JUDGMENT OF THE GENERAL COURT (Second Chamber)
21 March 2014 (*)
(Common foreign and security policy – Restrictive measures directed against certain persons and entities associated with Usama bin Laden – Regulation (EC) No 881/2002 – Freezing of a person’s funds and economic resources as a result of his inclusion on a list drawn up by a United Nations body – Sanctions Committee – Subsequent inclusion in Annex I to Regulation No 881/2002 – Commission’s refusal to de-list – Action for failure to act – Fundamental rights – Right to be heard, right to effective judicial review and right to property)
In Case T‑306/10,
Hani El Sayyed Elsebai Yusef, residing in London (United Kingdom), represented initially by E. Grieves, Barrister, and H. Miller, Solicitor, and subsequently by E. Grieves, H. Miller and P. Moser QC, and R. Graham, Solicitor,
applicant,
v
European Commission, represented by E. Paasivirta, M. Konstantinidis and T. Scharf, acting as Agents,
defendant,
supported by
Council of the European Union, represented initially by E. Finnegan and R. Szostak, and subsequently by E. Finnegan, acting as Agents,
intervener,
APPLICATION seeking a declaration, in accordance with Article 265 TFEU, that the Commission unlawfully failed to revoke Commission Regulation (EC) No 1629/2005 of 5 October 2005 amending for the 54th time Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (EC) No 467/2001 (OJ 2005 L 260, p. 9), in so far as that act concerns the applicant,
THE GENERAL COURT (Second Chamber),
composed of N.J. Forwood (Rapporteur), President, F. Dehousse and J. Schwarcz, Judges,
Registrar: J. Weychert, Administrator,
having regard to the written procedure and further to the hearing on 9 October 2012,
gives the following
Judgment
Background to the case
1 On 29 September 2005, the committee established by Resolution 1267 (1999) of the Security Council of the United Nations (respectively ‘the Sanctions Committee’ and ‘the Security Council’) added the name of the applicant, Mr Hani El Sayyed Elsebai Yusef, who was identified as being a person associated with the Al-Qaida organisation, to its consolidated list of entities and individuals to be subject to the freezing of funds and other economic resources under various Security Council resolutions (in particular Resolutions 1333 (2000), 1390 (2002), 1455 (2003), 1562 (2004), 1617 (2005), 1730 (2006), 1735 (2006), 1822 (2008), 1904 (2009) and 1989 (2011)) seeking to combat threats to international peace and security caused by terrorist acts (‘the Sanctions Committee list’).
2 By Commission Regulation (EC) No 1629/2005 of 5 October 2005 amending for the 54th time Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (EC) No 467/2001 (OJ 2005 L 260, p. 9), the applicant’s name was added to the list in Annex I of Council Regulation (EC) No 881/2002 of 27 May 2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (EC) No 467/2001 prohibiting the export of certain goods and services to Afghanistan, strengthening the flight ban and extending the freeze of funds and other financial resources in respect of the Taliban of Afghanistan (OJ 2002 L 139, p. 9) (‘the list at issue’). His assets and other financial resources were therefore frozen in the European Community, in accordance with the substantive provisions of Regulation No 881/2002.
3 By application lodged at the General Court on 6 January 2006 and directed against the Council of the European Union, the applicant brought an action for annulment of Regulation No 881/2002, as amended by Regulation No 1629/2005, in so far as those acts concerned him. By order of the General Court of 31 May 2006 in Case T‑2/06 Yusef v Council, not published in the ECR, that action was dismissed as manifestly inadmissible as it had been brought out of time.
4 On 3 September 2008, the Court of Justice delivered its judgment in 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 (‘Kadi I, Court of Justice’).
5 By letters of 7 March 2009 to the Council of the European Union and to the Commission of the European Communities, the applicant sought access to the documents relied on by those institutions in order to justify the inclusion of his name in the list at issue.
6 By letter of 23 April 2009, the Commission sent the applicant three documents, that is to say: i) press release SC/8516 of the Sanctions Committee of 3 October 2005, concerning the addition of the applicant’s name, along with others, to its list; ii) press release SC/8520 of the Sanctions Committee of 10 October 2005, concerning the amendment of the applicant’s personal data linked to his name in the list of that Committee; iii) press release SC/8815 of the Sanctions Committee of 24 August 2006, concerning a further amendment of those personal data.
7 The applicant brought an action before the High Court of Justice (England & Wales), Queen’s Bench Division (Administrative Court) (‘the High Court’) contesting the national measure freezing his funds, adopted in relation to him by the Foreign and Commonwealth Office of the United Kingdom of Great Britain and Northern Ireland (‘the FCO’) at the same time as the adoption of Regulation No 1629/2005. In the context of that action, the FCO made numerous approaches to the Sanctions Committee with a view to enabling the applicant to learn the reasons for his inclusion in the Sanctions Committee list, as well as the identity of the State which had requested his inclusion. None of those approaches was successful but, in a statement made as a witness on 19 June 2009 before the High Court, the Head of the FCO Sanctions Team, on behalf of that ministry, said the following:
‘The FCO has gathered the material held by the Government in order to complete a review of the [applicant’s] designation against the criteria set out in the relevant resolutions [of the Security Council] and in accordance with the review procedure as set out in [the applicable rules]. Following the completion of that review procedure, the FCO has concluded that the … [inclusion of the applicant’s name on the Sanctions Committee list] under the … regime [put in place by Security Council Resolution 1267 (1999)] is no longer appropriate. Further information was requested, but has not yet been provided by the … State [which designated the applicant]. The United Kingdom will therefore contact the [Sanctions] Committee to state that the [applicant’s] listing is no longer appropriate and the UK will also submit and pursue a de-listing request in respect of the [applicant]’.
8 By judgment of 27 January 2010, Her Majesty’s Treasury (Respondent) v Mohammed Jabar Ahmed and Others (Appellants), Her Majesty’s Treasury (Respondent) v Mohammed al-Ghabra (Appellant) and R (on the application of Hani el Sayed Sabaei Youssef) (Respondent) v Her Majesty’s Treasury (Appellant) [2010] UKSC 2 & [2010] UKSC 5, the United Kingdom Supreme Court annulled the national measure freezing the applicant’s funds on the ground that it had been adopted ultra vires.
