JUDGMENT OF THE GENERAL COURT (First Chamber)
6 September 2023 (*)
(Common foreign and security policy – Restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine – Freezing of funds – Inclusion of the applicant’s name on the lists of persons, entities and bodies concerned – Error of assessment – Concept of ‘association’ – Proportionality)
In Case T‑272/22,
Galina Evgenyevna Pumpyanskaya, residing in Ekaterinburg (Russia), represented by G. Lansky, P. Goeth, A. Egger and E. Steiner, lawyers,
applicant,
v
Council of the European Union, represented by S. Van Overmeire and B. Driessen, acting as Agents,
defendant,
THE GENERAL COURT (First Chamber),
composed of D. Spielmann, President, R. Mastroianni and T. Tóth (Rapporteur), Judges,
Registrar: M. Zwozdziak-Carbonne, Administrator,
having regard to the written part of the procedure,
further to the hearing on 25 April 2023,
gives the following
Judgment
1 By her action based on Article 263 TFEU, the applicant, Ms Galina Evgenyevna Pumpyanskaya, seeks annulment of Council Decision (CFSP) 2022/397 of 9 March 2022 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2022 L 80, p. 31; ‘the contested decision’), and of Council Implementing Regulation (EU) 2022/396 of 9 March 2022 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2022 L 80, p. 1; ‘the contested regulation’) (together, ‘the contested measures’), in so far as those measures include her name on the lists annexed thereto.
Background to the dispute
2 The applicant is a Russian national.
3 On 17 March 2014, the Council of the European Union 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).
4 On the same date, the Council adopted, on the basis of Article 215(2) 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).
5 On 23 February 2022, the Council adopted a first set of restrictive measures prohibiting, inter alia, the financing of the Russian Federation, its government and its central bank.
6 On 24 February 2022, the President of the Russian Federation announced a military operation in Ukraine and, on the same day, Russian armed forces launched attacks on Ukraine in a number of places in the country.
7 On 25 February 2022, the Council adopted a second set of restrictive measures applicable, inter alia, to the fields of finance, defence and energy, to the aviation sector and to the space industry.
8 On the same date, in view of the gravity of the situation in Ukraine, the Council adopted, first, Decision (CFSP) 2022/329 amending Decision 2014/145/CFSP (OJ 2022 L 50, p. 1) and, second, Regulation (EU) 2022/330 amending Regulation (EU) No 269/2014 (OJ 2022 L 51, p. 1), in order, inter alia, to amend the criteria according to which natural or legal persons, entities or bodies could be subject to the restrictive measures at issue. According to recital 11 of Decision 2022/329, the Council considered that the criteria of designation should be amended to include persons and entities supporting and benefitting from the Government of the Russian Federation as well as persons and entities providing a substantial source of revenue to it, and natural or legal persons associated with listed persons or entities.
9 Article 2(1) and (2) of Decision 2014/145, as amended by Decision 2022/329 (‘Decision 2014/145, as amended’), is worded as follows:
‘1. All funds and economic resources belonging to, or owned, held or controlled by:
…
(g) leading businesspersons or legal persons, entities or bodies involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine,
and natural or legal persons, entities or bodies associated with them, as listed in the Annex, shall be frozen.
2. No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of natural or legal persons, entities or bodies listed in the Annex.’
10 The detailed rules governing that freezing of funds are laid down in the subsequent paragraphs of that article.
11 Article 1(1)(e) of Decision 2014/145, as amended, prohibits the entry into or transit through the territories of the Member States by natural persons who meet criteria which are substantially identical to those set out in Article 2(1)(g) of that decision.
12 Regulation No 269/2014, as amended by Regulation 2022/330 (‘Regulation No 269/2014, as amended’), requires measures to be adopted for the freezing of funds and lays down the detailed rules governing that freezing in terms which are identical, in essence, to those of Decision 2014/145, as amended. Article 3(1)(g) of that regulation largely reproduces Article 2(1)(g) of that decision.
13 In that context, on 9 March 2022, the Council adopted, on the basis of Article 29 TEU, the contested decision and, on the basis of Article 215 TFEU, the contested regulation.
14 By the contested measures, the applicant’s name was added to the list annexed to Decision 2014/145, as amended, and to the list in Annex I to Regulation No 269/2014, as amended (‘the lists at issue’), on the following grounds:
‘[The applicant] is the Chairwoman of the Board of trustees of BF “Sinara”, a foundation that acts as operator of charitable activities of large companies, including PJSC Pipe Metallurgical Company. She is the spouse of Dmitry Alexandrovich Pumpyanskiy, Chairman of the Board of Directors of PJSC Pipe Metallurgical Company, a Russian global manufacturer of steel pipes for the oil and gas industry. Dmitry A. Pumpyanskiy is a Russian billionaire businessman. He is also a President and board member of Group Sinara. Both companies support and benefit from cooperation with authorities of Russian Federation and State-owned companies, including Russian Railways, Gazprom and Rosneft.
Galina Evgenyevna Pumpyanskaya is therefore a natural person associated with a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine.’
15 The Council published a notice for the attention of the persons subject to the restrictive measures provided for in the contested measures in the Official Journal of the European Union of 10 March 2022 (OJ 2022 C 114 I, p. 1). That notice stated, inter alia, that the persons concerned could submit a request to the Council, together with supporting documentation, that the decision to include their names on the lists annexed to the contested measures be reconsidered.
16 By email of 19 April 2022, the applicant requested access to all the documents produced and held by the Council and the European External Action Service (EEAS), which had served as the basis for the adoption of the restrictive measures concerning her, with a view to preparing a request that the decision be reconsidered.
17 By letter of 28 April 2022, the Council replied to the applicant’s request referred to in paragraph 16 above and sent the information in the file with the reference WK 3054/2022, dated 8 March 2022 (‘the WK file’).
