Case T‑313/22
Roman Arkadyevich Abramovich
v
Council of the European Union
Judgment of the General Court (First Chamber, Extended Composition) of 20 December 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 – List of persons, entities and bodies subject to the freezing of funds and economic resources – Restriction on entry into the territory of the Member States – List of persons, entities and bodies subject to restrictions on entry into the territories of the Member States – Inclusion and maintenance of the applicant’s name on the lists – Definition of ‘leading businesspersons’ – Article 2(1)(g) of Decision 2014/145/CFSP – Obligation to state reasons – Rights of the defence – Error of assessment – Proportionality – Equal treatment – Right to property – Freedom to conduct a business – Right to private life – Application of restriction on entry to a national of a Member State – Free movement of Union citizens)
1. Acts of the institutions – Statement of reasons – Obligation – Scope – Restrictive measures taken having regard to the situation in Ukraine – Leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Obligation to identify in the statement of reasons the specific and concrete elements justifying that measure – Decision falling within a context known to the person concerned, enabling him or her to understand the scope of the measure taken against him or her – Whether summary statement of reasons is sufficient
(Art. 296, second para., TFEU; Charter of Fundamental Rights of the European Union, Art. 41(2)(c); Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429, (CFSP) 2022/1530, (CFSP) 2023/572 and (CFSP) 2023/811; Council Regulation No 269/2014 and Implementing Regulations 2022/427, 2022/1529, 2023/571 and 2023/806)
(see paragraphs 39-42, 45-47, 50)
2. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds – Rights of the defence – Subsequent decision maintaining the name of the applicant on the list of persons covered by those measures – No new grounds – Obligation for the Council to disclose to the person concerned new evidence taken into account during its periodic review of the restrictive measures – Communication of the new evidence to the person concerned so that he or she can submit his or her observations
(Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/1530 and (CFSP) 2023/572; Council Regulation No 269/2014 and Implementing Regulations 2022/1529 and 2023/571)
(see paragraph 59)
3. EU law – Principles – Rights of the defence – Right to effective judicial protection – Restrictive measures taken having regard to the situation in Ukraine – No right to a prior formal hearing – No infringement of the right to be heard
(Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/1530 and (CFSP) 2023/572; Council Regulation No 269/2014 and Implementing Regulations 2022/1529 and 2023/571)
(see paragraph 60)
4. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and of persons associated with them – Rights of the defence – Subsequent decision maintaining the name of the applicant on the list of persons covered by those measures – No new grounds – No new inculpatory evidence – No notification of inculpatory evidence – No infringement of the right to be heard
(Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/1530 and (CFSP) 2023/572; Council Regulation No 269/2014 and Implementing Regulations 2022/1529 and 2023/571)
(see paragraphs 62, 65-67)
5. EU law – Principles – Rights of the defence – Right to be heard – No obligation on the institutions to adhere to the point of view of the parties concerned – No obligation to reply to all the arguments of the parties
(Charter of Fundamental Rights of the European Union, Art. 41(2))
(see paragraphs 69, 70)
6. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures taken having regard to the situation in Ukraine – Scope of the review – Proof that the measure is well founded – Obligation on the competent EU authority to establish, in the event of challenge, that the reasons relied on against the persons or entities concerned are well founded – No error of assessment
(Art. 275, second para., TFEU; Charter of Fundamental Rights of the European Union, Art. 47; Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429, (CFSP) 2022/1530, (CFSP) 2023/572 and (CFSP) 2023/811; Council Regulation No 269/2014 and Implementing Regulations 2022/427, 2022/1529, 2023/571 and 2023/806)
(see paragraphs 75-79, 102-106, 112, 113, 116, 117, 120, 121)
7. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures taken having regard to the situation in Ukraine – Scope of the review – Proof that the measure is well founded – Obligation on the competent EU authority to establish, in the event of challenge, that the reasons relied on against the persons or entities concerned are well founded – Breadth of the discretion of that competent authority – Relevance of the evidence produced in respect of a previous listing in the absence of any alteration to the reasons, changes in the applicant’s situation or developments in the context in Ukraine
(Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429, (CFSP) 2022/1530, (CFSP) 2023/572 and (CFSP) 2023/811; Council Regulation No 269/2014 and Implementing Regulations 2022/427, 2022/1529, 2023/571 and 2023/806)
(see paragraphs 80, 81)
8. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Criteria for adopting restrictive measures – Leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Meaning – No need to demonstrate close ties or interdependence between the person subject to the measures and the Russian Government or its actions undermining the territorial integrity, sovereignty and independence of Ukraine
(Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429, (CFSP) 2022/1530, (CFSP) 2023/572 and (CFSP) 2023/811, Art. 2(1)(g); Council Regulation No 269/2014, Art. 3(1)(g), and Implementing Regulations 2022/427, 2022/1529, 2023/571 and 2023/806)
(see paragraphs 92-97)
9. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Criteria for adopting restrictive measures – Leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and persons associated with them – Concept of ‘economic sector providing a substantial source of revenue’
(Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429, (CFSP) 2022/1530, (CFSP) 2023/572 and (CFSP) 2023/811, Art. 2(1)(g); Council Regulation No 269/2014, Art. 3(1)(g), and Implementing Regulations 2022/427, 2022/1529, 2023/571 and 2023/806)
(see paragraphs 108, 109)
10. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and of persons associated with them – Restrictive measures not adopted by the Council against businesspersons who are not of Russian nationality – No breach of the principle of equal treatment
(Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429, (CFSP) 2022/1530, (CFSP) 2023/572 and (CFSP) 2023/811; Council Regulation No 269/2014 and Implementing Regulations 2022/427, 2022/1529, 2023/571 and 2023/806)
(see paragraphs 127, 130)
11. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation and of persons associated with them – Judicial review of legality – Appropriateness of the restrictive measures – Restrictive measures pursuing a legitimate aim of the common foreign and security policy
(Arts 5(4) and 21(2)(c) TEU; Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429, (CFSP) 2022/1530, (CFSP) 2023/572 and (CFSP) 2023/811; Council Regulation No 269/2014 and Implementing Regulations 2022/427, 2022/1529, 2023/571 and 2023/806)
(see paragraphs 137-141, 144-146, 149)
12. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of certain persons and entities having regard to the situation in Ukraine – Restriction of the right to respect for private life, the right to property, the freedom to conduct a business and the freedom of movement and of residence – No breach of the principle of proportionality
(Charter of Fundamental Rights of the European Union, Arts 7, 16, 17, 45 and 52(1); Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429, (CFSP) 2022/1530, (CFSP) 2023/572 and (CFSP) 2023/811; Council Regulation No 269/2014 and Implementing Regulations 2022/427, 2022/1529, 2023/571 and 2023/806)
(see paragraphs 155-164, 166)
13. EU law – Principles – Fundamental rights – Presumption of innocence – Decision to freeze funds taken against certain persons and entities in the light of the situation in Ukraine – Compatibility with that principle – Conditions
(Charter of Fundamental Rights of the European Union, Art. 48(1); Council Decision 2014/145/CFSP, as amended by Decisions (CFSP) 2022/429, (CFSP) 2022/1530, (CFSP) 2023/572 and (CFSP) 2023/811; Council Regulation No 269/2014 and Implementing Regulations 2022/427, 2022/1529, 2023/571 and 2023/806)
(see paragraph 167)
14. Non-contractual liability – Conditions – Unlawfulness – Damage – Causal link – Cumulative conditions – One of the conditions not satisfied – Action for damages dismissed in its entirety
(Art. 340, second para., TFEU)
(see paragraphs 172-175)
Résumé
Following the military attack launched by the Russian Federation against Ukraine on 24 February 2022, the Council of the European Union adopted, on 15 March 2022, Decision 2022/429 (1) and Regulation 2022/427, (2) by way of which Roman Arkadyevich Abramovich was added to the lists of persons, entities and bodies adopted by the Council since 2014 (3) on account of the support given to actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.
The applicant, who is a businessman of Russian, Israeli and Portuguese nationality, was made subject, by the Council, to a prohibition on entry into or transit through the European Union and had his funds and banking assets frozen, in accordance, respectively, with Article 1(1)(b) and (e) and Article 2(1)(d) and (g) of Decision 2014/145, as amended, on account of his close ties to President Putin and his status as a major shareholder in Evraz, one of Russia’s largest taxpayers. Those measures were extended in respect of the applicant in September 2022, (4) March 2023 (5) and April 2023 (6) for the same reasons.
The applicant brought an action before the General Court of the European Union seeking annulment of the acts of the Council and compensation of the harm allegedly suffered as a result of those acts.
The Court, which dismisses the action in its entirety, clarifies the scope of the listing criterion referred to in Article 2(1)(g) of Decision 2014/145 (‘criterion (g)’) based on the status of leading businessperson involved in economic sectors providing a substantial source of revenue to the Russian Government.
Findings of the Court
As regards, first of all, the obligation to state reasons, the Court recalls that 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 or her to understand the scope of the measure concerning him or her. It makes clear that the statement of reasons for an act of the Council which imposes a restrictive measure has not only to identify the legal basis for that measure but also the actual and specific reasons why the Council considers that such a measure must be adopted in respect of the person concerned. In the present case, the context and circumstances surrounding the adoption of the contested acts were well known to the applicant. Furthermore, the statement of reasons for the contested acts expressly refers to the listing criteria and the factual reasons why the Council decided to include or maintain his name on the lists at issue. Consequently, the Court holds that the contested acts set out, to the requisite legal standard, the matters of fact and law on which those acts are based.