9 By letter of 18 March 2010, referring to Kadi I, Court of Justice, and to the abovementioned judgment of the United Kingdom Supreme Court, the applicant called upon the Commission to remove his name from the list at issue, inter alia on the grounds that:
– after being placed on the Sanctions Committee list, his name had been added to the list at issue automatically, without independent or impartial assessment by the Commission;
– he had not been given any reasons for that inclusion, in breach of his fundamental rights and contrary to the principles referred to in Kadi I, Court of Justice;
– after reviewing the evidence on the strength of which his name was added to the Sanctions Committee list, the United Kingdom had concluded that the criteria for inclusion were not satisfied.
10 The applicant also called upon the Commission to urgently provide further information concerning the substantive basis for the inclusion of his name in the list at issue.
Procedure and fresh developments in the course of the proceedings
11 As the Commission did not reply to the applicant’s letter of 18 March 2010 within the period of two months laid down in Article 265 TFEU, the applicant brought the present action by application lodged at the Registry of the General Court on 23 July 2010.
12 By document lodged at the Registry of the General Court on the same date, the applicant applied for legal aid under Article 94 of the Rules of Procedure of the General Court. That application was granted by order of the President of the Second Chamber of the General Court of 22 October 2010.
13 On 29 July 2010, the Sanctions Committee reviewed the inclusion of the applicant’s name on its list in accordance with the review procedure provided for under paragraph 25 of Security Council Resolution 1822 (2008). The purpose of that review is to ensure that that list is as updated and accurate as possible and to confirm that the listing of the person concerned remains appropriate. Following that review, the applicant’s name was kept on the Sanctions Committee list.
14 On 31 August 2010, the Commission received from the Sanctions Committee, in reply to its request of 26 January 2010, the statement of reasons for the designation of a number of persons, including the applicant, on the Sanctions Committee list.
15 The Commission communicated that statement of reasons to the applicant by letter of 10 September 2010, indicating that his name had been placed on the list at issue on the basis of that statement of reasons (‘the statement of reasons’) and inviting him to submit his observations before 10 December 2010.
16 The statement of reasons states:
‘[The applicant] was a member of Egyptian Islamic Jihad … [The applicant] and a number of others from Egyptian Islamic Jihad joined Al-Qaida … in the early 1990s.
The Egyptian Islamic Jihad, headed by Usama bin Laden’s deputy, Aiman al‑Zawahiri …, was responsible for the bombing of the Egyptian Embassy in Islamabad in 1995. As of 1998, the group received most of its funding from Al‑Qaida and in 2001 it merged with Al-Qaida.
[The applicant] has provided material support to Al-Qaida and has conspired to commit terrorist acts. He has travelled internationally using forged documents, he has received military training and has belonged to cells and groups carrying out terrorist operations using force and violence involving intimidation, threats and damage to public and private property, as well as obstructing the activities of the public authorities. [The applicant] instructed others to go to Afghanistan to take part in the fighting there. He has used an Internet site to support terrorist acts undertaken by Al-Qaida as well as to maintain contact with a number of supporters around the world.
[The applicant] is wanted by the Egyptian authorities for involvement in terrorist crimes committed inside and outside Egypt, including criminal collusion with intent to commit acts of premeditated killing, destruction of property, unlicensed possession of firearms, ammunition and explosives, membership of a terrorist group, forgery of official and other documents, and theft.’
17 By separate document lodged at the Registry on 8 October 2010, the Commission raised an objection of inadmissibility of the present action under Article 114 of the Rules of Procedure.
18 On 30 September 2010, the Court delivered its judgment in Case T‑85/09 Kadi v Commission [2010] ECR II‑5177 (‘Kadi II, General Court’).
19 By order of the President of the Second Chamber of the Court of 19 November 2010, the Council was given leave to intervene in support of the form of order sought by the Commission.
20 On 30 November 2010, the Sanctions Committee refused to grant the request, submitted by the United Kingdom, for removal of the applicant’s name from its list. According to a letter of 2 December 2011 from the Chairman of the Sanctions Committee to the Commission, ‘at least one member of the [Sanctions] Committee concluded that it did not agree that [the applicant] no longer met the criteria [of that Committee] for listing’.
21 By letter of 9 December 2010, the applicant submitted his observations to the Commission in response to the statement of reasons.
22 Pursuant to Article 7c(3) of Regulation No 881/2002, as amended by Council Regulation (EU) No 1286/2009 of 22 December 2009 (OJ 2009 L 346, p. 42), the Commission then initiated the review of its decision to place the applicant’s name on the list at issue, in the light of those observations and in accordance with the procedure referred to in Article 7b(2) of Regulation 881/2002. The Commission also sent those observations to the Sanctions Committee.
23 By order of the Court (Second Chamber) of 14 March 2011, the decision on the objection of inadmissibility was reserved for the final judgment.
24 By measure of organisation of procedure of 17 November 2011, the Court (Second Chamber) asked the parties to inform it of the state of the review procedure initiated in this case under Regulation No 881/2002 as amended by Regulation No 1286/2009 (‘the review procedure’) and, on the assumption that no decision on the review had yet been taken, called on the Commission to give the reasons for this and to let the Court know the approximate date on which the Commission intended to adopt such a decision.
25 By letter lodged at the Registry on 8 December 2011, the applicant informed the Court that he was not in a position to respond to the Court’s request, since he had not received any information or correspondence from the Commission since its letter of 9 December 2010.
26 By letter lodged at the Registry on 6 December 2011, the Commission informed the Court that it had invited the Sanctions Committee to respond to the applicant’s observations of 9 December 2010 before the Commission concluded its review. It stated that, having actively pursued the Sanctions Committee in that regard, it had finally received a communication from that committee, on 2 December 2011, indicating that the committee ‘[was] actively investigating’ the case. The Commission submitted that it would be prudent to await the outcome of the Sanctions Committee’s investigation. It did, however, state that it was ready to act ‘with all appropriate speed’ and expressed the hope that it would be in a position to conclude the review procedure ‘during the first quarter of 2012’.