Forms of order sought
18 The applicant claims that the Court should:
– annul the contested measures;
– order the Council to pay the costs.
19 The Council contends that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
I. Law
A. The application for joinder
20 At the hearing, the Council requested that the present case be joined with Case T‑270/22, Pumpyanskiy v Council, for the purposes of the decision that closes the proceedings. The applicant opposed that request, formal note of which was taken in the minutes of the hearing.
21 In that regard, it should be noted that such a request had already been made by the Council by a separate document lodged at the Court Registry on 8 February 2023. By decision of 10 March 2023, the President of the First Chamber decided, after hearing the parties, to join the present case with Case T‑270/22, Pumpyanskiy v Council, solely for the purposes of the oral part of the procedure.
22 In view of the circumstances in the present instance, the Court considers that the present case still does not lend itself to being joined with Case T‑270/22, Pumpyanskiy v Council, for the purposes of the decision that closes the proceedings.
23 The Council’s request for joinder made at the hearing is therefore refused.
B. Substance
24 In support of the action, the applicant relies on two pleas in law, alleging, first, an error of assessment and, second, failure to observe the proportionality principle and infringement of fundamental rights.
1. First plea in law, alleging an error of assessment
25 In essence, the applicant acknowledges that, despite the material divergence between the contested measures and the WK file, it is apparent from the statement of reasons for those measures that the Council applied to her the listing criterion relating to ‘leading businesspersons … involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine [and] natural or legal persons … associated with them’ (criterion provided for in Article 2(1)(g) of Decision 2014/145, as amended, in Article 3(1)(g) of Regulation No 269/2014, as amended, and, in essence, Article 1(1)(e) of Decision 2014/145, as amended; ‘the (g) criterion’).
26 However, she contests the validity of including her name on the lists at issue on the basis of the (g) criterion on the ground that she cannot be regarded as being ‘associated’ with her husband.
27 The Council disputes the merits of that plea.
(a) Preliminary observations
28 It must be recalled that, in accordance with settled case-law, the Council has a degree of discretion to determine on a case-by-case basis whether the legal criteria on which the restrictive measures at issue are based are met. However, the EU Courts must ensure the review, in principle the full review, of the lawfulness of all Union acts in the light of the fundamental rights forming an integral part of the EU legal order (see judgment of 3 July 2014, National Iranian Tanker Company v Council, T‑565/12, EU:T:2014:608, paragraphs 54 and 55 and the case-law cited).
29 The effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’) requires, in particular, that the EU Courts ensure that the decision by which restrictive measures were adopted or maintained, which assumes individual scope for the person or entity concerned, has a sufficiently solid factual basis. That involves assessing the facts alleged in the statement of reasons on which the decision is based, 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 (judgments of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 119, and of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraph 128).
30 Such an assessment must be carried out by examining the evidence and information not in isolation but in its context. The Council discharges the burden of proof borne by it if it presents to the EU Courts a set of indicia sufficiently specific, precise and consistent to establish that there is a sufficient link between the person subject to a measure freezing his, her or its funds and the regime or, in general, the situations, being combated (see judgment of 20 July 2017, Badica and Kardiam v Council, T‑619/15, EU:T:2017:532, paragraph 99 and the case-law cited).
31 It is the task of the competent EU authority to establish, in the event of challenge, that the reasons relied on against the person concerned are well founded, and not the task of that person to adduce evidence of the negative, that those reasons are not well founded. It is nevertheless necessary that the information or evidence produced should support the reasons relied on against the person concerned (judgments of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraphs 121 and 122, and of 3 July 2014, National Iranian Tanker Company v Council, T‑565/12, EU:T:2014:608, paragraph 57).
32 It is in the light of those rules from case-law that the substance of the applicant’s arguments must be examined.
(b) The evidence adduced by the Council
33 In the present case, the Council provided the WK file containing 14 items of evidence in order to justify including the applicant’s name on the lists at issue. It should be noted that this is publicly available information, namely:
– an extract from the Twitter account of a journalist from February 2022 (Exhibit 1);
– information relating to the applicant on the website ‘tadviser.com’ from February 2022 (Exhibit 2);
– articles from Novaya Gazeta from February 2018 (Exhibit 10), play the game from June 2018 (Exhibit 12), Svoboda from February 2020 (Exhibit 11), Moscow Post from April 2020 (Exhibit 5), Ura News from March 2021 (Exhibit 13), Forbes from April 2021 (Exhibit 7), Rogtec magazine from June 2021 (Exhibit 4) and February 2022 (Exhibit 3), and from the information website for the city of Taganrog (Russia) from October 2021 (Exhibit 14);
– pages taken from the official website of PJSC Pipe Metallurgical Company (‘TMK’) from December 2021 (Exhibit 9) and from the Financial Times from February 2022 (Exhibit 6);
– information relating to Mr Dmitry Alexandrovich Pumpyanskiy on the website ‘wikipedia.org’ from July 2014 (Exhibit 8).
(c) The reliability of the evidence submitted by the Council
34 The applicant calls into question the reliability of the evidence on which the Council has relied. In essence, she alleges that it is an incoherent collection of press articles and websites of low quality, only one of which mentions the applicant. Such a collection does not prove that the Council carried out a detailed examination of the probative value and content of the evidence. In the reply, the applicant adds that, since the Council claims that the WK file is a document from the EEAS, it could be concluded that there is, strictly speaking, no Council document and that the Council has therefore not provided any evidence. She also observes that the EU Courts have previously, first, rejected press articles on the basis that they have insufficient probative value because they are inaccurate and confusing, and, second, held that an extract from an online newspaper had to be corroborated by other evidence.
