JUDGMENT OF THE GENERAL COURT (Sixth Chamber)
13 September 2018 (*)
(Common foreign and security policy — Restrictive measures adopted in view of Russia’s actions destabilising the situation in Ukraine — Retention of the applicant’s name on the list of entities to which the restrictive measures apply — Proportionality — Error of assessment — Obligation to state reasons — Fundamental rights)
In Case T‑515/15,
Joint-Stock Company ‘Almaz-Antey’ Air and Space Defence Corp., formerly OAO Concern PVO Almaz-Antey, established in Moscow (Russia), represented by A. Haak, C. Stumpf and M. Brüggemann, lawyers,
applicant,
v
Council of the European Union, represented by J.-P. Hix and P. Mahnič Bruni, acting as Agents,
defendant,
APPLICATION under Article 263 TFEU seeking annulment of (i) Council Decision (CFSP) 2015/971 of 22 June 2015 amending Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2015 L 157, p. 50); (ii) the letter from the Council dated 31 July 2015 by which the Council stated that the applicant should remain subject to the measures in Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 13) and Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 1); (iii) Council Decision (CFSP) 2015/2431 of 21 December 2015 amending Decision 2014/512 (OJ 2015 L 334, p. 22); and (iv) Council Decision (CFSP) 2016/1071 of 1 July 2016 amending Decision 2014/512 (OJ 2016 L 178, p. 21), in so far as those acts concern the applicant,
THE GENERAL COURT (Sixth Chamber),
composed of G. Berardis (Rapporteur), President, D. Spielmann and Z. Csehi, Judges,
Registrar: E. Coulon,
gives the following
Judgment
Background to the dispute
1 The applicant, Joint-Stock Company ‘Almaz-Antey’ Air and Space Defence Corp., formerly OAO Concern PVO Almaz-Antey, is a joint-stock company established in Moscow, Russia, operating, inter alia, in the defence sector.
2 On 20 February 2014, the Council of the European Union condemned in the strongest terms the use of violence in Ukraine. It called for an immediate end to the violence, and full respect for human rights and fundamental freedoms in Ukraine. The Council also envisaged the introduction of restrictive measures against those responsible for human rights violations, violence and use of excessive force.
3 At an extraordinary meeting held on 3 March 2014, the Council condemned acts of aggression by the Russian armed forces, which constituted a clear violation of Ukrainian sovereignty and territorial integrity, as well as the authorisation given by the Soviet Federatsii Federal’nogo Sobrania Rossiskoï Federatsii (Federation Council of the Federal Assembly of the Russian Federation) on 1 March 2014 for the use of the armed forces on the territory of Ukraine. The European Union called on the Russian Federation to immediately withdraw its armed forces to the areas of their permanent stationing, in accordance with its international obligations.
4 On 5 March 2014, the Council adopted restrictive measures focused on the freezing and recovery of misappropriated Ukrainian State funds.
5 On 6 March 2014, the Heads of State or Government of the European Union endorsed the Council conclusions adopted on 3 March 2014. They strongly condemned the unprovoked violation of Ukrainian sovereignty and territorial integrity by the Russian Federation and called on the Russian Federation to immediately withdraw its armed forces to the areas of their permanent stationing, in accordance with the relevant agreements. The Heads of State or Government of the European Union stated that any further steps by the Russian Federation to destabilise the situation in Ukraine would lead to additional and far-reaching consequences for relations in a broad range of economic areas between the European Union and its Member States, on the one hand, and the Russian Federation, on the other hand. They called on the Russian Federation to enable immediate access for international monitors, emphasising that the solution to the crisis in Ukraine had to be based on the territorial integrity, sovereignty and independence of Ukraine, as well as strict adherence to international standards.
6 On 16 March 2014, the legislature of the Autonomous Republic of Crimea and the local government of Sevastopol, both subdivisions of Ukraine, held a referendum on the status of Crimea. In that referendum, the people of Crimea were asked whether they wished to join the Russian Federation as a federal subject, or if they wished to restore the 1992 Constitution and Crimea’s status as a part of Ukraine. The reported result from the Autonomous Republic of Crimea was a 96.77% vote for integration of the region into the Russian Federation, with an 83.1% voter turnout.
7 On 17 March 2014, the Council adopted further conclusions with regard to Ukraine. The Council strongly condemned the referendum in Crimea on joining the Russian Federation, held on 16 March 2014, which it found to be in clear breach of the Ukrainian Constitution. It urged the Russian Federation to take steps to de-escalate the crisis, immediately withdraw its forces back to their pre-crisis numbers and garrisons in line with its international commitments, begin direct discussions with the Government of Ukraine and avail itself of all relevant international mechanisms to find a peaceful and negotiated solution, in full respect of its bilateral and multilateral commitments to respect Ukraine’s sovereignty and territorial integrity. In this respect, the Council expressed regret that the United Nations Security Council was not able to adopt a resolution, owing to a veto by the Russian Federation. Furthermore, the Council urged the Russian Federation not to take steps to annex Crimea in breach of international law.
8 On the same day, the Council adopted, on the basis of Article 29 TEU, Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2014 L 78, p. 16), and, on the basis of Article 215 TFEU, Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2014 L 78, p. 6), whereby it imposed travel restrictions and asset freeze measures targeting persons responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine as well as persons or entities associated with them.
9 On 17 March 2014, the Russian Federation officially recognised the results of the referendum held in Crimea on 16 March 2014. Following that referendum, the Supreme Council of Crimea and Sevastopol City Council declared the independence of Crimea from Ukraine and requested to join the Russian Federation. On the same day, the Russian President signed a decree recognising the Republic of Crimea as a sovereign and independent State.
10 On 21 March 2014, the European Council recalled the statement of the Heads of State or Government of the European Union of 6 March 2014 and asked the European Commission and the Member States to prepare possible further targeted measures.
11 On 23 June 2014, the Council decided that the import into the European Union of goods originating in Crimea or Sevastopol should be prohibited, with the exception of goods originating in Crimea or Sevastopol for which a certificate of origin had been issued by the Ukrainian Government.
12 Following the crash and destruction of Malaysia Airlines flight MH17 at Donetsk (Ukraine) on 17 July 2014, the Council requested the Commission and the European External Action Service (EEAS) to finalise their preparatory work on possible targeted measures and to present, no later than 24 July 2014, proposals for taking action, including on access to capital markets, defence, dual-use goods, and sensitive technologies, including in the energy sector.
13 On 31 July 2014, in view of the gravity of the situation in Ukraine despite the adoption, in March 2014, of travel restrictions and asset freezes against certain natural and legal persons, the Council adopted, on the basis of Article 29 TEU, Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 13) in order to introduce targeted restrictive measures concerning the areas of access to capital markets, defence, dual-use goods, and sensitive technologies, including in the energy sector.
14 Considering that the latter measures fell within the scope of the FEU Treaty and that putting them into effect required regulatory action at EU level, the Council adopted on the same day, on the basis of Article 215 TFEU, Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 1), which contains more detailed provisions to give effect, both at EU level and in the Member States, to the requirements of Decision 2014/512.