27 By letter lodged at the Registry on 6 December 2011, the Council confirmed the information given by the Commission.
28 By letter lodged at the Registry on 20 December 2011, the Commission informed the Court that it had received from the Chairman of the Sanctions Committee a further written communication, of 15 December 2011, concerning the applicant’s case, which it appended to its letter, and repeated that it hoped to be in a position to conclude its review during the first quarter of 2012. That communication states, inter alia:
‘Concerning the allegation that the evidence in this case was obtained under torture, the State of residence [of the applicant] has provided its view to the [Sanctions Committee] in the enclosed letter dated 7 December 2011. One other member of the [Sanctions Committee] stated that [the applicant] is known for managing the “AI-Maqreze Center for Historical Studies” based in the United Kingdom. Through the website of the center (www.almaqreze.net) radical material is available.’
29 Appended to that communication was the letter of 7 December 2011 to the Chairman of the Sanctions Committee from the United Kingdom Mission to the United Nations (UN), which states, in particular:
‘[The applicant] is currently judicially reviewing the United Kingdom’s decision to support his designation under UNSCR 1989 (2011) in the United Kingdom courts. In this judicial review, [the applicant] alleges that the evidence against him “was either obtained by torturing [his] colleagues, or manufactured by the Egyptian authorities”. Therefore [the applicant] is not suggesting that he knows that any evidence against him was obtained by torture but rather that he believes the evidence is unreliable for one of two possible reasons.
The United Kingdom would like to make clear that it has no reason to believe that the information that it took into account when deciding to release its hold on [the applicant’s] designation was obtained by torture or manufactured by the Egyptian authorities as alleged by [the applicant].
[The applicant] has had open to him the possibility of applying directly to the [Sanctions Committee] to be de-listed. Since 3 June 2010, he has had the right to submit a request for delisting to the Office of the Ombudsperson.
The UK is currently reviewing [the applicant’s] listing and will revert to the [Sanctions Committee] as soon as this process is complete.’
30 By letter of 11 January 2012, the Commission informed the applicant that the review of his case was ongoing and notified him of the additional inculpatory evidence contained in the abovementioned letter, dated 15 December 2011, from the Chairman of the Sanctions Committee, and invited him to submit his observations in that regard before 1 February 2012.
31 By letter of 1 February 2012, the applicant submitted his observations to the Commission.
32 By letter lodged at the Registry on 1 May 2012, the applicant provided the Court with copies of the letters referred to in paragraphs 30 and 31 above.
33 Upon hearing the report of the Judge-Rapporteur, the General Court (Second Chamber) decided to open the oral procedure.
34 By letter lodged at the Registry on 14 September 2012, the applicant requested a measure of organisation of procedure seeking that certain questions be posed to the Commission. To that letter were annexed a letter from the applicant to the Commission of 13 September 2012 and a certain number of declassified documents recently obtained from the United Kingdom Security Services.
35 By letter lodged at the Court Registry on 24 September 2012, the Commission informed the General Court that it had received another letter from the Chairman of the Sanctions Committee dated 21 March 2012, which it annexed to its letter, concerning the applicant’s case, and stated that on the basis of unofficial information received from its delegation in New York (United States), the review process by the Sanctions Committee relating to the applicant’s case could lead to a decision on 23 December 2012. That communication states, inter alia:
‘Further to my previous letters, dated 2 and 15 December 2011, I should like to inform you that the designating State informed the [Sanctions] Committee that it does not agree to the disclosure of its identity as a designating State. Furthermore, the authorities of that State confirm that “according to their recent revision of the case of [the applicant], they reached the conclusion that there remain to be linkages and connections between [the applicant] and Al-Qaida, considering that he is a member of the Al-jihad group that has links with Al-Qaida”.’
36 The parties presented oral argument and replied to questions from the Court at the hearing on 9 October 2012, at the end of which judgment was reserved.
37 On 18 July 2013, the Court delivered its judgment in Joined Cases C-584/10 P, C‑593/10 P and C‑595/10 P Commission and Others v Kadi [2013] ECR (‘Kadi II, Court of Justice’).
Form of order sought by the parties
38 The applicant claims that the Court should:
– declare that the Commission’s failure to remove his name from the list at issue is unlawful;
– order the Commission to remove his name from that list;
– order the Commission to pay the costs, including the sums advanced by way of legal aid by the cashier of the Court.
39 The Commission, supported by the Council, contends that the Court should:
– dismiss the action as inadmissible and/or as unfounded;
– order the applicant to pay the costs.
40 At the hearing, the applicant withdrew his claim that the Commission should be ordered to remove his name from the list at issue, and his request for a measure of organisation of procedure, formal note of which was taken in the minutes of the hearing.
Law
Admissibility
Arguments of the parties
41 The Commission and the Council submit, first, that the present action for failure to act is, in essence, an action for the annulment of Regulation No 1629/2005, which is manifestly out of time and, therefore, inadmissible.
42 It is further submitted that, since the applicant did not bring an action for annulment of Regulation No 1629/2005 when it was adopted in 2005, he does not have the right to bring an action for failure to act, invoking the non-revocation of that regulation. In doing so, the applicant is attempting to circumvent the expiry of the mandatory period for bringing an action for annulment, laid down in Article 230 EC (now Article 263 TFEU), which is prohibited by settled and consistent case-law. According to the Council, it would not be in the interests of the administration of justice to allow the persons concerned a de facto indefinite period during which to institute proceedings leading to the revocation, retroactive or otherwise, of a measure freezing funds.
43 The Commission and the Council argue, second, that the present action is, in any event, inadmissible since it is not established that, at the time when the Commission was called upon to act – for the purposes of the second paragraph of Article 265 TFEU – on 18 March 2010, it had a duty under European Union law to revoke Regulation No 1629/2005, in so far as it concerns the applicant.