35 In that regard, it should be noted that, in accordance with settled case-law, the activity of the Court of Justice and the General Court is governed by the principle of the unfettered evaluation of evidence and it is only the reliability of the evidence before the Court which is decisive when it comes to the assessment of its value. In addition, in order to assess the probative value of a document, it is necessary to determine the credibility of the account it contains and to have regard, in particular, to the person from whom the document originates, the circumstances in which it came into being, the person to whom it was addressed and whether, on its face, the document appears to be sound and reliable (see, to that effect, judgment of 27 September 2012, Shell Petroleum and Others v Commission, T‑343/06, EU:T:2012:478, paragraph 161 and the case-law cited).
36 Furthermore, the Court notes that, in the absence of investigative powers in third countries, the assessment of the EU authorities must rely on publicly available sources of information, reports, articles in the press or other similar sources of information (see judgment of 12 February 2020, Kibelisa Ngambasai v Council, T‑169/18, not published, EU:T:2020:58, paragraph 96 and the case-law cited).
37 In the first place, the applicant’s assertion that, in essence, the Council can be regarded as having adduced no evidence since the WK file emanates from the EEAS and not from the Council itself must be rejected. There is no basis for that assertion either in the EU legislation in force or in the case-law of the EU Courts. On the contrary, in the light of the case-law referred to in paragraphs 35 and 36 above, it must be held, first, that the Council is under no obligation itself to gather the evidence and, second, that that evidence may emanate from various sources, provided that it can be considered sound and reliable.
38 In the second place, contrary to what the applicant claims, the Council did not rely on an incoherent collection of press articles and websites of low quality. It produced, inter alia, screenshots from the website of TMK itself (Exhibit 9) and from the information website for the city of Taganrog (Exhibit 14). Furthermore, as regards the reliability of the evidence adduced by the Council, it should be noted that the press articles come from digital information sources of various origins, not only local, such as The Moscow Post, Novaya Gazeta, Svoboda or Rogtec magazine, but also foreign, such as The Financial Times, which is a newspaper whose quality and reliability cannot be called into question. In addition, the Council produced a page reporting information without any journalistic assessment from the website of TMK. It should also be noted that those different sources relay pieces of information that corroborate each other. The applicant’s argument must therefore be rejected.
39 In the third place, the Court must reject the applicant’s argument that, in essence, only 1 item of evidence out of the 14 adduced in the WK file relates to her, which, she claims, demonstrates the low quality of the WK file and the fact that it does not constitute a sufficient factual basis. As the Council has pointed out, what matters is not the number of items of evidence or pages devoted to the demonstration of a fact, but rather the probative value of that evidence or those pages in question and their capacity to substantiate the grounds relied on against the person concerned.
40 Thus, in the light of the foregoing, and in the absence of any evidence in the file capable of calling into question the reliability of the sources used by the Council, they must be regarded as sound and reliable, within the meaning of the case-law referred to in paragraph 35 above.
41 Consequently, it is necessary to examine the applicant’s arguments disputing the merits of including her name on the lists at issue.
(d) The application to the applicant of the (g) criterion
(1) The scope of the (g) criterion
42 The Court observes that, in the present case, for that criterion to be met it is necessary to establish, first, the existence of an ‘association’ with a leading businessperson and, second, that that leading businessperson is active in ‘economic sectors providing a substantial source of revenue to the Government of the Russian Federation’.
43 The ground relied on with regard to the applicant vis-à-vis the (g) criterion concerns the fact that she is ‘associated’ with a leading businessperson – her husband, in this instance – involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, through his functions within TMK and the Sinara Group.
44 The applicant disputes that ground for listing. In essence, first, she submits that, since she is not involved in her husband’s business activities, she is unable to make submissions on whether her husband is a leading businessperson within the meaning of the (g) criterion. Nevertheless, since she is convinced that the Council has erred in its assessment by including her husband’s name on the lists at issue, she has attached her husband’s application in Case T‑270/22 and states that she disputes all claims made in respect of her husband and endorses the arguments set out in that application. Second, the applicant submits that she cannot be regarded as being ‘associated’ with him since neither the family relationship nor her role as chairwoman of a charitable organisation is sufficient in that regard. Third, she refers to her husband’s application in Case T‑270/22 and observes that he was no longer linked in any way whatsoever to TMK and to the Sinara Group at the time of the adoption of the measures by which he was included on the lists at issue. Fourth, the applicant states, in essence, that the Council cannot base its claims relating to the (g) criterion on the documents provided in the WK file, since no document in that file satisfies the requirements of the burden of proof incumbent on the Council.
45 The Council maintains, in essence, that it is apparent from the evidence in the WK file that the ground relied on with regard to the applicant satisfies the (g) criterion. At the hearing, the Council added, referring to information contained in the annexes to the files in Cases T‑270/22, Pumpyanskiy v Council, and T‑740/22, Pumpyanskiy v Council, that the applicant was also a shareholder in the Sinara Group.
46 In that regard, the Court notes at the outset that the ground for listing by which the Council concluded that there was an association between herself and her husband is not limited exclusively to their family relationship, but also relates to their business relationship. As is clear from both the contested decision and the WK file, it was because of her husband’s position within TMK and the Sinara Group and because of her role as chairwoman of the BF Sinara Foundation’s Board of Trustees, a foundation which carries out the charitable activities of large companies, including TMK, that the Council concluded that she was associated with her husband. Moreover, it is clear from the line of argument put forward in the application that the applicant has grasped that it was alleged that there was a business relationship since she has endeavoured to challenge the merits of that allegation.
47 It is appropriate to add that, without it being necessary to rule on the admissibility of the Council’s argument based on the annexes to Cases T‑270/22 and T‑740/22, the Council’s argument that the applicant was a shareholder in the Sinara Group is irrelevant for the purposes of examining the legality of the contested measures. Suffice it to note, in that regard, that the allegation that the applicant holds such shares is not in any way contained in the grounds for those measures.
