Case T‑306/10

Hani El Sayyed Elsebai Yusef

v

European Commission

(Common foreign and security policy — Restrictive measures against persons and entities associated with Usama bin Laden, the Al Qaida network and the Taliban — 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)

Summary — Judgment of the General Court (Second Chamber), 21 March 2014

1.      Judicial proceedings — Actions for failure to act — Measures under Article 263 TFEU — Circumvention of the expiry of the period for bringing an action for annulment — Inadmissibility — Limits — Existence of substantial new facts — Concept of substantial new fact — Restrictive measures taken in the context of the common foreign and security policy

(Arts 263 TFEU and 265 TFEU; Council Regulation No 881/2002, Art. 7c)

2.      Common foreign and security policy — Restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaeda network and the Taliban — Decision to freeze funds — Right of addressees to apply for re-examination taking account of subsequent developments — Judicial review — Commission not acceding to such a request — Omission constituting failure to act

(Arts 263 TFEU and 265 TFEU; Council Regulation No 881/2002)

3.      EU law — Principles — Rights of defence — Right to effective judicial protection — Restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaeda network and the Taliban — Obligation to disclose individual and specific grounds for the decisions adopted — Obligation to enable the person concerned effectively to put forward his point of view on the grounds held against him

(Arts 220(1) TFEU and 296 TFEU; Council Regulation No 881/2002; Commission Regulation No 1629/2005)

1.      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.

In that regard, only the existence of substantial new facts may justify the submission of an application for re-examination of a decision not challenged within the time-limits. In the context of a fund-freezing measure under Regulation 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 Regulation No 467/2001, the judgment of the Court of Justice in Joined Cases C-402/05 P C-415/05 P 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, constitutes such a new fact. That judgment necessarily brought about a change of attitude and conduct on the part of the Commission, which in itself constitutes a new and substantial fact. Until that judgment was delivered, the Commission took the view, first, that it was strictly bound by the decisions of the Sanctions Committee of the UN Security Council, 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. By contrast, immediately after delivery of the judgment in Kadi I, 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.

A further new fact is constituted by the fact that the government of a Member State, which is at the same time a permanent member of the UN Security Council, having examined, in the context of national proceedings, the evidence on the basis of which the applicant’s name was included in the list of persons covered by those restrictive measures, had concluded, subsequently to that first adoption of position, 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 from that list.

(see paras 54, 55, 59, 60, 66, 69, 70, 72)

2.      In contrast to 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. 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. Therefore, 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. To accept a contrary argument 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.

Furthermore, first, Article 7c of Regulation No 881/2002, as amended by Regulation No 1286/2009, in its first three paragraphs, lays down a review procedure specifically in favour of persons who were included on the list of persons covered by those restrictive measures before 3 September 2008. 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, where the Commission fails to carry out the review provided for under Article 7c of Regulation No 881/2002.

(see paras 62, 63, 65, 68)

3.      An EU institution, 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.

Moreover, where the person concerned makes observations on the statement of reasons, 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.

Finally, compliance with defence rights and the right to effective judicial protection requires: first, that the competent EU authority 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; second, that it enable him effectively to make known his observations on that subject; and, third, that it 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.

It follows that, where the Commission relies in adopting such measures on a mere Sanctions Committee press release which does not contain any statement of reasons, where it is under an obligation to act with regard to the applicant and even if it takes the view that the imposition on the applicant of those restrictive measures is and remains 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 is in any case bound as soon as possible to remedy the infringement of the applicable principles in the context of the procedure followed on the adoption of those measures, failing which it is in the position of having failed to act. In that regard, it is irrelevant that the Commission has, in the meantime, initiated the review procedure, which is still underway.

(see paras 90, 92, 93, 95, 96, 98, 99, 101)