44 It is argued that Regulation No 881/2002, as amended by Regulation No 1286/2009, does not provide for an obligation to take a measure at the request of the person concerned. The only duty that the Commission has, under Article 7c(2) of Regulation No 881/2002, as amended by Regulation 1286/2009, is to communicate to the person concerned the reasons for the entry of his name on the list at issue ‘[a]s soon as the requested statement of reasons is provided by the Sanctions Committee’ and then, as provided for under Article 7c(3) of Regulation No 881/2002, to review its decision ‘[w]here observations are submitted’ by the person concerned. According to the Commission, it is not under any duty to commence the review procedure until it has received the statement of reasons from the Sanctions Committee and the steps referred to in Article 7c(2) of Regulation No 881/2002 have been completed.
45 In the present case, however, as the Commission had not been provided with any statement of reasons by the Sanctions Committee as at the date when the action was commenced, it is argued that it cannot be said that the Commission had failed to take action required of it.
46 It is further argued that subsequently, the applicant duly benefited from the procedural safeguards provided under Regulation No 881/2002, as amended by Regulation No 1286/2009, and the review of his listing is still ongoing.
47 The Council and the Commission argue, third, that if the present action were to be dismissed as inadmissible, the applicant would not thereby be deprived of an administrative or judicial remedy against the asset freeze imposed on him.
48 In that regard, the Council and the Commission state, in the first place, that the rights of defence of persons and entities named in the Sanctions Committee list are now codified by Regulation No 881/2002, as amended by Regulation 1286/2009. Under Article 7c of Regulation No 881/2002, as amended by Regulation No 1286/2009, persons who were on the list at issue before 3 September 2008 and who continue to be listed may submit a request to the Commission for a statement of the reasons for their inclusion and the Commission is under an obligation to communicate to them the statement of reasons which it receives from the Sanctions Committee, giving them an opportunity to express their views on the matter. The Commission is thus required to review its decision to impose an asset freeze upon the person concerned, and the decision which it takes at the end of that review is a measure intended to produce legal effects for the purposes of Article 263 TFEU, which is open to appeal before the Courts of the European Union.
49 In the present case, the statement of reasons drawn up by the Sanctions Committee on 7 September 2010 was communicated to the applicant on 10 September 2010, the Commission inviting him to submit his comments by 10 December 2010. Those comments were then forwarded by the Commission to the Sanctions Committee.
50 Moreover, even if the Court were to uphold the present action, the real outcome of the dispute – regarding the continued freezing of the applicant’s funds – would according to the Council and the Commission be contingent on the outcome of the administrative process of review that is currently under way.
51 The Council and the Commission refer, in the second place, to the possibilities of recourse to the Office of the Ombudsperson, established by Security Council Resolution 1904(2009).
52 The applicant disputes these arguments and submits that the present action for failure to act is admissible.
Findings of the Court
53 With regard to the first of the arguments of the Commission and the Council, it should be stated at the outset that the present action calls upon the Court only ‘to declare that the Commission’s failure to remove [the applicant’s] name from the list at issue is unlawful’ and does not seek the annulment of a measure. Such an action therefore appears, in form, to be an action for failure to act under Article 265 TFEU and not an action for annulment under Article 263 TFEU.
54 It is true, as correctly stated by the Commission and the Council, that an applicant is not permitted to circumvent the expiry of the period for bringing an action for annulment under Article 263 TFEU brought against an act of an institution by using ‘the procedural artifice’ of an action for failure to act under Article 265 TFEU concerning the refusal of that institution to annul or revoke that act (Joined Cases 21/61 to 26/61 Meroni and Others v High Authority [1962] ECR 73, 78).
55 In particular, it is not sufficient to argue that such an act was adopted in infringement of the FEU Treaty, because that treaty provides, particularly in Article 263, for other methods of recourse by which an allegedly illegal European Union measure may be disputed and if necessary annulled on the application of a duly qualified party. To admit that the parties concerned could ask the institution from which the measure came to revoke it and, in the event of that institution’s failing to act, refer such failure to the Court of the European Union as an illegal omission to deal with the matter, would amount to providing them with a method of recourse parallel to that of Article 263 TFEU, which would not be subject to the conditions laid down by the Treaty. Thus, such an action does not satisfy the requirements of Article 265 TFEU and must therefore be held to be inadmissible (Joined Cases 10/68 and 18/68 Eridania and Others v Commission [1969] ECR 459, paragraphs 16 to 18).
56 In the present case, the period for bringing an action for annulment against Regulation No 1629/2005 which initially ordered the freezing of the applicant’s funds expired on 30 December 2005 and it is precisely the Commission’s refusal to revoke that regulation which constitutes the failure to act alleged in the present action.
57 Furthermore, the applicant had brought an action against Regulation No 881/2002, as amended by Regulation No 1629/2005, by application a copy of which arrived by fax at the Registry on 23 December 2005. As the original application was however lodged at the Registry only on 6 January 2006 following a mistake made by the law firm representing the applicant, said to have been caused by the fault of a young unexperienced secretary and by the Christmas period, that action was dismissed as manifestly inadmissible as it had been brought out of time, by the order in Yusef v Council.
58 That being the case, from a purely subjective point of view of the applicant, the circumstances described in the previous paragraph tend if anything to show that it is not the applicant’s intention to circumvent the expiry of the period for bringing an action for annulment by means of the present action for failure to act, because he did not approach the Commission again before 7 March 2009, that is to say for a period of three years following the dismissal of that action as inadmissible.
59 Those are in reality new circumstances, arising well after the adoption of Regulation No 1629/2005 and the dismissal of the action for annulment of that regulation as inadmissible which, as will be shown below, made the applicant decide, first, on 7 March 2009, to seek access to the documents relied on by the Commission to justify the freezing of its funds (see paragraph 5 above), second, on 18 March 2010, to call upon the Commission to remove his name from the list at issue (see paragraph 9 above) and, third, on 23 July 2010, in the absence of any reaction by the Commission to being so called upon within the period of two months laid down in Article 265 TFEU, to bring the present action for failure to act.