48 That said, it is at this stage necessary to ascertain whether all the evidence adduced by the Council discharges the burden of proof borne by it, in accordance with the case-law referred to in paragraph 30 above, and thus constitutes a set of indicia that is sufficiently specific, precise and consistent to substantiate the ground for including the applicant’s name on the lists at issue.
(2) The classification of the applicant’s husband as a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation
49 In that regard, without there being any need to rule on the admissibility of the reference to the application of the applicant’s husband in Case T‑270/22, the Court holds that the Council has adduced, in the present case, a set of sufficiently specific, precise and consistent indicia which is capable of demonstrating that the applicant’s husband was a leading businessperson within the meaning of the (g) criterion. That is also apparent from today’s judgment in Pumpyanskiy v Council (T‑270/22, not published).
50 TMK and the Sinara Group, two companies founded by the applicant’s husband, are major players in many economic sectors, in particular in the energy, transport and construction sectors, and both have business relations with several State-owned companies. It is also common ground that, at least until 9 March 2022, the applicant’s husband was chairman of TMK’s board of directors and President and member of the Sinara Group’s board of directors.
51 It is apparent from Exhibits 3, 4, 7 and 10 that TMK is a worldwide producer of steel pipes in several sectors, that it mainly supplies those pipes to the oil and gas industry, in particular to Rosneft and Gazprom, and that it concluded cooperation agreements with those State-owned companies, in particular for the development of new products. In addition, the page taken from the Financial Times (Exhibit 6) states that TMK had a net income of 1.95 billion Russian roubles in 2021 and employs more than 39 000 people.
52 As regards the Sinara Group, Exhibit 4 describes its participation in the international economic forum organised in Saint Petersburg (Russia) in 2021 during which it signed several agreements with State-owned companies concerning the financing and implementation of major transport infrastructure development projects. Reference is made, in particular, to agreements of intent with Russian Railways, an agreement to finance the project to modernise the Taganrog tram network with the State-owned company VEB.RF, and a contract concluded between a subsidiary of Rosneft and a subsidiary of the Sinara Group. Furthermore, that same document refers to meetings organised during that forum between the management of the Sinara Group and the managers of a number of Russian regions, as well as large companies in the energy and machine-building sectors in the Russian Federation.
53 As regards Exhibits 4, 10 and 14, they confirm that the Sinara Group entered into business relations with State companies and that it has a significant presence in several sectors, such as the mass production of electric locomotives, the development of transport infrastructure or the development of nanotechnologies.
54 Therefore, having regard, first, to the applicant’s husband’s position within TMK and the Sinara Group and, second, to the numerous business sectors of those two companies, namely oil, gas, railway machinery, the financial sector and the construction sector, the Court finds that the applicant’s husband is a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.
55 It is true that neither Decision 2014/145, as amended, nor Regulation No 269/2014, as amended, defines that concept of a ‘substantial source of revenue’. It should be noted, however, that the use of the adjective ‘substantial’, which qualifies the nominal group ‘source of revenue’, implies that that source of revenue must be significant and therefore not negligible. Similarly, the Council has not provided figures for the revenue obtained for that government. However, in addition to the tax revenue which those two companies necessarily generate by virtue of their very large size and by their position in the Russian Federation, it is undeniable that the business sectors in which they are involved provide, directly or at least indirectly, a substantial source of revenue for the Government of the Russian Federation. That is the case, in particular, for the oil and gas sectors, since TMK plays a major role in the oil and gas industry as a company specialising in the production of steel pipes in those sectors. First, there are two specific sectors of the Russian economy, including the large State-owned companies Gazprom and Rosneft with which TMK has concluded business agreements and which benefit from TMK’s know-how to develop their business. Second, those two sectors occupy a particularly important position and in themselves necessarily represent substantial sources of revenue for the Government of the Russian Federation.
56 It must therefore be concluded that the Council has adduced a set of sufficiently specific, precise and consistent indicia capable of demonstrating that the applicant’s husband was a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.
57 That conclusion cannot be called into question by the applicant’s argument that, in essence, her husband was no longer linked in any way to TMK and to the Sinara Group on the date of adoption of the measures by which he was included on the lists at issue. Even if, by that argument, the applicant is seeking to claim that her husband had resigned from his duties within those two companies or that he had transferred the shares he held in those same companies at the time when those measures were adopted, such an argument cannot succeed.
58 In that regard, the Court notes that, according to settled case-law, the legality of an EU measure must be assessed on the basis of the facts and the law as they stood at the time when the measure was adopted (judgments of 14 April 2021, Al-Tarazi v Council, T‑260/19, not published, EU:T:2021:187, paragraph 69, and of 16 March 2022, Sabra v Council, T‑249/20, EU:T:2022:140, paragraph 49).
59 The argument based on the resignation of her husband must be rejected. Suffice it to note that, at least until the date of adoption of the contested measures, the applicant’s husband was chairman of TMK’s board of directors and President and member of the Sinara Group’s board of directors. Even if that resignation by her husband were established, it would not therefore predate the adoption of the measures by which he was included on the lists at issue or the adoption of the contested measures. Consequently, in accordance with the case-law cited in paragraph 58 above and, as the Council reiterated at the hearing, the resignation of the applicant’s husband cannot be taken into consideration in the present action in so far as it seeks the annulment of the contested measures.
60 The argument based on the transfer of the applicant’s husband’s shares must also be rejected. Irrespective of whether her husband actually transferred his shares in TMK and the Sinara Group, the Court notes that it was because of his position within TMK and the Sinara Group that the Council concluded that the applicant’s husband was a leading businessperson within the meaning of the (g) criterion and not because of his status as a shareholder in those two companies. Therefore, even if her husband had actually transferred his shares, that would have no effect on the legality of the contested measures.