15 The stated objective of those restrictive measures was to increase the costs of the Russian Federation’s actions to undermine Ukraine’s territorial integrity, sovereignty and independence, and to promote a peaceful settlement of the crisis. To that end, Decision 2014/512 established, in particular, prohibitions on the export of certain sensitive products and technologies to the oil sector in Russia and restrictions on the access of certain operators in that sector to the EU capital market.
16 Subsequently, the Council adopted, on 8 September 2014, Decision 2014/659/CFSP amending Decision 2014/512 (OJ 2014 L 271, p. 54), and Regulation (EU) No 960/2014 amending Regulation No 833/2014 (OJ 2014 L 271, p. 3), in order to extend the prohibition decided on 31 July 2014 in relation to certain financial instruments and to impose additional restrictions on access to the capital market.
17 Article 3a of Decision 2014/512, as amended by Decision 2014/659 and Council Decision 2014/872/CFSP of 4 December 2014 amending Decision 2014/512 and Decision 2014/659 (OJ 2014 L 349, p. 58), provides that:
‘1. The direct or indirect sale, supply, transfer or export of dual use goods and technology as included in Annex I to Regulation (EC) No 428/2009 to any person, entity or body in Russia as listed in Annex IV to this Decision by nationals of Member States or from the territories of Member States or using their flag vessels or aircraft, shall be prohibited whether originating or not in their territories.
2. It shall be prohibited:
(a) to provide technical assistance, brokering services or other services related to goods and technology set out in paragraph 1 and to the provision, manufacture, maintenance and use of these goods and technology, directly or indirectly to any person, entity or body in Russia, as listed in Annex IV;
(b) to provide financing or financial assistance related to goods and technology referred to in paragraph 1, including in particular grants, loans and export credit insurance, for any sale, supply, transfer or export of these goods and technology, or for the provision of related technical assistance, brokering services or other services, directly or indirectly to any person, entity or body in Russia, as listed in Annex IV.
3. The prohibitions in paragraph 1 and 2 shall be without prejudice to the execution of contracts concluded before 12 September 2014 or ancillary contracts necessary for the execution of such contracts, and to the provision of assistance necessary for the maintenance and safety of existing capabilities within the EU.
4. The prohibitions in paragraphs 1 and 2 shall not apply to exports, sale, supplies or transfers of dual-use goods and technology for the aeronautics and for the space industry, or the related provision of technical or financial assistance, for non-military use and for a non-military end user, as well as for maintenance and safety of existing civil nuclear capabilities within the EU, for non-military use and for a non-military end user.’
18 The applicant’s name appears in Annex IV to Decision 2014/512, as amended, together with the following information: ‘state-owned enterprise; arms, ammunition, research’.
19 Likewise, Article 2a of Regulation No 833/2014, as amended by Regulation No 960/2014 and by Council Regulation (EU) No 1290/2014 of 4 December 2014 amending Regulation No 833/2014, and amending Regulation No 960/2014 amending Regulation No 833/2014 (OJ 2014 L 349, p. 20), provides that:
‘1. It shall be prohibited to sell, supply, transfer or export, directly or indirectly, dual-use goods and technology as included in Annex I to Regulation (EC) No 428/2009, whether or not originating in the Union, to natural or legal persons, entities or bodies in Russia as listed in Annex IV to this Regulation.
2. It shall be prohibited:
(a) to provide technical assistance, brokering services or other services related to goods and technology set out in paragraph 1 and to the provision, manufacture, maintenance and use of these goods and technology, directly or indirectly to any person, entity or body in Russia, as listed in Annex IV;
(b) to provide financing or financial assistance related to goods and technology referred to in paragraph 1, including in particular grants, loans and export credit insurance, for any sale, supply, transfer or export of these goods and technology, or for the provision of related technical assistance, brokering services or other services, directly or indirectly to any person, entity or body in Russia, as listed in Annex IV.
3. The prohibitions in paragraphs 1 and 2 shall be without prejudice to the execution of contracts concluded before 12 September 2014, or ancillary contracts necessary for the execution of such contracts, and to the provision of assistance necessary for the maintenance and safety of existing capabilities within the EU.
4. The prohibitions in paragraphs 1 and 2 shall not apply to the sale, supply, transfer or export of dual use goods and technology intended for the aeronautics and space industry, or the related provision of technical and financial assistance, for non-military use and for a non-military end user, as well as for maintenance and safety of existing civil nuclear capabilities within the EU, for non-military use and for a non-military end user.’
20 The applicant’s name appears in Annex IV to Regulation No 833/2014, as amended.
21 Article 7(1)(a) of Decision 2014/512, as amended, provides that:
‘1. No claims in connection with any contract or transaction the performance of which has been affected, directly or indirectly, in whole or in part, by the measures imposed under this Decision, including claims for indemnity or any other claim of this type, such as a claim for compensation or a claim under a guarantee, notably a claim for extension or payment of a bond, guarantee or indemnity, particularly a financial guarantee or financial indemnity, of whatever form, shall be satisfied, if they are made by:
(a) entities referred to in point (b) or (c) of Article 1(1) and in point (c) or (d) of Article 1(2), or listed in Annex I, II, III or IV;’
22 Likewise, Article 11(1)(a) of Regulation No 833/2014, as amended, provides that:
‘1. No claims in connection with any contract or transaction the performance of which has been affected, directly or indirectly, in whole or in part, by the measures imposed under this Regulation, including claims for indemnity or any other claim of this type, such as a claim for compensation or a claim under a guarantee, notably a claim for extension or payment of a bond, guarantee or indemnity, particularly a financial guarantee or financial indemnity, of whatever form, shall be satisfied, if they are made by:
(a) entities referred to in points (b) and (c) of Article 5(1) and points (c) and (d) of Article 5(2), or listed in Annexes III, IV, V and VI’.
23 By letter of 31 July 2015, the Council informed the applicant, in reply to its letter of 19 May 2015, that the applicant was to remain subject to the measures in Decision 2014/512 and Regulation No 833/2014.
24 Council Decision (CFSP) 2015/971 of 22 June 2015 amending Decision 2014/512 (OJ 2015 L 157, p. 50), Council Decision (CFSP) 2015/2431 of 21 December 2015 amending Decision 2014/512 (OJ 2015 L 334, p. 22) and Council Decision (CFSP) 2016/1071 of 1 July 2016 amending Decision 2014/512 (OJ 2016 L 178, p. 21) provide for the applicability of Decision 2014/512 to be extended, until 31 January 2016, 31 July 2016 and 31 January 2017, respectively.
Procedure and forms of order sought
25 By application lodged at the Court Registry on 1 September 2015, the applicant brought the present action.
Stay of proceedings
26 By decision of 26 August 2016, adopted on the basis of Article 69(a) of the Rules of Procedure of the General Court, the President of the Ninth Chamber of the General Court, having obtained the observations of the parties, decided to stay the proceedings because there was at least a partial overlap between the acts whose scope and validity the Court of Justice was called upon to assess in Case C‑72/15, Rosneft, and the acts that were relevant in the present case.