60 It is settled case-law that the existence of new substantial facts may justify the submission of a request for a review of a decision which was not disputed within the period laid down (Case 127/84 Esly v Commission [1985] ECR 1437, paragraph 10; Case 161/87 Muysers and Tülp v Court of Auditors [1988] ECR 3037, paragraph 11; order of the General Court of 11 July 1997 in Case T‑16/97 Chauvin v Commission [1997] ECR I‑A‑237 and II‑681, paragraph 37).
61 In that context, attention should also be paid to the particular temporal characteristics of the measure at issue in the present case, which distinguishes it from the measures which led to the case-law noted at paragraph 54 above.
62 In contrast to such measures intended to produce definitive legal effects, measures on the freezing of funds adopted pursuant to Regulation No 881/2002 constitute temporary precautionary and preventive measures, which are not supposed to deprive the persons concerned of their property (Kadi I, Court of Justice, paragraph 358). The validity of such measures thus always depends on whether the factual and legal circumstances which led to their adoption continue to apply and on the need to persist with them in order to achieve their aims.
63 It is the – by definition – provisional nature of a measure freezing funds which means that the answer proposed by the case-law to which reference is made in paragraph 54 above is not applicable in the present case. Contrary to a measure intended to produce permanent legal effects, it must be possible to request the review of a measure freezing funds adopted pursuant to Regulation No 881/2002 at any time, in order to establish whether its retention is justified and, in the event of the Commission’s refusal to accede to such a request, to challenge that refusal by means of an action for failure to act.
64 It must be pointed out in that regard that, as noted by the Court in paragraph 365 of the Kadi I judgment, the resolutions of the Security Council to which Regulation 881/2002 is intended to give effect themselves provide for a mechanism for the periodic review of the general system of measures they enact and also for a procedure enabling the persons concerned ‘at any time’ to submit their case to the Sanctions Committee for re-examination (see also paragraph 13 above).
65 Finally, it should be added in that regard that to accept the arguments of the defendant and intervening institutions would, once the period for bringing an action for annulment of a measure freezing funds had been adopted, be tantamount to granting the Commission the excessive power to freeze a person’s funds indefinitely, beyond review by any court and even if the factors which initially justified the adoption of that measure changed or even no longer applied (see, by analogy, Case T‑341/07 Sison v Council [2009] ECR II‑3625, paragraph 116).
66 Furthermore, in his Opinion in Eridania and Others v Commission, Advocate General Roemer had already expressed the opinion that an applicant who allows the period prescribed for bringing an application against a measure to expire cannot ‘ask for annulment’ (sic) within the framework of the procedure of Article 265 TFEU, ‘unless he can prove that new facts have come to light’. Equally, it is apparent from the precise wording of paragraph 16 of the judgment in Eridania and Others v Commission that Eridania could have succeeded if it had been able to prove that there was a legal obligation on the Commission to revoke the contested decisions, for example on the occurrence of new facts as envisaged by Advocate General Roemer.
67 The procedural steps taken by the applicant in the present case, which indeed relied on certain new facts, are thus fully compatible with the ‘settled and consistent’ case-law on which the Commission and Council rely in order to contest his arguments.
68 Furthermore, those procedural steps are expressly envisaged by the legislation in force when the Commission was called upon to act (18 March 2010), that is to say, Article 7c of Regulation No 881/2002, as amended, with effect from 26 December 2009, by Regulation No 1286/2009. First, that provision, in its first three paragraphs, lays down a review procedure specifically in favour of persons who, like the applicant, were included on the list at issue before 3 September 2008 (that is, before the delivery of the judgment in Kadi I, Court of Justice). Those persons may request the Commission to communicate to them a statement of the reasons for their inclusion on the list at issue, they may submit observations in that regard and the Commission must therefore review its decision to include them on the list in question, in the light of those observations. Second, Article 7c(4) lays down a procedure for review for persons who were included on the list at issue who, ‘based on substantial new evidence’, make a further request for removal. In both cases, a right of action for failure to act must lie, in accordance with Article 265 TFEU as interpreted by the case-law, where the Commission fails to carry out the review provided for under Article 7c of Regulation No 881/2002.
69 In the present case, there are, as specifically alleged by the applicant in its letter of 18 March 2010 to the Commission, two new factual developments, that is, first, the judgment of the Court of Justice in Kadi I, delivered on 3 September 2008, which lays down the formal and substantive conditions under which a measure freezing funds may be imposed and the procedural guarantees on which the persons concerned must be able to rely and, second, the fact that the United Kingdom Government, having examined, in the context of national proceedings, the evidence on the basis of which the applicant’s name was included in the Sanctions Committee list, had concluded, around June 2009, that he no longer satisfied the criteria for inclusion in that list and stated that it would approach that committee in order to seek the removal of his name therefrom (see paragraphs 7 and 9 above).
70 With regard to the stance taken by the United Kingdom authorities in favour of the applicant, that stance is apparent from the witness statement made on 19 June 2009 before the High Court by the Head of the FCO Sanctions Team, on behalf of that ministry (see paragraph 7 above). There is no doubt that it constitutes new evidence since, originally, the United Kingdom did not object to the freezing of the applicant’s funds, decided on by the Sanctions Committee on 29 September 2005 (see paragraph 1 above). According to the rules governing the internal functioning of the Sanctions Committee, as then in force, the measures freezing funds were adopted by consensus, thus by unanimity. The United Kingdom, as a permanent member of the Security Council and, ipso facto, of the Sanctions Committee, therefore necessarily indicated its agreement to the freezing of the applicant’s funds, in September 2005, before changing its position in 2009. The applicant states that it also became aware of that change of position in June 2009, at the time of the High Court proceedings, which appears confirmed by the evidence in the file and is in any case not contested by the Commission. That new evidence may also be regarded as substantial, if only because that Member State is a permanent member of the Security Council and moreover the State of residence of the person concerned.