61 In order to ascertain whether the ground relied on with regard to the applicant satisfies the (g) criterion, it is therefore now necessary to examine whether the applicant could be regarded as being associated with her husband.
(3) The applicant’s association with her husband
62 It should be noted at the outset that the applicant claims that the Council misinterpreted the concept of ‘association’ since, according to her, that concept requires the existence of a relationship by means of a mutual economic and political activity.
63 Such an argument cannot succeed. It is true that, although that concept is often used in Council documents relating to restrictive measures, it is not as such defined and its meaning is contingent on the context and circumstances at issue. However, the fact remains that it can be regarded as covering natural or legal persons who are generally connected by common interests, without, however, it being necessary for there to be a relationship by means of an economic activity, but which cannot, nevertheless, be based exclusively on a family relationship (see, to that effect, judgment of 8 March 2023, Prigozhina v Council, T‑212/22, not published, EU:T:2023:104, paragraphs 93 and 103 and the case-law cited). The concept of association provided for by the relevant provisions of Decision 2014/145, as amended, and of Regulation No 269/2014, as amended, can therefore be interpreted as covering any natural or legal person or any entity connected, as defined above, with, in the relevant case, a leading businessperson or entity involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.
64 In the present case, the Court notes that it is apparent from the ground for including the applicant’s name on the lists at issue and from the WK file as well as from the parties’ written pleadings that the Council concluded that the applicant was connected to her husband because of their family relationship and a business relationship in view of their respective positions within TMK, the Sinara Group and the BF Sinara Foundation. (see paragraph 46 above).
65 As regards the family relationship, the Court notes that the applicant is married to Mr Dmitry Alexandrovich Pumpyanskiy, as she acknowledges in the application and as is apparent from the information on the website ‘tadviser.com’ (Exhibit 2).
66 As regards the business relationship, the following should be taken into account.
67 First, the applicant does not dispute that, at least until 9 March 2022, her husband was chairman of TMK’s board of directors and President and member of the Sinara Group’s board of directors.
68 Second, as regards the applicant, it is common ground between the parties that, at the very least on the date on which the contested measures were adopted, she was chairwoman of the BF Sinara Foundation’s Board of Trustees. That piece of information was confirmed by the applicant itself in the application and at the hearing, and, moreover, it is on the website ‘tadviser.com’ (Exhibit 2), the content of which she does not dispute.
69 Third, as regards the activities and importance of the BF Sinara foundation, the applicant acknowledges that that foundation carries out the charitable activities of large companies, including TMK, and acts as the uniform operator of the largest companies in the Urals. She states, first of all, that that foundation carries out significant long-term social programmes in the fields of healthcare, education, culture and sport and that it also participates in major programmes in the field of intrasectoral cooperation and coordinates, to that end, more than 20 social programmes. Next, she states that, since 2017, that foundation has supported the major project of the Ural Industrial Biennial of Contemporary Art, one of the largest regular international projects in that field in the Russian Federation. Lastly, she notes that, since March 2020, that foundation has been carrying out the ‘Stop coronavirus’ fundraising project, which is aimed at supporting medical institutions and non-governmental organisations providing assistance to lonely elderly people. Thanks to the funds collected, equipment was provided to 51 medical establishments in 23 cities.
70 It therefore follows from paragraphs 67 to 69 above, as the Council correctly submits, that the applicant acts as chairwoman of the Board of Trustees of a foundation which occupies a major position in the Russian Federation, and which is closely linked to TMK and the Sinara Group, since it carries out their charitable activities. It is apparent that those two companies were created by her husband and that the latter was, at the very least until 9 March 2022, chairman of TMK’s board of directors and President and member of the board of directors of the Sinara Group. It must therefore be concluded that, although it is true that the applicant does not hold a position directly within TMK or the Sinara Group, she and her husband are connected by common interests going beyond a family relationship, since she holds positions in the BF Sinara foundation, which is responsible for managing the charitable activities of those two companies and the importance of which cannot be denied.
71 In the light of the foregoing, it must be concluded that the Council has adduced a set of indicia that are sufficiently specific, precise and consistent to demonstrate that the applicant is associated with a leading businessperson, in this case her husband, on account both of their family relationship and of the business relationship between them.
72 That finding cannot be called into question by the arguments put forward by the applicant.
73 In the first place, she claims that a distinction should be drawn between ‘related’ persons, which refers to a family relationship, and ‘associated’ persons, which refers to the structure of a company. In the present case, even if her husband could be classified as a leading businessperson within the meaning of the (g) criterion, she submits that the Council could not therefore rely solely on their family relationship in order to apply the (g) criterion to her.
74 As regards the distinction between ‘related’ persons and ‘associated’ persons, even if it were necessary to distinguish between the two terms, in so far as a ‘relationship’ applies rather to the family relationship and the criterion of ‘association’ to an economic relationship, in particular through companies, that distinction is, in the present case, ineffective. The Court notes that it is apparent from the ground for including the applicant’s name on the lists at issue and from the WK file as well as from the parties’ written pleadings that the Council concluded that the applicant was connected to her husband because of their family relationship and in view of their respective positions within TMK, the Sinara Group and the BF Sinara Foundation (see paragraph 46 above).
75 Since the statement of reasons used in the present case in order to apply the restrictive measures to the applicant does not relate solely to the fact that she is the wife of Mr Dmitry Alexandrovich Pumpyanskiy, but also results from a combination of factors which enabled it to be established that the applicant is associated with her husband, and in particular the fact that she is ‘associated’ with him through the BF Sinara foundation, the applicant’s argument based on the alleged need for a distinction between being ‘related’ to a person and being ‘associated’ with that person must be rejected.