27 Following the judgment of 28 March 2017, Rosneft (C‑72/15, EU:C:2017:236), the stay of proceedings came to an end, in accordance with Article 71(3) of the Rules of Procedure.
28 In those circumstances, the main parties were invited to submit their observations on the conclusions to be drawn from the judgment of 28 March 2017, Rosneft (C‑72/15, EU:C:2017:236) and the judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council (T‑255/15, not published, EU:T:2017:25), with respect to the pleas in law and arguments put forward in the present action.
29 The Council complied with that request within the period prescribed, while the applicant did not submit any observations in that regard.
Modification of the application
30 By document lodged at the Court Registry on 12 October 2015, the applicant modified its application so as also to include the letter from the Council dated 31 July 2015 informing it that the restrictive measures provided for in Decision 2014/512 and Regulation No 833/2014 should continue to apply in its case.
31 The Council submitted observations on that request by document lodged at the Court Registry on 15 December 2015.
32 By document lodged at the Court Registry on 1 March 2016, the applicant modified its application so as also to include annulment of Decision 2015/2431, in so far as that decision extends the applicability of the restrictive measures provided for in Decision 2014/512, including the listing of the applicant’s name among the entities affected by those measures, until 31 July 2016.
33 The Council submitted observations on that request by document lodged at the Court Registry on 26 April 2016.
34 By document lodged at the Court Registry on 19 August 2016, the applicant modified its application so as also to include annulment of Decision 2016/1071, in so far as that decision extends the applicability of the restrictive measures provided for in Decision 2014/512, including the listing of the applicant’s name among the entities affected by those measures, until 31 January 2017.
35 The Council submitted its observations on that request by document lodged at the Court Registry on 10 May 2017.
Change in the composition of the Chambers of the Court
36 Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Sixth Chamber, to which the present case was consequently allocated in accordance with Article 27(5) of the Rules of Procedure.
Closure of the oral part of the procedure
37 The Court (Sixth Chamber) has decided, pursuant to Article 108(2) of the Rules of Procedure, to close the oral part of the procedure.
Forms of order sought
38 The applicant claims that the Court should:
– annul (i) Decision 2015/971; (ii) the letter from the Council dated 31 July 2015; (iii) Decision 2015/2431; and (iv) Decision 2016/1071, in so far as those acts concern it;
– order the Council to pay the costs.
39 The Council contends that the Court should:
– dismiss the action as falling outside its jurisdiction or, in the alternative, as inadmissible in its entirety or, in the further alternative, as unfounded;
– order the applicant to pay the costs;
– in the event that Decision 2015/971 is annulled in so far as it concerns the applicant, order that the effects of Decision 2014/512, as amended, be maintained, in so far as that decision concerns the applicant, until the expiry of the period for bringing an appeal or, if an appeal is lodged within that period, until that appeal is dismissed.
40 In its written response to the question of the General Court following the judgment of 28 March 2017, Rosneft (C‑72/15, EU:C:2017:236), the Council stated that it no longer disputed the jurisdiction of the General Court, on the basis of the second paragraph of Article 275 TFEU.
Law
Admissibility
41 It is appropriate to examine separately the admissibility of the action as such, and the admissibility of the various modifications of the application.
Admissibility of the various modifications of the application
42 The applicant submitted three modifications of the application with a view to extending its action for annulment to encompass, first, the Council’s letter of 31 July 2015, secondly, Decision 2015/2431 and, thirdly, Decision 2016/1071 (see paragraphs 30 to 35 above).
43 It must be recalled in that regard that Article 86(1) of the Rules of Procedure provides that, where a measure the annulment of which is sought is replaced or amended by another measure with the same subject matter, the applicant may, before the oral part of the procedure is closed, or before the decision of the Court to rule without an oral part of the procedure, modify the application to take account of that new factor.
44 In accordance with the case-law, it would be contrary to the principle of good administration of justice and to the requirements of procedural economy to oblige the applicant to make a fresh application. Moreover, it would be inequitable if the institution in question were able, in order to counter criticisms of a measure contained in an application to the Courts of the European Union, to amend the contested measure or to substitute another for it and to rely in the proceedings on such an amendment or substitution in order to deprive the other party of the opportunity of extending its original pleadings to the later measure or of submitting supplementary pleadings directed against that measure (see judgment of 3 July 2014, Alchaar v Council, T‑203/12, not published, EU:T:2014:602, paragraph 62 and the case-law cited).
45 First, as regards the admissibility of the first modification of the application, in so far as it relates to the letter from the Council dated 31 July 2015, it should nevertheless be noted, as the Council rightly points out, that the letter of 31 July 2015 neither replaces nor amends any measure covered by the original application, but rather is intended to reply to the applicant’s letter of 19 May 2015 in which the applicant, inter alia, sought access to the information on which its listing was based, whilst disputing that listing (see paragraph 23 above).
46 While it is true that, by that letter, the Council stated that it remained of the view that the applicant should remain subject to the measures provided for notably in Decision 2014/512, that letter merely confirmed its assessment and was not intended either to replace or to amend the reasons given in that decision, as extended by Decision 2015/971 (see, to that effect, judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council, T‑255/15, not published, EU:T:2017:25, paragraph 38 and the case-law cited).
47 It must be held, therefore, that the applicant’s first request for modification of the application, relating to the letter from the Council dated 31 July 2015, must be declared inadmissible.
48 Secondly, as regards the second and third modifications of the application, relating to Decisions 2015/2431 and 2016/1071, it should be noted, as did the Council,that those decisions replaced Decision 2015/971 in the present case, since they were intended, just like that decision, to extend the applicability of Decision 2014/512 for a further period of six months. In addition, it should be noted that the second and third modifications of the application were submitted by the applicant before the oral part of the procedure was closed or before the decision of the Court to rule without an oral part of the procedure, in accordance with Article 86 of the Rules of Procedure.
49 Moreover, in order to be admissible, a request to modify the application must be submitted within the two-month period prescribed by the sixth paragraph of Article 263 TFEU, extended on account of distance by the period of 10 days provided for in Article 60 of the Rules of Procedure, which would be applicable if a separate action were brought against the further acts referred to. This time limit for bringing an action is mandatory and must be applied by the Courts of the European Union in such a way as to safeguard legal certainty and also the equality of persons before the law. It is, therefore, for the courts to ascertain, if necessary of their own motion, whether that time limit has been observed (see judgment of 9 July 2014, Al-Tabbaa v Council, T‑329/12 and T‑74/13, not published, EU:T:2014:622, paragraph 55 and the case-law cited).