In so far as concerns, next, the applicant’s right to be heard, the Court observes that the mere fact that the Council did not find that the extension of the restrictive measures was unfounded, nor even deemed it necessary to carry out checks in the light of the observations submitted by the applicant, does not mean that it did not take cognisance of those observations. Although for the rights of the defence and the right to be heard to be observed, the EU institutions must enable the person concerned by the act adversely affecting him or her to make his or her views known effectively, those institutions cannot be required to accept those views. The Court finds that the Council discharged its obligations in so far as concerns the applicant’s right to be heard.
Furthermore, as to the inclusion of the applicant’s name on the lists on the basis of criterion (g), the Court observes that that criterion employs the concept of ‘leading businesspersons’ in correlation with the exercise of an activity ‘in economic sectors providing a substantial source of revenue to the [Russian] Government’, with no other condition regarding ties, be they direct or indirect, with that government. In that connection, there is a rational connection between the targeting of that category of persons and the objective of the restrictive measures in question, which is to increase the pressure on Russia and the costs of its actions against Ukraine. Accordingly, criterion (g) must be interpreted as meaning that it is intended to apply, on the one hand, to businesspersons regarded as ‘leading’ on account of their importance in their sector of activity and the importance of that sector to the Russian economy and, on the other hand, that it is the economic sectors in which those persons operate which must provide a substantial source of revenue to the Russian Government.
In the present case, the Court holds that the Council rightly considered that the applicant was a leading businessperson an account, in particular, of his professional status, the importance of his economic activities, the scale of his capital holdings in Evraz and, more particularly, his status as principal shareholder in the parent company of that group of companies.
The Court also points out that the Council adduced a sufficiently specific, precise and consistent body of evidence capable of demonstrating that the economic sector in which the applicant pursues an activity provides a substantial source of revenue to the Russian Government. In that connection, the Court points out that, contrary to the applicant’s claim, the phrase ‘providing a substantial source of revenue to the [Russian] Government’ set out in criterion (g) refers to the revenue from important economic sectors in Russia and not solely to the taxes paid by leading businesspersons. Furthermore, the circumstance that the tax revenue from the steel and mining sector is primarily allocated to the budgets of local federal entities is irrelevant. Even though that source of revenue is not intended for the federal budget or used directly by that government in order to support its military expenditure, the fact remains that that source allows that government, as a whole, without distinction as to whether that revenue comes from the federal budget or the regional budgets, to mobilise even more resources for its actions to compromise the territorial integrity, sovereignty and independence of Ukraine.
Accordingly, the Council did not make an error of assessment by deciding to include then maintain the applicant’s name on the lists at issue.
As regards the applicant’s argument that the Council’s application of criterion (g) is discriminatory, in that that criterion targets Russian businesspersons and undertakings whilst ignoring foreign undertakings, the Court states that that criterion does not refer to the nationality of the persons designated, but any natural person with the status of leading businessperson within the meaning of that criterion. Consequently, the persons subject to the restrictive measures at issue may be of any nationality if they meet the criterion in question.
As regards the alleged infringement of the principle of proportionality, the Court considered, in the light of the fundamental importance of the objectives pursued by the restrictive measures at issue, which are part of the wider objective of preserving peace, that the negative consequences resulting from the application thereof to the applicant are not manifestly disproportionate. The Council’s approach of gradually widening the circle of persons and entities subject to the restrictive measures at issue, on account of the worsening of the situation in Ukraine, in order to achieve the objectives pursued, supports that finding. Furthermore, those measures are appropriate in the light of the necessary objectives of general interest pursued, in so far as alternative, less restrictive measures would not be as effective in achieving the objectives pursued. The principle of proportionality has, therefore, not been infringed.
Finally, as regards the infringements of fundamental rights on which the applicant relies, the Court notes that, in accordance with the provisions of Article 52(1) of the Charter of Fundamental Rights of the European Union, these are not absolute rights and may be subject to limitations, provided that the limitations concerned are provided for by law, respect the essence of the fundamental right at issue and, subject to the principle of proportionality, are necessary and meet objectives of general interest recognised by the European Union. The Court finds that those conditions are satisfied in the present case. Moreover, it observes that restrictive measures are not, by their nature, criminal in any way and the effect thereof is therefore not to infringe the right to the presumption of innocence, recognised in Article 48(1) of the Charter of Fundamental Rights of the European Union. Consequently, the limitations on the applicant’s fundamental rights, which follow from the restrictive measures taken against him in the contested acts, are not disproportionate and do not vitiate those acts due to any unlawfulness.
Since the condition relating to the unlawfulness of the Council’s alleged conduct has not been satisfied, the Court ultimately finds that the non-contractual liability of the European Union cannot be incurred and, consequently, dismisses the applicant’s claim for compensation.