76 The argument that the Council could not rely solely on the applicant’s family relationship with her husband in order to apply the (g) criterion to her must be rejected for the same reasons as those set out in paragraph 75 above.
77 In the second place, the applicant submits that her position as chairwoman of the BF Sinara foundation cannot be classified as an ‘association’ within the meaning of the (g) criterion. In essence, she states that that position is primarily an honorary volunteer position, which does not allow her to control the affairs of that foundation. Her role consists solely of supervising certain activities in support of artists, children, the elderly and people in ill health carried out by that foundation; this, she argues, in no way substantiates a ground for including her on the lists at issue.
78 That line of argument, however, cannot succeed. It is sufficient to note that the applicant was not included on the lists at issue on the ground that she was a leading businessperson on account of her position within the foundation, but solely on the ground that she is ‘associated’, within the meaning of the (g) criterion, with a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, on account of her family and business relationship with her husband. Therefore, any line of argument seeking to show that she does not control the BF Sinara foundation is irrelevant for the purposes of determining whether she can be classified as a natural person ‘associated’ with her husband.
79 In the third place, in the reply, the applicant claims that, by arguing that her reference to the application lodged by her husband in Case T‑270/22 is inadmissible, the Council’s conduct is abusive and amounts to discrimination based on gender. She claims that there is no doubt that, if she had sought to obtain information from her husband and to endorse her husband’s arguments, rather than annex her husband’s application, the Council would have regarded that as evidence of her alleged association with her husband. She adds that the Council has shown a certain level of disregard for her identity, since the Council goes so far as to use, in its defence in the present case, parts of its defence in Case T‑270/22 concerning her husband, without even adapting the arguments to the applicant’s identity and sex.
80 In that regard, it is sufficient to note that, by her line of argument, the applicant seeks to criticise the Council’s conduct in the present proceedings and not the legality of the contested measures. Accordingly, that line of argument must be rejected as ineffective for the purposes of assessing the legality of those measures.
81 Lastly, in the fourth place, the applicant claims that, in view of the very basic and generic nature of the supporting documents in the WK file, the statement of reasons for the contested measures is insufficient. Furthermore, the applicant adds that the Council clearly failed to identify the individual, specific and concrete reasons justifying the imposition of restrictive measures on her.
82 In that regard, it is apparent from paragraph 40 above that the evidence relied on by the Council to include the applicant’s name on the lists at issue is sound and reliable. Furthermore, contrary to what the applicant claims, the Court notes that the specific and concrete reasons which led the Council to include the applicant’s name on the lists at issue are set out in a sufficiently clear manner to enable the applicant to understand them. That is, moreover, fully confirmed by the pleas and arguments raised by the applicant in her pleadings, from which it is apparent, first, that she was put in a position to ascertain the justifications for the measures taken against her so that she could effectively challenge them before the EU Courts and, second, that the context of those measures was known to her.
83 It must be concluded from the above that the statement of reasons on which the contested measures are based is comprehensible and sufficiently precise to enable the applicant to ascertain the reasons which led the Council to conclude that including her name on the lists at issue was justified and to challenge the legality of it before the EU Courts, and to enable the latter to exercise their power of review. She cannot therefore reasonably claim that the statement of reasons for the contested measures is insufficient or inaccurate.
84 Consequently, in the light of all the foregoing, it must be held that the ground for including the applicant’s name on the lists at issue on account of her association with her husband is sufficiently substantiated, with the result that, in the light of the (g) criterion, that inclusion is well founded.
85 Therefore, the first plea in law must be rejected as unfounded.
2. The second plea in law, alleging a failure to observe the principle of proportionality and an infringement of fundamental rights
86 In support of that plea, which is subdivided into two parts, the applicant submits, first, that the inclusion of her name on the lists at issue constitutes an unjustified, arbitrary and disproportionate limitation of her fundamental rights, which include, inter alia, the right to respect for private and family life, home and communications and the right to property. She adds that, since she has never had any nexus with the Kremlin elite or TMK, and since her husband divested himself of his shares in TMK and the Sinara Group, sanctioning her does not contribute in any way to the achievement of the objectives of Regulation No 269/2014, as amended, which is to exert pressure on the Russian authorities. In the reply, she claims that, on the contrary, the effect of the restrictive measures adopted is beneficial to the Russian Government because of the forced return to the Russian Federation of many businesspersons and persons associated with them. Maintaining those restrictive measures against her is therefore neither necessary nor appropriate.
87 Second, the applicant claims, in essence, that the ground relied on against her relating to the (g) criterion disregards the principles of legal certainty and equal treatment. The lack of precision of the words ‘associated with’ or the mere reference to the criterion of ‘association’ confers an arbitrary discretion on the Council. According to the applicant, this is clear from the fact that, of the 1 110 people currently listed under Regulation No 269/2014, as amended, only two are spouses of listed persons.
88 The Council disputes the merits of that plea.
(a) Failure to observe the principle of proportionality and infringement of fundamental rights
89 It should be borne in mind that the right to property is among the general principles of EU law and is enshrined in Article 17 of the Charter. The right to respect for private and family life, home and communications is enshrined in Article 7 of the Charter.
90 In the present case, the restrictive measures at issue are precautionary measures which are not supposed to deprive those persons of their property, or of their right to respect for their private and family life, home or communications. However, they undeniably entail a restriction of the exercise of the applicant’s right to property, and adversely affect the applicant’s private and family life, home and communications (see, to that effect and by analogy, judgment of 12 March 2014, Al Assad v Council, T‑202/12, EU:T:2014:113, paragraph 115 and the case-law cited).
