Case T‑256/11
Ahmed Abdelaziz Ezz and Others
v
Council of the European Union
(Common foreign and security policy — Restrictive measures directed against certain persons and entities in view of the situation in Egypt — Freezing of funds — Legal basis — Obligation to state reasons — Error of fact — Rights of the defence — Right to effective judicial protection — Right to property — Freedom to conduct a business)
Summary — Judgment of the General Court (Third Chamber), 27 February 2014
1. Acts of the institutions — Choice of legal basis — Decision concerning the adoption of restrictive measures directed against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds and of natural or legal persons, bodies or organisations associated with them — Article 29 TEU — Lawfulness
(Arts 21(2)(b) and (d) TEU, 24(1) TEU, 28 TEU and 29 TEU; Council Decision 2011/172/CFSP, Art. 1(1))
2. Acts of the institutions — Choice of legal basis — Regulation concerning the application of restrictive measures against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds and of natural or legal persons, bodies or organisations associated with them — Article 215(2) TFEU and Decision 2011/172 — Lawfulness
(Arts 60 EC, 301 EC and 308 EC; Art. 215(2) TFEU; Council Decision 2011/172/CFSP; Council Regulation No 270/2011, Art. 2(1))
3. EU law — Interpretation — Texts in several languages — Uniform interpretation — Consideration of different language versions — Interpretation by reference to the context and the purpose
(Council Decision 2011/172/CFSP, Art. 1(1))
4. Common foreign and security policy — Restrictive measures against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds in Egypt and of natural or legal persons, bodies or organisations associated with them — Divergence between the various language versions of Article 1 of Decision 2011/172 — Broad interpretation not infringing the principle that offences and penalties must be prescribed by law and the presumption of innocence
(Charter of Fundamental Rights of the European Union, Arts 48(1), and 49(1), first sentence; Council Decision 2011/172, Art. 1(1))
5. Common foreign and security policy — Restrictive measures against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds in Egypt and of natural or legal persons, bodies or organisations associated with them — Divergence between the various language versions of the list annexed to Decision 2011/172 — Broad interpretation of the implementing measure in conformity with the basic act
(Council Decision 2011/172, Art. 1(1), and Annex)
6. Acts of the institutions — Statement of reasons — Obligation — Scope — Freezing of funds of persons involved in the misappropriation of public funds in Egypt and of natural or legal persons, bodies or organisations associated with them — Decision falling within a context known to the person concerned, enabling him to understand the scope of the measure taken in his regard — Admissibility of a summary statement of reasons — Limits — Statement of reasons not capable of consisting of a general and stereotyped formulation
(Art. 296, second para., TFEU; Charter of Fundamental Rights of the European Union, Art. 41(2)(c); Council Decision 2011/172/CFSP; Council Regulation No 270/2011)
7. EU law — Principles — Rights of the defence — Freezing of funds of persons involved in the misappropriation of public funds in Egypt and of natural or legal persons, bodies or organisations associated with them — Right of access to documents — Rights subject to an application in that behalf before the Council
(Council Decision 2011/172/CFSP; Council Regulation No 270/2011)
8. EU law — Principles — Rights of the defence — Right to effective judicial protection — Freezing of funds of persons involved in the misappropriation of public funds in Egypt and of natural or legal persons, bodies or organisations associated with them — No right to be heard prior to adoption of such measures — Obligation to disclose individual and specific grounds for the decisions adopted — Scope — Rights guaranteed by judicial review exercised by the EU judicature and by the possibility of a hearing after the measures are taken
(Charter of Fundamental Rights of the European Union, Art. 47(1); Council Decision 2011/172/CFSP; Council Regulation No 270/2011)
9. Common foreign and security policy — Restrictive measures against certain persons and entities in view of the situation in Egypt — Freezing of funds of persons involved in the misappropriation of public funds in Egypt and of natural or legal persons, bodies or organisations associated with them — Restriction of the right to property and the free exercise of an economic activity — No breach of principle of proportionality
(Art. 21(2)(b) and (d) TEU; Charter of Fundamental Rights of the European Union, Arts 16, 17 and 52(1); Council Decision 2011/172/CFSP, Art. 1; Council Regulation No 270/2011, Art. 2(1))
1. Article 1 of Decision 2011/172 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt may legally be adopted on the basis of Article 29 TEU. Decisions which (i) come within the framework of the common foreign and security policy (CFSP), as defined in Article 24(1) TEU, (ii) relate to a ‘a particular matter of a geographical or thematic nature’ and (iii) are not in the nature of ‘operational action’ within the meaning of Article 28 TEU constitute ‘approaches of the Union’ within the meaning of Article 29 TEU. Where those conditions are met, not only acts programmatic in nature or mere declarations of intent, but also decisions providing for measures capable of directly affecting the legal position of individuals may be adopted on the basis of Article 29 TEU.