50 In the present case, it is evident from paragraph 32 above that the applicant submitted the second modification of the application on 1 March 2016 to take account of the adoption of Council Decision 2015/2431 of 21 December 2015, renewing Decision 2014/512. It should be noted that, according to Article 59 of the Rules of Procedure, where the time limit allowed for initiating proceedings against a measure adopted by an institution runs from the publication of that measure in the Official Journal of the European Union, that time limit is to be calculated from the end of the 14th day after such publication. In this case, the two-month period for bringing proceedings that is prescribed by the sixth paragraph of Article 263 TFEU, extended on account of distance by the single period of 10 days provided for in Article 60 of the Rules of Procedure, thus started to run on 6 January 2016. Accordingly, the second modification of the application, submitted on 1 March 2016, is admissible.
51 Similarly, the applicant’s third request for modification was submitted on 19 August 2016 to take account of the adoption of Council Decision 2016/1071 of 1 July 2016, published in the Official Journal the following day. That modification, which was submitted within the prescribed period, is therefore also admissible.
52 Accordingly, the modifications of the application submitted by the applicant are admissible in so far as they relate to Decisions 2015/2431 and 2016/1071 and inadmissible as to the remainder.
Admissibility of the action
53 It should be observed as a preliminary point that, by its action, as extended by the various modifications of the application, the applicant seeks annulment of Decision 2015/971, Decision 2015/2431 and Decision 2016/1071 (‘the contested decisions’) in so far as they extend the applicability of the restrictive measures set out in Article 3a of and Annex IV to Decision 2014/512 (‘the relevant provisions of Decision 2014/512’).
54 According to the case-law, however, in a case in which the party concerned is not mentioned by name by a subsequent act amending the list on which its name has been entered, and even if that act does not alter the ground on which that party’s name was initially entered on the list, such an act must be understood as evidence of the Council’s intention to maintain the applicant’s name on the list, which has the consequence that the restrictive measures are maintained in its case, given that the Council has a duty to examine that list at regular intervals (see, to that effect, judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council, T‑255/15, not published, EU:T:2017:25, paragraph 43 and the case-law cited).
55 That reasoning applies equally in a situation, such as that of the present case, in which the contested decisions do not alter the list of persons and entities to which the restrictive measures apply but extend the time for which those measures are to be applicable. As the applicant argues, without the contested decisions, the measures laid down by the relevant provisions of Decision 2014/512 would have ceased to apply, and therefore those decisions must be treated in the same way as acts that reiterate the measures at issue with respect to the applicant.
56 As regards the applicant’s standing to bring proceedings, the Council contends that the applicant is not directly concerned, for the purposes of the fourth paragraph of Article 263 TFEU, by the measures introduced by the relevant provisions of Decision 2014/512, as extended by the contested decisions.
57 According to the Council, the legal situation of the applicant is not in any way affected by those acts, or by Article 3a of Decision 2014/512, given that the latter provision does not prohibit the entities referred to from carrying out certain activities, but prohibits the sale of dual use goods and technology to those entities by natural and legal persons who come under EU jurisdiction. The possible negative economic consequences of those acts for the applicant cannot be considered to affect the applicant’s legal situation within the meaning of the case-law.
58 Further, the implementation of the measures at issue in the present case is not purely automatic and would require the adoption of rules laid down in regulations, namely, in the present case, those laid down by Regulations No 833/2014 and No 960/2014. Consequently, since neither of the two conditions for direct concern to the applicant is met in the present case, the action should be declared inadmissible.
59 In the alternative, the Council also disputes the fact that the applicant is individually concerned by the contested decisions. The fact that a measure of general application is applicable to a small number of entities or that certain operators are more affected in economic terms than others is not sufficient to show that those entities are individually concerned by that measure.
60 The applicant disputes those arguments.
61 It should be borne in mind that, under the fourth paragraph of Article 263 TFEU, any natural or legal person may, under the conditions laid down in the first and second paragraphs of that article, institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures. The second limb of the fourth paragraph of Article 263 TFEU specifies that if the natural or legal person who brings the action for annulment is not a person to whom the contested act is addressed, the admissibility of the action is subject to the condition that the act is of direct and individual concern to that person. By means of the Treaty of Lisbon, there was also added to the fourth paragraph of Article 263 TFEU a third limb which relaxed the conditions of admissibility of actions for annulment brought by natural and legal persons. Since the effect of that limb is that the admissibility of actions for annulment brought by natural and legal persons is not subject to the condition of individual concern, it renders possible such legal actions against ‘regulatory acts’ which do not entail implementing measures and are of direct concern to the applicant (see, to that effect, judgment of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraphs 56 and 57).
62 As regards the condition relating to direct concern to the applicant, it should be borne in mind that, in accordance with settled case-law, the condition that there must be direct concern to a natural or legal person, as laid down in the fourth paragraph of Article 263 TFEU, requires the contested EU measure to affect directly the legal situation of the individual and leave no discretion to its addressees, who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from EU rules without the application of other intermediate rules (see, to that effect, judgment of 13 March 2008, Commission v Infront WM, C‑125/06 P, EU:C:2008:159, paragraph 47 and the case-law cited).
63 In the present case, it should be borne in mind that Article 3a of Decision 2014/512, as amended, prohibits, first, the direct or indirect sale, supply, transfer or export of dual use goods and technology as included in Annex I to Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (OJ 2009 L 134, p. 1) to any person, entity or body in Russia as listed in Annex IV to that decision by nationals of Member States or from the territories of Member States, and, secondly, the provision of technical assistance, brokering services, financing or financial assistance related to the goods and technology referred to, to any person, entity or body in Russia, as listed in Annex IV (see paragraph 17 above).
64 It must be held that the relevant provisions of Decision 2014/512 and the contested decisions, which extend the applicability of that decision, directly affect the legal situation of the applicant, which is designated by name in Annex IV to Decision 2014/512. The Council cannot therefore claim that the applicant’s legal situation is not directly affected by those provisions, which leave no discretion to the addressees of those provisions entrusted with the task of implementing them.
65 Similarly, the Court must reject the Council’s argument that the applicant’s legal situation is not directly affected, given that the measures imposed by the relevant provisions of Decision 2014/512 apply solely to bodies established in the European Union. Although those provisions lay down prohibitions which apply in the first place to credit institutions and other financial bodies established in the European Union, the aim and the effect of those prohibitions is directly to affect the entities, such as the applicant, whose economic activity is limited as a result of the application of those measures to them. Self-evidently it is for the bodies established in the European Union to apply those measures, given that the acts adopted by the EU institutions are not, as a rule, intended to apply outside the territory of the European Union. That does not, however, mean that the entities affected by the relevant provisions of Decision 2014/512 are not directly concerned by the restrictive measures applied with regard to them. Indeed, the fact of prohibiting EU operators from carrying out certain types of transaction with entities established outside the European Union amounts to prohibiting those entities from carrying out the transactions in question with EU operators. In addition, accepting the Council’s argument in that regard would be tantamount to considering that, even in cases of individual fund freezes, the listed persons subject to the restrictive measures are not directly concerned by such measures, given that it is primarily for the EU Member States and the natural or legal persons under their jurisdiction to apply them.