71 With regard to the ruling in Kadi I, Court of Justice, it is true that, according to settled case-law, the legal effects of a judgment of a Court of the European Union in annulment proceedings concern, apart from the parties, only the persons directly affected by the measure annulled and such a judgment can only constitute a new factor with regard to those persons (Case 43/64 Müller v Councils of the EEC, EAEC and ECSC [1965] ECR 385, 397; Case 52/64 Pfloeschner v Commission [1965] ECR 981, 987; and Case 125/87 Brown v Court of Justice [1988] ECR 1619, paragraph 13; Order of the General Court in Case T‑135/95 Progoulis v Commission [1995] ECR‑SC I‑A‑297 and II‑907, para. 41).
72 In the present case, however, account must be taken not only of the ruling in Kadi I, Court of Justice, but also and above all of the change of attitude and approach on the part of the Commission which that judgment was bound to engender and which itself amounts to a substantial new factor. Until that judgment was delivered, the Commission took the view, first, that it was strictly bound by the decisions of the Sanctions Committee, without having any discretion of its own and, second, that the usual guarantees of the rights of the defence did not apply in the context of the adoption of or challenge to a measure freezing funds under Regulation No 881/2002. That point of view was moreover confirmed by the General Court in its judgment in Case T‑315/01 Kadi v Council and Commission [2005] ECR II‑3649 (‘Kadi I, General Court’). By contrast, immediately following the ruling in Kadi I, Court of Justice, which set aside Kadi I, General Court, and precisely in order to comply with that judgment, the Commission radically changed its approach and undertook to review, if not on its own initiative, then at least at the express request of the persons concerned, all the other cases of freezing of funds pursuant to Regulation No 881/2002.
73 In that context, it should be recalled that, according to the Prelex database, the Commission’s proposal to the Council for the adoption of a Regulation amending Regulation No 881/2002, in order to comply with Kadi I, Court of Justice, was formally adopted by the Commission on 22 April 2009 (see, in particular, recitals 4, 5 and 8 to the preamble and Article 1 of that proposal, according to which an Article 7c and an Article 7a(3) would be inserted in Regulation 881/2002).
74 It is true that those new provisions, as later amended in the course of the legislative procedure, did not acquire the force of law before their formal adoption by the Council and their entry into force, on the third day following their publication in the Official Journal of the European Union, on 23 December 2009. The fact nevertheless remains that they also show that the Commission recognised that the persons who were included on the list at issue before the judgment in Kadi I, Court of Justice was delivered, had been so included in disregard of their fundamental rights and, above all, that it now intended to put that situation right in future. The Court considers that this amounts to a substantial change in circumstances compared to the situation of the persons who were included on the list at issue before the judgment in Kadi I, Court of Justice, was delivered.
75 Taking the foregoing considerations into account, the main argument of the Commission and the Council must be rejected as unfounded (see, to that effect, order of the Court of 1 September 2011 in Case T‑102/09 Elosta v Commission, not published in the ECR, paragraph 39).
76 With regard to the second argument submitted by the Commission and the Council, based on the lack of any duty to act, it concerns not the admissibility of the action but its substance. According to settled case-law, in order to rule on the merits of the claim for a declaration of failure to act, it is necessary to ascertain whether, at the time when the Commission was called upon to act pursuant to Article 265 TFEU, it was under any obligation to act (see judgment of 20 September 2011 in Joined Cases T‑400/04 and T‑402/04 to T‑404/04 Arch Chemicals and Arch Timber Protection v Commission, not published in the ECR, paragraph 57, and judgment of 29 September 2011 in Case T‑442/07 Ryanair v Commission, not published in the ECR, paragraphs 27 and 28 and case-law cited).
77 Finally, the third argument submitted by the Commission and the Council, based on the existence of alternative legal remedies under European Union law and before the Ombudsperson of the Sanctions Committee, is not relevant in the context of the examination of the admissibility of the present action. The latter is not dependent on the absence of other legal remedies in European Union law or in other legal systems which allow the applicant to challenge the lawfulness of the continued freezing of his assets.
78 It follows from all the foregoing considerations that the objection of inadmissibility raised by the Commission must be dismissed.
Substance
Arguments of the parties
79 The applicant relies on three pleas in law in support of his action. The first plea alleges that the Commission failed itself to undertake a review of the basis for placing the applicant’s name on the list at issue. The second alleges infringement of his fundamental rights. The third alleges that the retention of his name on that list is ‘irrational’.
80 By its first plea, the applicant claims that the Commission is under an obligation to assess, for itself, the underlying material justifying any inclusion of a person’s name in the list at issue, so as to ensure that such inclusion is justified. In the present case, the Commission manifestly failed to meet that obligation, even after the judgment in Kadi I, Court of Justice, was delivered.
81 The Commission responds that this plea does not relate to the alleged failure to act, but rather to its duty – under Regulation No 881/2002 as amended by Regulation 1286/2009, adopted following the judgment in Kadi I, Court of Justice – to assess the justification for placing the name of the person concerned on the list at issue. According to the Commission, a plea of this nature can succeed only in an action for annulment. Moreover, by claiming that the Commission failed to review his case, the applicant has not established that the Commission is under a duty to remove his name from the list at issue.
82 By its second plea, the applicant claims that, as no communication whatsoever has been forthcoming as to the justification for placing his name on the list at issue or as to the evidence adduced against him, his fundamental rights – in particular, his rights of defence, his right to an effective judicial remedy and his right to respect for property – have been breached in the same way as the fundamental rights of the applicants were breached in the cases giving rise to the judgment in Kadi I, Court of Justice and to the judgment in Case T‑318/01 Othman v Council and Commission [2009] ECR II‑1627. In so far as the communication of such information might have been precluded for reasons of national security, the applicant refers also to the judgment of the European Court of Human Rights of 19 February 2009 in A and Others v United Kingdom No 3455/05 § 220, ECHR 2009).
