMPI, PMOI I and PMOI II and Sison I and Sison II (see, in that regard, paragraphs 78 to 83 above).
161 Those principles establish, first, the broad discretion that must be granted to the Council with regard to the matters to be taken into consideration for the purposes of adopting or maintaining in force a measure freezing funds under Regulation No 2580/2001. That discretion concerns, in particular, assessment of the considerations of appropriateness on which such decisions are based (see paragraphs 82 and 83 above and the case-law cited) and also covers the evaluation of the threat that may be represented by an organisation having in the past committed acts of terrorism, notwithstanding the suspension of its terrorist activities for a more or less long period, or even their apparent cessation (see paragraph 142 above and the case-law cited).
162 Those principles establish, second, the precedence that should be afforded, in the exercise of that discretion, to matters of national procedure in the context of which the decision of the competent authority referred to in Article 1(4) of Common Position 2001/931 is adopted which provides the basis for the Community fund-freezing decision.
163 The Court has thus held on a number of occasions that, in a case in which Article 1(4) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001, which are provisions which introduce a specific form of cooperation between the Council and the Member States in the context of combating terrorism, apply, the principle of cooperation in good faith entailed the obligation for the Council to defer as far as possible to the assessment conducted by the competent national authority, at least where the latter is a judicial authority, in particular in respect of the existence of ‘serious and credible evidence’ on which its decision is based (see paragraph 80 above and the case-law cited).
164 The Court has none the less also held that the Council, when contemplating adopting, or maintaining in force after review, a fund-freezing measure pursuant to Regulation No 2580/2001, on the basis of a national decision for the ‘instigation of investigations or prosecution’ for an act of terrorism, may not disregard subsequent developments arising out of those investigations or that prosecution (see Sison II, paragraph 116 and the case-law cited).
165 It is clear from PMOI I (paragraph 146) that since the decision of the competent national authority on which the Community decision to freeze funds is based may at any time be the subject of challenge before the courts under domestic law, made either directly against that decision or indirectly against any subsequent decision of the same national authority refusing to withdraw or repeal it, it is reasonable for the Council to treat the fact that the order is still in force as decisive for the purposes of its own assessment. The Court therefore held in that same judgment (paragraph 147) that, with regard to the weighing-up of the incriminating and exculpatory evidence, the Council acts reasonably and prudently when, in a situation in which the decision of the competent national authority on which the Community decision to freeze funds is based may be or is the subject of challenge before the courts under domestic law, that institution refuses in principle to express an opinion on the validity of the arguments on substance raised by the party concerned in support of such an action, before it knows the outcome of the proceedings. If that were not so, the assessment made by the Council, as a political or administrative institution, would run the risk of conflicting, on issues of fact or law, with the assessment made by the competent national court or tribunal.
166 Likewise, in the judgment of 2 September 2009 in Joined Cases T‑37/07 and T‑323/07 El Morabit v Council, not published in the ECR, paragraphs 51 and 52, the Court held that the Council acted in accordance with Article 1(4) of Common Position 2001/931 and with Regulation No 2580/2001 in basing its fund-freezing decision on a criminal conviction delivered by a national court of first instance without waiting for the outcome of an appeal brought by the person concerned against that conviction.
167 In El Morabit v Council (paragraph 53), the Court none the less added, in accordance with the abovementioned case-law, that although merely bringing an appeal against a conviction at first instance does not affect the Council’s right, on the basis of Regulation No 2580/2001 and of Article 1(4) of Common Position 2001/931, to include a convicted person or entity in the list at issue, the Council is required to verify, once the appeal procedure has concluded, that grounds exist to justify maintaining the freezing of the funds of the person concerned. In that case, the Court held (paragraph 54) that the Council had drawn a direct conclusion from the acquittal of the person concerned at appeal level, in deleting him from the list at issue. According to the Court, the Council had thus adopted a rational interpretation of its powers by following the progress of the decision of the Netherlands judiciary.