66 Moreover, the Council relies to no avail, in that regard, on the case giving rise to the order of 6 September 2011, Inuit Tapiriit Kanatami and Others v Parliament and Council (T‑18/10, EU:T:2011:419). In that case, the Court held that Regulation (EC) No 1007/2009 of the European Parliament and of the Council of 16 September 2009 on trade in seal products (OJ 2009 L 286, p. 36) affected only the legal situation of the applicants who were active in placing seal products on the EU market and affected by the general prohibition of the placing of those products on the market, unlike the applicants whose business activity was not placing those products on the market or those who were covered by the exception provided for by Regulation No 1007/2009 since, in principle, the placing on the EU market of seal products which resulted from hunts traditionally conducted by Inuit and other indigenous communities and contributed to their subsistence continued to be permitted (see, to that effect, order of 6 September 2011, Inuit Tapiriit Kanatami and Others v Parliament and Council, T‑18/10, EU:T:2011:419, paragraph 79). In the present case, by contrast, it is clear that the applicant is active in the defence sector caught by the relevant provisions of Decision 2014/512, and not merely on a market upstream or downstream of that sector, as the Council contends. In addition, the applicant is expressly referred to by those provisions, since its name appears in Annex IV to Decision 2014/512.
67 It must be concluded, therefore, that the contested decisions are of direct concern to the applicant, in that those decisions extend the applicability of the relevant provisions of Decision 2014/512 with respect to the applicant.
68 Next, without there being any need to examine whether the relevant provisions of Decision 2014/512, as extended by the contested decisions, entail implementing measures, it must be found that the condition relating to individual concern, provided for in the second limb of the fourth paragraph of Article 263 TFEU, is also satisfied in the present case.
69 It should be borne in mind in that regard that, in accordance with the fourth paragraph of Article 263 TFEU, to which the second paragraph of Article 275 TFEU refers, any inclusion in a list of persons or entities subject to restrictive measures allows that person or entity access to the Courts of the European Union, in that it is similar in that respect to an individual decision (see, to that effect, judgments of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 50; of 1 March 2016, National Iranian Oil Company v Council, C‑440/14 P, EU:C:2016:128, paragraph 44 and the case-law cited; and of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 103 and the case-law cited).
70 In the present case, since the applicant’s name is mentioned on the list in Annex IV to Decision 2014/512 among the entities to which the restrictive measures in Article 3a of that decision apply, the applicant must be considered to be individually concerned by those measures, and also by the contested decisions, which extend the applicability of those measures.
71 Any other approach would infringe Article 263 and the second paragraph of Article 275 TFEU and would therefore be contrary to the system of judicial protection established in the FEU Treaty, and to the right to an effective remedy enshrined in Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’) (see, to that effect, judgment of 16 July 2014, National Iranian Oil Company v Council, T‑578/12, not published, EU:T:2014:678, paragraph 36).
72 Accordingly, it must be concluded that the applicant is entitled to seek annulment of the contested decisions, in accordance with the second paragraph of Article 275 and the fourth paragraph of Article 263 TFEU, in so far as they extend the applicability with respect to the applicant of the restrictive measures imposed by the relevant provisions of Decision 2014/512.
Substance
73 The applicant raises three separate pleas in law, alleging, first, breach of the principle of proportionality; secondly, infringement of the fundamental rights enshrined in the Charter; and, thirdly, a manifest error of assessment.
74 The Court considers it appropriate to examine, first, the second plea, then, the third plea and, finally, the first plea.
The second plea in law, alleging, in essence, infringement of the obligation to state reasons and of the applicant’s fundamental rights
75 By its second plea, the applicant relies on infringement of the obligation to state reasons, of the rights of the defence and of its right to effective judicial protection, and on the unjustifiable nature of the infringements of its fundamental rights.
76 In the first place, as regards the obligation to state reasons, the applicant submits that the Council’s decision to impose restrictive measures must not only identify the legal basis for those measures but also the actual and specific reasons why the Council considers that such a measure must be adopted in respect of the person concerned. The Council had not, however, provided sufficient information in that regard, either when those measures were introduced or when they were extended. In particular, the indications given by the Council had not enabled the applicant to determine why it belongs to the category of ‘certain Russian entities in the defence sector’.
77 Nor had the Council named specific actions by the applicant that might have contributed to the destabilisation of Ukraine, or specified what types of material, arms or ammunition produced by its group had allegedly been used in Ukraine. It had also failed to specify the criteria used to select the entities targeted and to give any reasons as to how the sanctions imposed would further the desired aim or as to how the applicant was hindering or even influencing the successful implementation of the Minks agreements.
78 In the second place, the applicant relies on infringement of its rights of defence and its right to effective judicial protection, owing to the failure to disclose any evidence from which it might be established that the applicant or its products were involved in the destabilisation of Ukraine. In addition, the documents to which the applicant was eventually given access did not make clear what evidence the Council relied on in order to list the applicant’s name in Annex IV to Decision 2014/512.
79 In the third place, the applicant submits that the infringements of its rights of defence and of its right to effective judicial protection are unjustifiable, since they do not have a sufficiently solid factual basis and are not necessary, having regard to the principle of proportionality. The retention of its name on the list is therefore contrary to Article 52(1) of the Charter.
80 The Council disputes those arguments.
81 It is appropriate to examine separately the applicant’s complaints relating, first, to infringement of the obligation to state reasons; secondly, to infringement of the rights of defence and of the right to an effective judicial remedy; and, thirdly, to the lack of justification for the alleged infringements of its fundamental rights.
– The complaint alleging infringement of the obligation to state reasons
82 As provided in the second paragraph of Article 296 TFEU, ‘legal acts shall state the reasons on which they are based’. In addition, under Article 41(2)(c) of the Charter, which Article 6(1) TEU recognises as having the same legal value as the Treaties, the right to good administration includes, inter alia, ‘the obligation of the administration to give reasons for its decisions’.
83 It has consistently been held that the statement of reasons required by Article 296 TFEU and Article 41(2)(c) of the Charter must be appropriate to the nature of the contested act and to the context in which it was adopted. It must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the person concerned to ascertain the reasons for the measure and to enable the court having jurisdiction to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case (judgment of 14 April 2016, Ben Ali v Council, T‑200/14, not published, EU:T:2016:216, paragraph 94; see also, to that effect, judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council, T‑255/15, not published, EU:T:2017:25, paragraph 56).
84 It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. In particular, the reasons given for a measure adversely affecting a person are sufficient if that measure was adopted in a context which was known to that person and which enables him to understand the scope of the measure concerning him. Moreover, the degree of precision of the statement of the reasons for a measure must be weighed against practical realities and the time and technical facilities available for taking the measure (judgments of 14 April 2016, Ben Ali v Council, T‑200/14, not published, EU:T:2016:216, paragraph 95, and of 25 January 2017, Almaz-Antey Air and Space Defence v Council, T‑255/15, not published, EU:T:2017:25, paragraph 56).
85 According to the case-law, as regards provisions of general application, the statement of reasons may be limited to indicating the general situation which led to the adoption of the measures, on the one hand, and the general objectives which they are intended to achieve, on the other (see, to that effect, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 120 and the case-law cited).