83 The Commission replies that no duty arises from Kadi I, Court of Justice to remove the name of the applicant from the list at issue. Even if it were to be admitted that the Commission had a duty to act in relation to the applicant after the judgment in Kadi I, Court of Justice, that duty would not, according to the Commission, have consisted in the mere removal of the applicant’s name from that list, but in providing satisfactory legal safeguards. As it is, the Commission fulfilled that duty by proposing to the Council the adoption of Regulation No 1286/2009 and by ensuring that, once it was adopted, the applicant received the benefit of the safeguards provided for under that regulation. The applicant received the statement of reasons for placing his name on the list at issue, he submitted his observations in that regard and the review of his listing is still underway.
84 By its third plea in law, the applicant claims that the continued inclusion of his name in the list at issue is irrational as there is no evidence that the criteria which must be met for that purpose under Regulation No 881/2002 are satisfied in the present case and that, on the contrary, the FCO considers that he no longer meets those criteria.
85 The Commission replies that the simple allegation that the continued inclusion of the applicant’s name in the list at issue is ‘irrational’ cannot serve as a basis for a duty on the part of the Commission to revoke it. The Commission states, moreover, that the review procedure as defined in Article 7c of Regulation No 881/2002 is still underway.
Findings of the Court
86 For the purposes of the present judgment, it is not necessary to examine the three pleas in law separately since the common argument underlying those pleas is based entirely on the persistent failure by the Commission to observe the principles stated by the Court of Justice in its Kadi I judgment.
87 In that regard, it is settled case-law that, in order to rule on the merits of the claim for a declaration of failure to act, it is necessary to ascertain whether, at the time when the Commission was called upon to act pursuant to Article 265 TFEU, that is to say, on 18 March 2010, that institution was under any obligation to act (see Ryanair v Commission, paragraph 28 and case-law cited).
88 At that date, the conditions under which the Commission is bound to act, on the request of a person whose funds were frozen before 3 September 2008 and who asks to be removed from the list at issue, were governed, first, by Article 7c of Regulation No 881/2002, as amended by Regulation No 1286/2009, which entered into force on 26 December 2009 and, second, by the case-law principles which emerge from Kadi I, Court of Justice.
89 Under Article 7c of Regulation No 881/2002, as amended by Regulation No 1286/2009:
‘1. Persons, entities, bodies and groups which were included in [the list at issue] before 3 September 2008 and continue to be listed, may present to the Commission a request for a statement of reasons …
2. As soon as the requested statement of reasons is provided by the Sanctions Committee, the Commission shall communicate it to the person, entity, body or group concerned, providing him, her or it an opportunity to express his, her or its views on the matter.
3. Where observations are submitted, the Commission shall review the decision to include the person, entity, body or group concerned in [the list at issue], in the light of those observations and after following the procedure referred to in Article 7b(2). Those observations shall be forwarded to the Sanctions Committee. The Commission shall communicate the result of its review to the person, entity, body or group concerned. The result of the review shall also be forwarded to the Sanctions Committee.
4. If a further request is made, based on substantial new evidence, to remove a person, entity, body or group from [the list at issue], the Commission shall conduct a further review in accordance with paragraph 3 and after following the procedure referred to in Article 7b(2).’
90 According to paragraphs 348 and 349 of Kadi I, Court of Justice, the institution of the European Union concerned, when deciding to freeze the funds of a person under Regulation No 881/2002, is obliged, in order to respect his rights of the defence, in particular the right to be heard and the right to an effective judicial remedy, to communicate to the person concerned the evidence used against him or to grant him the right to be informed of that evidence within a reasonable period after that measure was enacted and to give him the right to make his point of view in that respect known to advantage.
91 It follows, in addition, from the broad logic of Kadi I, Court of Justice and, more specifically, from Kadi II, General Court (paragraphs 171 and 172), which was not called into question by Kadi II, Court of Justice, that the Commission, far from regarding itself as strictly bound by the assessments of the Sanctions Committee, must on the contrary envisage calling those findings into question in the light of the observations of the person concerned, failing which that person’s rights of the defence will be observed only in the most formal and superficial sense.
92 In its Kadi II judgment (paragraphs 114 to 116), the Court confirmed that, when comments are made by the individual concerned on the summary of reasons [of the Sanctions Committee], the competent authority of the European Union is obliged to examine, carefully and impartially, whether the alleged reasons are well founded, in the light of those comments and any exculpatory evidence provided with those comments. In that context, it is for that authority to assess, having regard, inter alia, to the content of any such comments, whether it is necessary to seek the assistance of the Sanctions Committee and, through that committee, the Member of the UN which proposed the listing of the individual concerned on that committee’s list, in order to obtain, in that spirit of effective cooperation which, under Article 220(1) TFEU, must govern relations between the European Union and the organs of the United Nations in the fight against international terrorism, the disclosure of information or evidence, confidential or not, which would enable it to discharge its duty of careful and impartial examination. Lastly, without going so far as to require a detailed response to the comments made by the individual concerned, the obligation to state reasons laid down in Article 296 TFEU entails in all circumstances, not least when the reasons stated for the European Union measure represent reasons stated by an international body, that that statement of reasons identify the individual, specific and concrete reasons why the competent authorities consider that the individual concerned must be subject to restrictive measures.
93 Also in Kadi II, Court of Justice (paragraph 135), the Court inferred from that analysis that, for the rights of the defence and the right to effective judicial protection to be respected, first, the competent European Union authority must (i) disclose to the person concerned the summary of reasons provided by the Sanctions Committee which is the basis for listing or maintaining the listing of that person’s name on the list at issue, (ii) enable him effectively to make known his observations on that subject and (iii) examine, carefully and impartially, whether the reasons alleged are well founded, in the light of the observations presented by that person and any exculpatory evidence that may be produced by him.
94 In the present case, it is common ground that the applicant was unable to rely on any of those principles or guarantees in the context of the adoption of Regulation No 1629/2005, even after the judgment in Kadi I, Court of Justice, was delivered, until the two dates on which he, first, asked for access to the documents used by the Commission in order to justify the inclusion of his name in the list at issue, then called upon that institution to remove his name from that list.
95 In particular, according to the Commission’s letter of 23 April 2009, thus after the judgment in Kadi I, Court of Justice, was delivered, when adopting Regulation No 1629/2005, the Commission acted on the basis only of a mere Sanctions Committee press release which did not contain any statement of reasons. The Commission did not receive any other relevant document from the Sanctions Committee before 31 August 2010, when it received that committee’s statement of reasons.