That decision, by seeking to aid the authorities of a non-member country in their fight against misapplication of public funds, is therefore based on the CFSP and satisfies the objectives referred to in Article 21(2)(b) and (d) TEU, without entailing any operation, whether civil or military, and while being taken having regard to the situation in a particular non-member State.
(see paras 41, 42, 44-47)
2. Regulation No 270/2011 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt may legally be adopted on the basis of Article 215(2) TFEU and Decision 2011/172. Article 215(2) TFEU does not restrict its scope to decisions directed at rulers of third States or their associates. It may serve as a legal basis for adopting restrictive measures against any person, irrespective of status, on condition that those measures have been provided for by a decision taken under the CFSP. Thus, the said regulation, the wording of which is analogous to that of Decision 2011/172, satisfies the conditions laid down by Article 215(2) TFEU.
That conclusion cannot be called into question by invoking Articles 60 EC and 301 EC, applicable prior to the entry into force of the Treaty of Lisbon. That treaty changed the law as it stood by inserting a new Article 215 TFEU. Thus, whilst the first paragraph of that article covers the areas previously within the ambit of Articles 60 EC and 301, its second paragraph henceforth enables the Council to adopt, by an act laid down in Article 288 TFEU, restrictive measures against any addressees in no way linked to the governing regime of a non-member country.
(see paras 49-53)
3. See the text of the decision.
(see paras 62, 63, 68, 89)
4. Because of the disparities between the Englishlanguage and French-language versions of Article 1(1) of Decision 2011/172 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt, that provision must be interpreted in the light of all the language versions and the context and purpose of which it forms part. In most EU languages other than English and French, the drafting of that provision is analogous to that of the English version. Moreover, the effectiveness of the decision in question would be seriously undermined if Article 1 covered only persons already convicted, since the persons concerned would, during the criminal proceedings, have enough time to transfer their assets to States having no form of cooperation with the Egyptian authorities. Article 1(1) of Decision 2011/172 must therefore be interpreted as covering, inter alia, persons who, possibly without their knowledge, may have benefited from the proceeds of the misappropriation of Egyptian State funds and on that basis are subject to protective measures, prescribed in a judicial context, intended to preserve the assets arising from such misappropriation.
Moreover, firstly, that freezing of assets does not constitute an administrative penalty or come within the scope of the first sentence of Article 49(1) of the Charter of Fundamental Rights of the European Union, so that the principle that provisions imposing administrative penalties must be interpreted strictly does not preclude a broad interpretation of Article 1(1) of Decision 2011/172. Secondly, in adopting Decision 2011/172, the Council did not itself declare the persons referred to in Article 1(1) thereof guilty of conduct punished under Egyptian criminal law or the law of an EU Member State. In addition, it did not encourage the public to believe incorrectly in the guilt of those persons or prejudge the assessment of the facts by the competent court. It follows that neither does the principle of the presumption of innocence preclude the broad interpretation of that provision.
(see paras 64, 66, 67, 80, 81, 83, 84)
5. Having regard to the disparity between the various language versions, the Annex to Decision 2011/172 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt must be interpreted, in conformity with Decision 2011/172, which it implements, as covering three categories of persons, namely, in addition to persons being prosecuted for misappropriation of State funds, those prosecuted as a party to that misappropriation and those subject to judicial proceedings connected to criminal proceedings for misappropriation of State funds.
(see paras 90, 91, 94)
6. See the text of the decision.
(see paras 105-109, 113-116)
7. See the text of the decision.
(see paras 161-165)
8. An initial decision to freeze funds, such as that contained in the Annex to Decision 2011/172 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt and Annex I to Regulation No 270/2011 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt, must be able to take advantage of a surprise effect. Accordingly, the Council cannot be required to communicate the grounds for that measure to the person concerned before such a measure is adopted. Nor is it under an obligation to inform the persons concerned by a measure of that kind of its imminent adoption. However, the principle of the observance of the rights of the defence and the right to an effective remedy guaranteed by the first paragraph of Article 47(1) of the Charter of Fundamental Rights require, as a rule, that the European Union authority which adopts an act imposing restrictive measures in respect of a person or entity communicate the grounds for that act, at least as swiftly as possible after it was adopted, in order to enable those persons or entities to defend their interests or exercise their right to bring an action. The Council is, as a rule, required to communicate a decision individually to satisfy that obligation.
None the less, the fact that the Council has not itself communicated the grounds for an act imposing restrictive measures is not capable of affecting the validity of that act when such a failure did not have the effect of depriving the person or entity concerned of an opportunity of knowing, in good time, the reasons for that act or of assessing its validity.
The natural or legal persons to which an initial decision to freeze their funds applies have the right to be heard by the Council after that decision has been adopted. However, the Council is not required automatically to conduct a hearing.
(see paras 176, 180, 181, 183, 184)
9. See the text of the decision.
(see paras 195, 198-200, 206, 209, 228-233)