86 It should, however, be recalled that, in the present case, the relevant provisions of Decision 2014/512, which were extended by the contested decisions, constitute, vis-à-vis the applicant, restrictive measures of individual application (see paragraph 69 above).
87 It has been made clear in the case-law that the statement of reasons for an act of the Council which imposed a restrictive measure had not only to identify the legal basis for that measure but also the actual and specific reasons why the Council considered, in the exercise of its discretion, that such a measure had to be adopted in respect of the person concerned (judgment of 3 July 2014, National Iranian Tanker Company v Council, T‑565/12, EU:T:2014:608, paragraph 38; see also, to that effect, judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council, T‑255/15, not published, EU:T:2017:25, paragraph 55).
88 Consequently, the Court must reject the Council’s argument that the criteria laid down in the case-law, relating to the obligation to state reasons for acts imposing individual restrictive measures, are not applicable to the present case.
89 Account should nevertheless be taken, in accordance with the case-law referred to in paragraph 91 below, of the context in which the restrictive measures were adopted and all the legal rules governing the matter in question.
90 In the present case, first, it must be borne in mind that all the restrictive measures concerned form part of the context, known to the applicant, of the international tension which preceded the adoption of the relevant provisions of Decision 2014/512, referred to in paragraphs 2 to 16 above. It is apparent from recitals 1 to 8 of Decision 2014/512 that the stated objective of those measures is to increase the costs of the Russian Federation’s actions to undermine Ukraine’s territorial integrity, sovereignty and independence, and to promote a peaceful settlement of the crisis. Decision 2014/512 thus describes the overall situation that led to its adoption and the general objectives it is intended to achieve (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 123).
91 Secondly, it must be recalled that the relevant provisions of Decision 2014/512 provide, under the conditions set out in those provisions, for the prohibition of the sale, supply, transfer or export of dual use goods and technology, and for the prohibition of the provision of technical assistance, brokering services or other services, and of financing or financial assistance related to the goods and technology referred to, to any person, entity or body in Russia as listed in Annex IV.
92 In that regard, it is apparent from recitals 4, 5 and 6 of Decision 2014/659, by which Article 3a was inserted in Decision 2014/512, that, in view of the gravity of the situation in Ukraine, the Council considered it appropriate to take further restrictive measures in response to the Russian Federation’s actions destabilising the situation in Ukraine. In that context, the Council considered it appropriate to provide for additional restrictions on access to the capital market targeting, inter alia, certain Russian entities in the defence sector, and to prohibit the sale, supply or transfer of dual-use items to certain persons, entities or bodies established in Russia.
93 The applicant nevertheless claims that it is not possible to determine why its name was included in the list in Annex IV to Decision 2014/512, or how the inclusion of its name would enable the objectives of those measures to be achieved.
94 It must, however, be found that the ‘actual and specific reasons’ why the Council considered, in the exercise of its discretion, that the measures in question had to be adopted in respect of the applicant, within the meaning of the case-law mentioned in paragraph 87 above, correspond in the present case to the criteria laid down in the relevant provisions of Decision 2014/512.
95 It is possible, on the basis of a combined reading of Article 3a of Decision 2014/512, the recitals of Decision 2014/659 and the information alongside the applicant’s name in Annex IV to Decision 2014/512 (see paragraph 18 above), to understand that it is in its capacity as a State-owned enterprise operating in the defence and armaments sector that the applicant’s name was included on the list of entities to which the restrictive measures apply in this case.
96 Given the political context at the time of the adoption of the restrictive measures concerned and the importance of the defence sector in the light of the objective of those measures, which is to increase the costs of the Russian Federation’s actions to undermine Ukraine’s territorial integrity, sovereignty and independence, and to promote a peaceful settlement of the crisis, the Council’s decision to impose restrictive measures on entities belonging to that sector can be readily understood in the light of the declared objective of those measures (see, to that effect and by analogy, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 124).
97 Likewise, the extension of those measures, by the contested decisions, could be readily understood in the light of the recitals of those decisions which recall that, on 19 March 2015, the European Council agreed that the necessary measures would be taken to clearly link the duration of the restrictive measures to the complete implementation of the Minsk agreements, the object of which was notably the implementation of a ceasefire in Ukraine.
98 Furthermore, it should be noted that the reasons underpinning the Council’s decision to target certain sectors and to impose some restrictive measures rather than others fall within its broad discretion in the field of the CFSP (see judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 113 and the case-law cited). The question whether such measures are compatible with the objectives of the CFSP and whether they are appropriate to and necessary for the attainment of those objectives relates more to the substantive examination of those measures (see paragraphs 114 to 149 below).
99 Accordingly, the first complaint must be rejected.
– The complaint alleging infringement of the rights of the defence and of the right to an effective judicial remedy
100 It must be borne in mind that respect for the rights of the defence and the right to effective judicial protection are fundamental rights, forming an integral part of the EU legal order, in the light of which the Courts of the European Union must ensure the review — which in principle should be a full review — of the lawfulness of all EU acts (see, to that effect, judgment of 24 May 2016, Good Luck Shipping v Council, T‑423/13 and T‑64/14, EU:T:2016:308, paragraphs 47 and 48 and the case-law cited).
101 Respect for the rights of the defence, which is expressly affirmed in Article 41(2)(a) of the Charter, includes during a procedure preceding the adoption of restrictive measures the right to be heard and the right to have access to the file, subject to legitimate interests in maintaining confidentiality (see, to that effect, judgments of 28 November 2013, Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 60, and of 15 June 2017, Kiselev v Council, T‑262/15, EU:T:2017:392, paragraph 139 and the case-law cited).
102 The right to effective judicial protection, which is affirmed in Article 47 of the Charter, requires that the person concerned must be able to ascertain the reasons upon which the decision taken in relation to him is based, either by reading the decision itself or by requesting and obtaining disclosure of those reasons, without prejudice to the power of the court having jurisdiction to require the authority concerned to disclose that information, so as to make it possible for him to defend his rights in the best possible conditions and to decide, with full knowledge of the relevant facts, whether there is any point in his applying to the court having jurisdiction, and in order to put the latter fully in a position to review the lawfulness of the decision in question (see judgment of 24 May 2016, Good Luck Shipping v Council, T‑423/13 and T‑64/14, EU:T:2016:308, paragraph 50 and the case-law cited).
103 When that disclosure takes place, the competent EU authority must ensure that that individual is placed in a position in which he may effectively make known his views on the grounds advanced against him (judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 112).
104 The applicant’s arguments must be examined in the light of those principles.
105 First, as regards the alleged failure by the Council to disclose the evidence substantiating the entry of the applicant’s name on the list in Annex IV to Decision 2014/512, it should be pointed out that the applicant seeks annulment of the contested decisions which, by extending the applicability of the relevant provisions of Decision 2014/512, maintained its name on the list of entities subject to restrictive measures in Annex IV to that decision.