168 In Sison II (paragraph 116) the Court also envisaged a situation in which police or security enquiries are closed without giving rise to any judicial consequences, because it proved impossible to gather sufficient evidence, or measures of investigation ordered by the investigating judge do not lead to proceedings going to judgment for the same reasons. Similarly, a decision to prosecute may end in the abandoning of the prosecution or in acquittal in the criminal proceedings. The Court held that it would be unacceptable for the Council not to take account of such matters, which form part of the body of information having to be taken into account in order to assess the situation (see paragraph 83 above). To decide otherwise would be tantamount to giving the Council and the Member States excessive power to freeze a person’s funds indefinitely, beyond review by any court and whatever the result of any judicial proceedings taken.
169 The same considerations must apply where a national administrative measure freezing funds or proscribing an organisation as terrorist is withdrawn by the body that has issued it or been annulled by a judicial ruling, as was the case in PMOI I.
170 In the present case, it is common ground that the Sanctieregeling was repealed on 3 August 2003, which was almost immediately after the entry into force, on 28 June 2003, of the initial Community measure freezing the applicant’s funds.
171 It is true in that regard that the contested decision claims to be based not on the Sanctieregeling itself, but merely on the order of the court hearing the application for interim measures (see paragraph 86 above). However, for all the reasons set out in paragraph 87 above, it is not possible in this case to take into consideration the order of the court hearing the application for interim measures in isolation and without having regard at the same time to the Sanctieregeling.
172 It is appropriate to recognise therefore that since the repeal of the Sanctieregeling within the Netherlands legal order, the order of the court hearing the application for interim measures, which, as was pointed out above, forms an inseparable whole with the Sanctieregeling, can no longer provide a valid basis for a Community measure freezing the applicant’s funds.
173 By that order, the court hearing the application for interim measures simply refused to suspend the effects of the Sanctieregeling by way of an interim ruling. The Sanctieregeling definitively ceased to have any legal effects as a result of its repeal. The same must necessarily apply, in consequence, to the legal effects attaching to the order of the court hearing the application for interim measures, all the more so since that order contained only an interim ruling, without prejudice to a subsequent substantive ruling at the end of the proceedings.
174 In that regard, the Court also considers that the order of the court hearing the application for interim measures cannot, merely for the purposes of implementing Regulation No 2580/2001, have legal effects separable from those of the Sanctieregeling, effects that in the present case will continue to exist in Netherlands law despite the repeal of the Sanctieregeling. It is not moreover compatible with the general scheme of that regulation, a feature of which is the precedence that matters of national procedure must have in the Council’s assessment, for the Sanctieregeling, which no longer has any effects within the Netherlands legal order, to continue to have effect indirectly and indefinitely within the Community legal order, by means of the order of the court hearing the application for interim measures.
175 The same applies all the more since the order of the court hearing the application for interim measures, delivered in proceedings brought by the applicant, is contingent upon the Sanctieregeling. It is apparent from the statement of reasons of the Sanctieregeling that it had been adopted ‘pending the adoption of a Community decision’ and that it was to be repealed ‘as soon as such a decision enters into force’ (see also Al‑Aqsa, paragraph 17). According to the explanations given by the Kingdom of the Netherlands at the hearing, the Sanctieregeling was repealed solely as a result of concern on the part of the Netherlands Government to avoid an overlap between a national measure and a Community measure freezing the applicant’s funds. It follows that the Sanctieregeling would have been repealed in any event immediately after the adoption of the initial Community measure freezing the applicant’s funds, whether or not the applicant had instituted interlocutory proceedings or substantive proceedings.
176 Such a mechanism in turn fails to take into account the general scheme of Regulation No 2580/2001, which makes the adoption of a Community fund-freezing measure conditional upon either the commencement and active continuation of national proceedings seeking, directly and chiefly, the imposition on the person concerned of measures of a preventive or punitive nature, in connection with the combating of terrorism and by reason of that person’s involvement in terrorism (see Sison II, paragraph 111), or the delivery and implementation of a decision convicting the person concerned for such deeds.