96 The Commission was clearly under an obligation to act with regard to the applicant, in order to remedy those procedural and substantive irregularities, if not immediately after the Court had delivered its judgment in Kadi I, Court of Justice, or in response to the applicant’s letter of 7 March 2009, then at the very least and by the latest in reply to his letter calling upon it to act of 18 March 2010.
97 That applies with all the more force since the applicant had also referred to new and significant evidence which the Commission was at least obliged to examine, in order to assess whether it amounted to a change of circumstances such as to warrant, if appropriate, the revocation of Regulation No 1629/2005, without retroactive effect.
98 It follows that, even if the Commission took the view that the imposition on the applicant of the restrictive measures laid down by Regulation No 881/2002, as implemented by Regulation No 1629/2005, was and remained justified, in substance, in the light of the personal situation of the person concerned as apparent from the file, including the new evidence brought to its attention, it was in any case bound as soon as possible to remedy the manifest infringement of the applicable principles which occurred during the adoption of Regulation No 1629/2005, after having found that that infringement was identical, in essence, to the infringement of those same principles determined by the Court of Justice and by the General Court in their respective Kadi I and Kadi II judgments (see, to that effect, Kadi I, Court of Justice, paragraphs 373 to 376).
99 Since it is common ground that the Commission failed to respond effectively or adequately to the applicant’s letter of 18 March 2010, by which the applicant called upon it to observe those principles, relying specifically on Kadi I, Court of Justice, it must be held that the Commission was in the position of having failed to act in that regard on 18 May 2010, following the expiry of the period of two months after having been called upon to act pursuant to that letter.
100 Although the Commission later communicated to the applicant, on 10 September 2010, the statement of reasons received from the Sanctions Committee on 31 August 2010, calling upon him to submit observations in that regard, then sent those observations to the Sanctions Committee in December 2010, while initiating the procedure of review of its decision to include the applicant’s name on the list at issue provided by Regulation No 881/2002, as amended by Regulation No 1286/2009, it must be held that that failure to act continued at the time when the oral procedure closed, since the infringement referred to in paragraph 96 above had still not been adequately remedied during the review procedure.
101 In that regard, the Commission’s argument, based on the fact that it had initiated the review procedure, which was still underway, and communicated to the applicant the statement of reasons which had been sent to it by the Sanctions Committee, must be rejected. It is settled case-law that a letter emanating from an institution, stating that examination of the questions raised is in progress, does not, however, constitute the definition of a position which brings to an end a failure to act (see Joined Cases T‑344/00 and T‑345/00 CEVA and Pharmacia Entreprises v Commission [2003] ECR II‑229, paragraph 80 and the case-law cited).
102 In particular, it is not acceptable that, more than four years after the ruling in Kadi I, Court of Justice, the Commission is still not in a position to discharge its obligation to examine the applicant’s case carefully and impartially (Kadi II, Court of Justice, paragraphs 114 and 135), where appropriate in ‘effective cooperation’ with the Sanctions Committee (Kadi II, Court of Justice, paragraph 115).
103 Furthermore, according to the statements made at the hearing, the Commission continues to regard itself as strictly bound by the findings of the Sanctions Committee and as not having any discretion in that regard, in contradiction with the principles laid down by the Court in Kadi I and Kadi II, Court of Justice (in particular in paragraphs 114, 115 and 135) and by the General Court in its Kadi II judgment.
104 Accordingly, it must be held that the way in which the Commission purports, by implementing the review procedure with regard to the applicant’s case, to remedy the infringements of the same kind as those found by the Court of Justice in its judgment in Kadi I, is formal and artificial in nature.
105 On the basis of the foregoing, the first two pleas in law, alleging respectively a failure by the Commission to act in relation to the review to be carried out by it of the findings of the Sanctions Committee and a similar failure of that institution to observe the applicant’s fundamental rights, in the procedure concerning the freezing of his funds, must be regarded as well founded.
106 That being the case, the extent of that failure to act must be determined.
107 As the Court of Justice already held in paragraph 374 of Kadi I, it cannot be excluded that, on the merits of the case, the retention of the applicant’s name on the list at issue may for all that prove to be justified, even in the light of the new evidence which the Commission must take into consideration. The failure to act held to have occurred does not therefore consist, as argued by the applicant, in a failure to revoke Regulation No 1629/2005, but in a more limited failure to observe the principles which apply in the procedure followed in the review of the applicant’s situation which has been requested.
108 Thus, the applicant’s first claim is to be upheld only in part, in holding that the Commission’s failure to remedy the procedural deficiencies and substantive irregularities affecting the freezing of his funds is unlawful.
109 Accordingly, the third plea must be rejected.
Costs
110 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. Since the Commission has, in essence, failed in its submissions and the applicant has applied for costs, the Commission must be ordered to pay the costs.
111 Under the first subparagraph of Article 87(4) of the Rules of Procedure, institutions which have intervened in the proceedings are to bear their own costs. The Council must therefore be ordered to bear its own costs.
112 In accordance with Article 97(3) of the Rules of Procedure, the applicant having been granted legal aid and the Court having ordered the Commission to pay the costs incurred by the applicant, the Commission will be required to refund to the Court cashier the sums advanced by way of legal aid.
On those grounds,
THE GENERAL COURT (Second Chamber)
hereby:
1. Declares that the European Commission has failed to fulfil its obligations under the FEU Treaty and under Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (EC) No 467/2001, by not remedying the procedural deficiencies and substantive irregularities affecting the freezing of the funds of Mr Hani El Sayyed Elsebai Yusef;
2. Dismisses the action as to the remainder;
3. Orders the Commission to pay, apart from its own costs, the costs incurred by Mr Yusef and the sums advanced by way of legal aid by the cashier of the Court;
4. Orders the Council of the European Union to bear its own costs.
Delivered in open court in Luxembourg on 21 March 2014.
[Signatures]