106 As regards acts that maintained the applicant’s name on the list of entities subject to restrictive measures or that merely extended the applicability of those measures, it has been made clear in the case-law that, in the context of the adoption of a decision to maintain the name of a person or an entity on a list of persons or entities subject to restrictive measures, the Council had to respect the right of that person or entity to have communicated to itself the incriminating evidence against it and the right to be heard before the adoption of that decision where that institution was including new evidence against that person or entity, namely evidence which was not included in the initial listing decision (see, to that effect, judgments of 21 December 2011, France v People’s Mojahedin Organization of Iran, C‑27/09 P, EU:C:2011:853, paragraph 63, and of 18 June 2015, Ipatau v Council, C‑535/14 P, EU:C:2015:407, paragraph 26 and the case-law cited).
107 In the present case, the criteria applied in order to maintain the applicant’s name on the list in Annex IV to Decision 2014/512 are set out in Article 3a of Decision 2014/512 and have remained unchanged since they were introduced by Decision 2014/659. It is because of its status as a Russian enterprise operating in the defence sector that the applicant’s name was listed in Annex IV to Decision 2014/512.
108 Consequently, the Council was under no obligation to hear the applicant or to communicate to it the evidence relating to its decision to retain the applicant’s name on the list in Annex IV to Decision 2014/512 before the adoption of the contested decisions.
109 Secondly, in so far as the applicant submits that it did not immediately have access to the relevant documents concerning its listing, it must be noted that when sufficiently precise information has been communicated, enabling the person concerned to make known its point of view effectively on the evidence adduced against it by the Council, the principle of respect for the rights of the defence does not mean that that institution is obliged spontaneously to grant access to the documents in its file. It is only at the request of the party concerned that the Council is required to provide access to all non-confidential official documents concerning the measure at issue (see judgment of 14 October 2009, Bank Melli Iran v Council, T‑390/08, EU:T:2009:401, paragraph 97 and the case-law cited).
110 In the present case, it is clear that the Council complied with that obligation and replied, by letter of 31 July 2015, to the applicant’s request for information of 19 May 2015. In that context, the Council granted access to certain documents in its possession relating to its decision to impose restrictive measures on the applicant.
111 Consequently, in the absence of further evidence against the applicant after the initial entry of its name on the list in Annex IV to Decision 2014/512, it must be held that the communication of those documents was sufficient to enable the applicant to exercise its rights effectively and for its rights of defence to be respected.
112 Thirdly, in so far as the applicant disputes the relevance of the evidence communicated to it, since, according to the applicant, it does not establish its direct or indirect involvement in the actions to destabilise the situation in Ukraine, it should be noted that that argument is based on the false premiss that it was necessary to demonstrate that in this case. In any event, such an argument relates more to the substantive examination of the legality of the restrictive measures imposed by the relevant provisions of Decision 2014/512 (see the first and third pleas examined in paragraphs 117 to 149 below), and not to a complaint of infringement of procedural rights.
113 Accordingly, the complaint alleging infringement of the rights of the defence and of the right to effective judicial protection must also be rejected.
– The complaint alleging an unjustifiable infringement of the fundamental rights of the applicant
114 By its third complaint, the applicant claims, in essence, that the infringements of its fundamental rights attributable to the contested decisions are not proportionate, in the light of Article 52 of the Charter.
115 It must be noted that, as the Council contends, by those arguments, the applicant essentially reiterates the arguments it put forward in connection with the first plea, alleging breach of the principle of proportionality.
116 Reference must, therefore, be made to the examination of this plea in paragraphs 130 to 149 below.
The third plea in law, alleging a manifest error of assessment
117 By its third plea, the applicant maintains that it cannot be established from the criteria mentioned alongside its name in Annex IV to Decision 2014/512 that it is responsible in any way for the destabilisation of Ukraine or that it might be in a position successfully to influence the implementation of the Minsk agreements. Therefore, the Council made a manifest error of assessment by listing the applicant’s name in Annex IV to Decision 2014/512 and extending that listing by the adoption of the contested decisions.
118 First, the applicant submits that the Council was wrong to portray it as a company that is dependent on and directed by the Russian Federation. Although the Russian Federation is the sole shareholder, the applicant claims nonetheless to be an independent commercial enterprise.
119 Secondly, the applicant denies having supplied weapons that were delivered to separatists in eastern Ukraine in order to destabilise the situation in Ukraine.
120 Thirdly, it refers to the case-law of the General Court, according to which the imposition of sanctions must be taken on a sufficiently solid factual basis. Yet the evidence provided by the Council cannot be regarded as sufficient.
121 The Council disputes those arguments.
122 As a preliminary point, it should be stated that the applicant must be considered to be invoking an error of assessment, not a manifest error of assessment.
123 The effectiveness of the judicial review guaranteed by Article 47 of the Charter notably requires that the Courts of the European Union are to ensure that the decision by which restrictive measures were adopted or maintained, which affects the person or entity concerned individually, is taken on a sufficiently solid factual basis. That entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, is substantiated (judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 119).
124 Next, it should be recalled that, in the present case, the applicant’s name was listed in Annex IV to Decision 2014/512 not because of its links with the Russian Government or because of its direct or indirect responsibility with regard to the Russian Federation’s actions to destabilise the situation in Ukraine, but because of its status as a Russian enterprise operating in the field of defence and armaments (see paragraph 95 above), which the applicant does not dispute.
125 The applicant’s arguments contesting its direct or indirect involvement in the conflict in eastern Ukraine or its links with the Russian Government are therefore ineffective in that respect.
126 The objective of the restrictive measures concerned is not to penalise certain entities because of their links with the situation in Ukraine, but to impose economic sanctions on the Russian Federation, in order to increase the costs of its actions to undermine Ukraine’s territorial integrity, sovereignty and independence, and to promote a peaceful settlement of the crisis (see paragraph 96 above).
127 In that regard, it should be noted, as did the Council, that the reference to the fact that the applicant is a Russian State-owned enterprise is purely indicative and is not a prerequisite for adoption of the restrictive measures concerned. In so far as those measures cover a particular sector of the economy, because of its importance to the Russian economy or its connection with the Russian Federation’s actions to destabilise Ukraine, it is not required that the undertakings targeted should be Russian State-owned undertakings (see, to that effect, judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council, T‑255/15, not published, EU:T:2017:25, paragraph 135).
128 In any event, it is sufficiently clear from the evidence provided by the Council that the applicant is a Russian State-owned company and that it manufactures weaponry and military equipment which it supplies to the Russian army, which, in turn, supplies heavy weaponry to separatists in eastern Ukraine, contributing to the destabilisation of Ukraine (see, to that effect, judgment of 25 January 2017, Almaz-Antey Air and Space Defence v Council, T‑255/15, not published, EU:T:2017:25, paragraphs 129 to 143).
129 Accordingly, the Council did not make an error of assessment when it listed the applicant’s name in Annex IV to Decision 2014/512, and then extended that listing by the adoption of the contested decisions.