177 In the case under consideration, the fund-freezing decision, taken initially at national level, is justified ‘pending the adoption of a Community decision’, and the Community measure is justified in turn by the adoption of the national decision, which is immediately repealed. Such a mechanism is inevitably tainted by circular logic.
178 Far from being able to continue to take the order of the court hearing the application for interim measures as its basis, the Council should have drawn the logical conclusion from the repeal of the national fund-freezing measure and found that there was no longer any ‘substratum’ in national law that justified to the required legal standard keeping the equivalent Community measure, and doing so whatever judicial proceedings were brought against the repealed national measure.
179 In those circumstances, the fact that the court hearing the application for interim measures dismissed the action brought by the applicant against the Sanctieregeling, combined with the fact that the person concerned did not appeal against the order of the court hearing the application for interim measures or bring substantive proceedings, appears irrelevant for the purposes of assessing the lawfulness of the contested decision.
180 In the circumstances of this case, the main feature of which is the repeal of the Sanctieregeling, it is necessary on the contrary to acknowledge that the Council overstepped the bounds of its discretion by continuing to include the applicant indefinitely in the list at issue, when periodically reviewing the latter’s situation pursuant to Article 1(6) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001, solely on the ground that the decision of the court hearing the application for interim measures has not been challenged, in the Netherlands legal order, by the judicial body hearing an appeal in interlocutory proceedings or by the judicial body competent to adjudicate on the substance, whilst the administrative decision whose effects that court had been asked to suspend has in the meantime been repealed by the body which issued it.
181 This is all the more so because, as the applicant submitted at the hearing and was not challenged by the other parties, since the repeal of the Sanctieregeling, apart from giving effect to the contested decision under national law, the competent Netherlands administrative and judicial authorities have not taken any action to impose on the person concerned measures of a preventive or punitive nature in connection with the combating of terrorism and by reason of that person’s involvement in terrorism.
182 It follows that the third plea is well founded.
183 Accordingly, the contested decision must be annulled, without there being any need to examine the applicant’s other pleas and arguments.
184 In those circumstances, there is no need to rule on the claim that Regulation No 2580/2001 should be declared unlawful, pursuant to Article 241 EC (see, to that effect, Al‑Aqsa, paragraphs 66 and 67; see also Case C‑91/05 Commission v Council [2008] ECR I‑3651, paragraph 111).
Costs
185 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Under Article 87(3) of the Rules of Procedure, where each party succeeds on some and fails on other heads, or where the circumstances are exceptional, the Court may order that the costs be shared or that each party bear its own costs. In the circumstances of this case, where the Council has failed on the heads of claim seeking annulment, which were the main subject-matter of the case, it must be ordered to bear all the costs incurred by the applicant, in addition to its own costs, as applied for in that party’s pleadings.
186 Under the first subparagraph of Article 87(4) of those rules, Member States and institutions intervening in the proceedings are to bear their own costs.
On those grounds,
THE GENERAL COURT (Seventh Chamber)
hereby:
1. Annuls Council Decision 2007/445/EC of 28 June 2007 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Decisions 2006/379/EC and 2006/1008/EC; Council Decision 2007/868/EC of 20 December 2007 implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2007/445; Council Decision 2008/583/EC of 15 July 2008 implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2007/868; Council Decision 2009/62/EC of 26 January 2009 implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2008/583; and Council Regulation (EC) No 501/2009 of 15 June 2009 implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2009/62, in so far as those acts concern Stitching Al‑Aqsa;
2. Dismisses the application as to the remainder;
3. Orders the Council of the European Union to bear, in addition to its own costs, the costs of Stichting Al‑Aqsa;
4. Orders the Kingdom of the Netherlands and the European Commission to bear their own costs.
Forwood | Papasavvas | Moavero Milanesi |
Delivered in open court in Luxembourg on 9 September 2010.
[Signatures]