91 Nevertheless, it has consistently been held that in EU law those fundamental rights do not have absolute protection, but must be viewed in relation to their function in society (see judgment of 12 March 2014, Al Assad v Council, T‑202/12, EU:T:2014:113, paragraph 113 and the case-law cited).
92 In that regard, the Court recalls that, under 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 ‘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’.
93 Consequently, in order to comply with EU law, a limitation on the exercise of the fundamental rights at issue must satisfy four conditions. First, it must be ‘provided for by law’, in the sense that the EU institution adopting measures liable to restrict a natural or legal person’s fundamental rights must have a legal basis for its actions. Second, the limitation in question must respect the essence of those rights. Third, the limitation must refer to an objective of general interest, recognised as such by the European Union. Fourth, the limitation at issue must be proportionate (see, to that effect, judgments of 15 June 2017, Kiselev v Council, T‑262/15, EU:T:2017:392, paragraphs 69 and 84 and the case-law cited, and of 13 September 2018, VTB Bank v Council, T‑734/14, not published, EU:T:2018:542, paragraph 140 and the case-law cited).
94 In the present case, those four conditions are satisfied, contrary to what the applicant claims.
95 In the first place, the restrictive measures at issue which the contested measures entail for the applicant are ‘provided for by law’, since they are set out in acts of general application with a clear legal basis in EU law (see, by analogy, judgment of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraph 176 and the case-law cited). Moreover, in the context of the examination of the first plea in law, it has been established that all the evidence submitted by the Council satisfies the burden of proof incumbent upon it and made it possible for the applicant’s name to be entered on the lists at issue legitimately (see paragraphs 33 to 84 above).
96 In the second place, as regards the question whether the limitation at issue respects the ‘essence’ of those fundamental rights, it must be held that the restrictive measures imposed are limited in time and are reversible (see, to that effect, judgment of 14 July 2021, Oblitas Ruzza v Council, T‑551/18, not published, EU:T:2021:453, paragraph 96 and the case-law cited).
97 First of all, under Article 6 of Decision 2014/145, as amended, the lists at issue are to be periodically reviewed so that persons and entities which no longer meet the necessary criteria are removed from them.
98 Further, it must be borne in mind that Article 2(3) and (4) of Decision 2014/145, as amended, and Article 4(1), Article 5(1) and Article 6(1) of Regulation No 269/2014, as amended, provide for the possibility of authorising the use of frozen funds in order to meet basic needs or to meet certain commitments, and of granting specific authorisations permitting funds, other financial assets or other economic resources to be released. Furthermore, in so far as the contested measures do not have the effect of confiscating the applicant’s property, the Court finds that such measures are not punitive in nature.
99 Lastly, under Article 1(6) of Decision 2014/145, as amended, the competent authority of a Member State may authorise listed persons to enter its territory, inter alia on urgent humanitarian grounds.
100 In the third place, with regard to the principle of proportionality, it must 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 the case-law cited).
101 In that respect, according to case-law, 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, in which it is called upon to undertake complex assessments. Therefore, the legality of a measure adopted in those fields can 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 30 November 2016, Rotenberg v Council, T‑720/14, EU:T:2016:689, paragraph 179 the case-law cited).
102 In the present case, as to whether the measures in question are appropriate for attaining the objectives pursued, the Court notes that, given the importance of the objectives pursued by the restrictive measures at issue, the adverse consequences of their application to the applicant are not manifestly inordinate (see, to that effect and by analogy, judgments of 14 October 2009, Bank Melli Iran v Council, T‑390/08, EU:T:2009:401, paragraph 71, and of 12 March 2014, Al Assad v Council, T‑202/12, EU:T:2014:113, paragraph 116).
103 That is all the more so since, in the context of the examination of the first plea in law, it has been established that the restrictive measures against the applicant were justified on the ground that her situation made it possible to conclude that she satisfied the conditions for the application of the (g) criterion since she was one of the persons associated with a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, namely her husband in the present instance.
104 As regards the necessity of the restrictive measures at issue, it should be noted that alternative and less restrictive measures, such as a system of prior authorisation or an obligation to justify, a posteriori, how the funds transferred were used, are not as effective in achieving the objectives pursued, namely bringing pressure to bear on Russian decision-makers responsible for the situation in Ukraine, particularly given the possibility of circumventing the restrictions imposed (see, to that effect, judgment of 30 November 2016, Rotenberg v Council, T‑720/14, EU:T:2016:689, paragraph 182 the case-law cited). Moreover, the Court notes that the applicant has failed to indicate which less restrictive measures the Council could have adopted.
105 Further, it must also be borne in mind that Article 2(3) and (4) of Decision 2014/145, as amended, and Article 4(1), Article 5(1) and Article 6(1) of Regulation No 269/2014, as amended, provide for the possibility of authorising the use of frozen funds in order to meet basic needs or to meet certain commitments, and of granting specific authorisations permitting funds, other financial assets or other economic resources to be released.
106 Moreover, under Article 1(6) of Decision 2014/145, as amended, the competent authority of a Member State may authorise listed persons to enter its territory, inter alia on urgent humanitarian grounds.
107 Lastly, the presence of the applicant’s name on the lists at issue cannot be described as disproportionate for allegedly being potentially unlimited, since such lists are subject to periodic review so as to ensure that the persons who, and entities which, no longer meet the necessary criteria are removed from those lists (see, to that effect, judgment of 30 November 2016, Rotenberg v Council, T‑720/14, EU:T:2016:689, paragraph 185 the case-law cited).
108 That conclusion cannot be called into question by the applicant’s argument that, in essence, the effect of the restrictive measures adopted would be beneficial to the Russian Government since it would force numerous businesspersons and persons associated with them to return to the Russian Federation (see paragraph 86 above). It is sufficient to note in that regard that that argument is in no way substantiated and that it cannot be ruled out that those persons travel to countries other than the Russian Federation.