The first plea in law, alleging breach of the principle of proportionality
130 The applicant submits, by this plea, that the extension of the restrictive measures imposed by the contested decisions is incompatible with the principle of proportionality, as that principle has been affirmed by Article 5(4) TEU and the first paragraph of Article 296 TFEU. The listing of the applicant’s name cannot be regarded as a measure that is appropriate for the purpose of attaining the objective pursued by the Council, which is to prevent the further destabilisation of Ukraine and to implement the Minsk agreements.
131 As a result of the further restrictions arising from the adoption of Decision 2014/659, all the entities listed in Annex IV to Decision 2014/512 are prohibited from acquiring dual-use goods, even for non-military use, while the same prohibition, limited to military use, was already covered by Article 3 of Decision 2014/512.
132 Further, according to the applicant, the restrictive measures concerned go beyond what is necessary to attain their objective, since the Council did not verify that the applicant — directly or indirectly — contributed or still contributes to the destabilisation of Ukraine or that it had any influence on events in Ukraine. Nor did the Council demonstrate that the applicant supplied arms or ammunition — directly or indirectly — to separatists in eastern Ukraine. Lastly, the Council did not list all the companies operating in the defence sector, or all State-owned enterprises in Russia.
133 Therefore, the applicant argues, notwithstanding the Council’s margin of discretion, the restrictive measures imposed on the applicant by the contested decisions are disproportionate and should be annulled.
134 The Council disputes those arguments.
135 It should be noted in that regard that, according to Article 52(1) of the Charter, ‘any limitation on the exercise of the rights and freedoms recognised by [the] Charter must be provided for by law and respect the essence of those rights and freedoms’, and, moreover, ‘subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others’.
136 Consequently, in order to comply with EU law, a limitation on the exercise of the fundamental rights concerned must satisfy three conditions. First, the limitation must be provided for by law. In other words, the measure in question must have a legal basis. Secondly, the limitation must refer to an objective of general interest, recognised as such by the European Union. Thirdly, the limitation may not be excessive. It must be necessary and proportional to the aim sought, and the ‘essential content’, that is the substance, of the right or freedom at issue must not be impaired (see judgment of 30 November 2016, Rotenberg v Council, T‑720/14, EU:T:2016:689, paragraphs 170 to 173 and the case-law cited).
137 It is clear that those three conditions are met in the present case.
138 In the first place, the restrictive measures at issue are ‘provided for by law’, since they are set out in acts which are, in particular, of general application, have a clear legal basis in EU law and are sufficiently reasoned (see paragraphs 82 to 99 above). Furthermore, in the review of the third plea in law, it has been established that that statement of reasons was sufficient to support the conclusion that the retention of the applicant’s name on the list at issue was well founded (see paragraphs 124 to 129 above).
139 In the second place, it is apparent from recitals 1 to 8 of Decision 2014/512 that the stated objective of that decision is to increase the costs of the Russian Federation’s actions to undermine Ukraine’s territorial integrity, sovereignty and independence, and to promote a peaceful settlement of the crisis. Such an objective is consistent with the objective of maintaining peace and international security, in accordance with the objectives of the European Union’s external action set out in Article 21 TEU (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 115).
140 With regard, specifically, to the measures affecting the applicant that were imposed in the relevant provisions of Decision 2014/512, it must be recalled that these were added by Decision 2014/659, which states in recitals 4, 5 and 6 that, in view of the gravity of the situation in Ukraine, the Council considered it appropriate to take further restrictive measures in response to the Russian Federation’s actions destabilising the situation in Ukraine. In that context, the Council considered it appropriate to provide for additional restrictions on access to the capital market targeting, inter alia, certain Russian entities in the defence sector, and to prohibit the sale, supply or transfer of dual-use items to certain persons, entities or bodies established in Russia.
141 In the third place, with regard to the principle of proportionality, it should be noted that, as a general principle of EU law, this requires that measures adopted by the EU institutions do not exceed the limits of what is appropriate and necessary in order to attain the objectives pursued by the legislation in question. Consequently, when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (see judgment of 30 November 2016, Rotenberg v Council, T‑720/14, EU:T:2016:689, paragraph 178 and the case-law cited).
142 The case-law makes clear in that respect that, with regard to judicial review of compliance with the principle of proportionality, the EU legislature must be allowed a broad discretion in areas which involve political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Therefore, the legality of a measure adopted in those areas may be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue (see judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 146 and the case-law cited).
143 First, it is indeed the case that restrictive measures, by definition, have consequences which affect rights to property and the freedom to pursue a trade or business, thereby causing harm to persons who are in no way responsible for the situation which led to the adoption of the sanctions. That is a fortiori the case with respect to the consequences of targeted restrictive measures on the entities subject to those measures (see judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 149 and the case-law cited).
144 However, the importance of the objectives pursued by Decision 2014/512, namely the protection of Ukraine’s territorial integrity, sovereignty and independence, and the promotion of a peaceful settlement of the crisis in that country, the achievement of which is part of the wider objective of maintaining peace and international security, in accordance with the objectives of the Union’s external action set out in Article 21 TEU, is such as to justify the possibility that, for certain operators, which are in no way responsible for the situation which led to the adoption of the sanctions, the consequences may be negative, even significantly so (see, to that effect, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraphs 149 and 150 and the case-law cited).
145 Secondly, contrary to what is claimed by the applicant, there is a reasonable relationship between the restrictive measures concerned and the objective pursued by the Council in adopting them. In so far as that objective is, inter alia, to increase the costs to be borne by the Russian Federation for its actions to undermine Ukraine’s territorial integrity, sovereignty and independence, the approach of targeting Russian companies carrying on their business in the field of defence and armaments is consistent with that objective and cannot, in any event, be considered to be manifestly inappropriate with respect to the objective pursued (see, to that effect and by analogy, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 147).
146 Thirdly, it should be noted that the measures adopted by the Council in the present case are targeted economic sanctions, which cannot be regarded as a complete interruption of economic and financial relations with a third country, even though the Council has such a power under Article 215 TFEU.
147 In those circumstances, and having regard, in particular, to the fact that the restrictive measures adopted by the Council in reaction to the crisis in Ukraine have become progressively more severe, interference with the applicant’s freedom to conduct a business and its right to property cannot be considered to be disproportionate (see, to that effect, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 150).
148 Accordingly, the applicant is mistaken in its view that the Council should have chosen less restrictive measures in relation to the objective pursued, since those measures are specifically intended to put pressure on the Russian Federation and to increase the costs to be borne by the Russian Federation for its actions to undermine Ukraine’s territorial integrity, and it does not appear that the Council’s decision to target certain entities in the defence sector is manifestly inappropriate for the purpose of achieving that objective (see, to that effect and by analogy, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 147).
149 In the light of all these considerations, the first plea in law must be rejected, and the action dismissed in its entirety.
Costs
150 Under Article 134(1) 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 applicant has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the Council.
On those grounds,
THE GENERAL COURT (Sixth Chamber)
hereby:
1. Dismisses the action;
2. Orders Joint-Stock Company ‘Almaz-Antey’ Air and Space Defence Corp. to pay the costs.
Delivered in open court in Luxembourg on 13 September 2018.