109 The Court must therefore conclude from the above that the restrictions of the applicant’s fundamental rights which flow from the restrictive measures at issue are not disproportionate and cannot lead to the annulment of the contested measures.
(b) Failure to observe the principle of equal treatment and the principle of legal certainty
110 In essence, the applicant submits that the fact that the words ‘associated with’ or the mere reference to the criterion of ‘association’ is imprecise confers an arbitrary discretion on the Council, thereby allowing it to include on the lists at issue – of the 1 110 people included on those lists – only two spouses (see paragraph 87 above).
111 In that regard, assuming that it is necessary to understand the applicant’s argument as being that, in view of the absence of a definition of the criterion of association, the Council has discretion which enabled it to impose restrictive measures on only two spouses, including the applicant, on the lists at issue, that argument must be rejected as unfounded. Although the Council cannot include on the lists people who do not satisfy the criteria for designation laid down by the applicable measures, it is not required to include on those lists all the persons who do satisfy those criteria. The Council has a broad discretion enabling it, when appropriate, not to impose restrictive measures on such a person or entity, where the Council considers that, in the light of the objectives of those measures, it would not be appropriate to do so (see, to that effect and by analogy, judgment of 22 April 2015, Tomana and Others v Council and Commission, T‑190/12, EU:T:2015:222, paragraph 243). The Court also notes that the fact, assuming it were established, that only two spouses, one of which was the applicant, were included on the lists at issue tends to show that the Council does not rely solely on a family relationship in order to include a person on the lists, but rather on both a family relationship and a business relationship, as in the present case.
112 Lastly, as regards the alleged failure to observe the principle of legal certainty, the applicant appears to claim that the very broad wording of the listing criterion or, in any event, of the words ‘associated with’ are incompatible with that principle (see paragraph 87 above).
113 In that regard, the Court notes that, according to settled case-law, the principle of legal certainty, which is one of the general principles of EU law, requires, in particular, that rules of law be clear, precise and predictable in their effects, in particular where they may have negative consequences on individuals and undertakings (see, to that effect, judgment of 29 April 2015, Bank of Industry and Mine v Council, T‑10/13, EU:T:2015:235, paragraph 77 and the case-law cited). A penalty, even of a non-criminal nature, cannot be imposed unless it rests on a clear and unambiguous legal basis. The principle of legal certainty means, in particular, that any EU legislation, in particular when it imposes or permits the imposition of sanctions, must be clear and precise so that the persons concerned may know without ambiguity what rights and obligations flow from it and may take steps accordingly. That requirement of a clear and precise legal basis has also been enshrined in the field of restrictive measures (see, to that effect, judgment of 4 September 2015, NIOC and Others v Council, T‑577/12, not published, EU:T:2015:596, paragraphs 131 and 132 and the case-law cited).
114 It must be acknowledged that, by its very broad formulation, the criterion of association at issue in the present case confers discretion on the Council. However, contrary to the applicant’s claims, that discretion is neither arbitrary nor incompatible with the principle of legal certainty.
115 First, the fact that a provision contains vague terms does not necessarily mean that Article 7 of the European Convention for the Protection of Human Rights and Fundamental Freedoms had been infringed, and the fact that a law confers discretion is not in itself inconsistent with the requirement of foreseeability, provided that the scope of the discretion and the manner if its exercise are indicated with sufficient clarity, having regard to the legitimate aim in question, to give the individual adequate protection against arbitrary interference. Moreover, the requirement of foreseeability which accompanies the principle that penalties must have a proper legal basis – which requires that legislation must clearly define offences and penalties – does not preclude the law from conferring discretion the scope and manner of exercise of which are indicated with sufficient clarity. Those principles of case-law are also applicable with regard to restrictive measures which, although they are not aimed in principle at penalising infringements, but constitute preventive measures, have a considerable impact on the rights and freedoms of the persons concerned (see, to that effect, judgment of 4 September 2015, NIOC and Others v Council, T‑577/12, not published, EU:T:2015:596, paragraphs 135 and 136 and the case-law cited).
116 Second, the association criterion at issue in the present case forms part of a legal framework that is clearly delimited by the objectives pursued by the legislation governing restrictive measures against the Russian Federation.
117 In that regard, it should be recalled that the substantive criterion relating to leading businesspersons laid down in Article 2(1)(g) of Decision 2014/145, as amended, and Article 3(1)(g) of Regulation No 269/2014, as amended, concerns persons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation. That criterion covers persons who may provide sources of revenue to finance Russia’s actions undermining Ukraine’s territorial integrity, sovereignty and independence.
118 Furthermore, as regards persons associated with leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, the Court notes that, when the funds of the latter are frozen, there is a non-negligible risk that they may exert pressure on persons associated with them in order to circumvent the effect of the measures to which they are subject (see, to that effect and by analogy, judgment of 4 September 2015, NIOC and Others v Council, T‑577/12, not published, EU:T:2015:596, paragraph 139).
119 It must be concluded from this that the criterion of association thus objectively defines a limited category of persons.
120 For all those reasons, the Court finds that the association criterion limits the Council’s discretion by establishing objective criteria, which ensure the degree of foreseeability required by EU law and observance of the principle of legal certainty.
121 In the light of the foregoing, the second plea in law must be rejected and, consequently, the action must be dismissed in its entirety.
Costs
122 Under Article 134(1) of the Rules of Procedure of the General Court, 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, she must be ordered to pay the costs in accordance with the form of order sought by the Council.
On those grounds,
THE GENERAL COURT (First Chamber)
hereby:
1. Dismisses the action;
2. Orders Ms Galina Evgenyevna Pumpyanskaya to pay the costs.
Delivered in open court in Luxembourg on 6 September 2023.
V. Di Bucci | | M. van der Woude |