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 ‘leading businessperson’ – Proportionality)
In Case T‑270/22,
Dmitry Alexandrovich Pumpyanskiy, 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, B. Driessen and V. Piessevaux, 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 his action based on Article 263 TFEU, the applicant, Mr Dmitry Alexandrovich Pumpyanskiy, 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 his name on the lists annexed thereto.
Background to the dispute
2 The applicant is a businessman of Russian nationality.
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:
…
(f) natural or legal persons, entities or bodies supporting, materially or financially, or benefitting from the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine; or
(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)(d) and (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)(f) and (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)(a) to (g) of that regulation largely reproduces Article 2(1)(a) to (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 Chairman of the board of directors of PJSC Pipe Metallurgic Company and the President and a board member of Group Sinara. He thus supports and benefits from cooperation with authorities of Russian Federation and State-owned enterprises, including Russian railways, Gazprom and Rosneft. He is therefore 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.
On 24 February 2022, in the aftermath of the initial stages of Russian aggression against Ukraine, Dmitry Alexandrovich Pumpyanskiy, along with other 36 businesspeople, met with President Vladimir Putin and other members of the Russian government to discuss the impact of the course of action in the wake of Western sanctions. The fact that he was invited to attend this meeting shows that he is a member of the closest circle of [President] Vladimir Putin and that he is supporting or implementing actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, as well as stability and security in Ukraine. It also shows that he is one of the leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of Russia, which is responsible for annexation of Crimea and 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 him, 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 3051/2022, 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‑272/22, Pumpyanskaya 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‑272/22, Pumpyanskaya 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‑272/22, Pumpyanskaya 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, failure to observe the principle of proportionality and infringement of fundamental rights and, second, a manifest error of assessment.
25 The Court considers it appropriate to begin by examining the second plea.
1. The second plea in law, alleging a manifest error of assessment
26 In essence, the applicant claims that the Council has not adduced specific, precise and consistent evidence that constitutes a sufficient factual basis to justify including his name on the lists at issue.
27 The Council disputes the merits of that plea.
28 The Court notes that this plea must be regarded as alleging an error of assessment and not a manifest error of assessment. Although it is true that 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, the fact remains that the EU Courts must ensure the review, in principle the full review, of the lawfulness of all Union acts (see, to that effect, judgments of 3 July 2014, National Iranian Tanker Company v Council, T‑565/12, EU:T:2014:608, paragraphs 54 and 55, and of 26 October 2022, Ovsyannikov v Council, T‑714/20, not published, EU:T:2022:674, paragraph 61 and the case-law cited).
29 Furthermore, it is apparent from the statement of reasons for the contested measures that only the following two criteria were applied to the applicant, which the Council confirmed in the rejoinder and at the hearing:
– ‘natural or legal persons … supporting, materially or financially, or benefitting from the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine’ (criterion laid down in Article 2(1)(f) of Decision 2014/145, as amended, Article 3(1)(f) of Regulation No 269/2014, as amended, and, in essence, Article 1(1)(d) of Decision 2014/145, as amended; ‘the (f) criterion’);
– ‘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’).
30 It is therefore in the light of those two criteria alone that the applicant’s arguments must be examined.
(a) Preliminary observations
31 The Court notes that 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).
32 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, to that effect, judgment of 20 July 2017, Badica and Kardiam v Council, T‑619/15, EU:T:2017:532, paragraph 99 and the case-law cited).
33 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).
34 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
35 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);
– articles from 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), from the information website for the city of Taganrog (Russia) from October 2021 (Exhibit 14), from Corriere della Sera from February 2022 (Exhibit 2) and from Novaya Gazeta from February 2018 (Exhibit 10);
– 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 the applicant on the website ‘wikipedia.org’ from July 2014 (Exhibit 8).
(c) The reliability of the evidence submitted by the Council
36 The applicant calls into question the reliability of the evidence on which the Council has relied. In essence, he alleges that it is an insubstantial compilation of press articles and websites of low quality, with very little, if any, relevance to the applicant, presumably compiled using a search engine. Such a compilation cannot constitute sufficient 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.
37 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).
38 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).
39 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 37 and 38 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, as the Council correctly points out.
40 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 Corriere della Sera or The Financial Times, which are not newspapers of low quality. 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.
41 In the third place, the applicant’s unsubstantiated assertion that the evidence in the WK file has very little or no relevance to him must be rejected. Suffice it to note that most of that evidence refers directly to the applicant. The rest concerns TMK and the Sinara Group; the applicant does not deny having been, at least until 9 March 2022, the Chairman of the board of directors of TMK and the President and a board member of the Sinara Group.
42 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 37 above.
43 Consequently, it is necessary to examine the merits of including the applicant’s name on the lists at issue, starting with the second of those criteria, relating to leading businesspersons.
(d) The application of the (g) criterion to the applicant
44 As a preliminary point, the Court notes that the applicant acknowledges, in paragraph 70 of the application, that it is apparent from the reasons contained in the contested measures that the criterion of ‘leading businessperson’ was applied to him.
45 The ground relied on with regard to the applicant vis-à-vis the (g) criterion concerns the fact that he was Chairman of TMK’s board of directors and the President and a board member of the Sinara Group.
46 It is therefore necessary to ascertain whether all the evidence adduced by the Council discharges the burden of proof borne by it and constitutes a set of indicia that is sufficiently specific, precise and consistent to support that ground for including the applicant’s name on the lists at issue.
47 In the first place, the Court notes that, by the applicant’s own admission, he is the founder of both TMK and the Sinara Group, who are involved in a variety of economic sectors. First, in the application, he states that ‘having obtained a university degree in metallurgy, [he] decided to engage in business in the metallurgical industry and to invest the funds gained from his activities in the trade. [He] acquired pipe companies which were in severe financial distress by investing personal funds in the purchase of shares from private entrepreneurs, and contributed those into [TMK], thus making the group a leading international market player’. Second, in the same application, he states that, ‘in 2000, [he] began to build a further branch of his business activities, [namely the Sinara Group], for managing assets not connected with the metallurgical industry, including, for example SKB Bank, a private financial institution in distress at that time. In 2004, Sinara started a transportation business in the Urals and eventually set up the production of modern electric locomotives. In 2006, the group produced the first locomotive and, by 2007, had set up its mass production’.
48 In the second place, it should be noted that TMK is a global producer of steel pipes in many sectors and in particular in the oil and gas sectors. That is borne out by paragraph 21 of the application, in which the applicant states that ‘TMK’s products, which are used in the energy sector, for industrial applications and for the transport of water and wastewater, are supplied to more than 80 countries worldwide [including] Russia’. Furthermore, in paragraph 23 of the application, the applicant points out that the Sinara Group ‘is further involved in residential real estate construction and infrastructure projects, particularly in the region of Ekaterinburg and Volgograd’. This information can be found, inter alia, in the articles from Rogtec magazine (Exhibits 3 and 4) and from Forbes (Exhibit 7) from which it is apparent that TMK and the Sinara Group concluded various contracts with State-owned companies such as Gazprom, Rosneft or Russian Railways. Those contracts are justified by the needs of those companies in that area and by TMK’s position in the steel pipes market, in particular for the oil and gas industries, but also by the position of the Sinara Group in other sectors.
49 In the third place, it must be noted that the applicant was, at the very least until 9 March 2022, Chairman of TMK’s board of directors and the President and a board member of the Sinara Group. Those facts are not disputed by the applicant. They are also to be found on the page taken from the website ‘wikipedia.org’ (Exhibit 8), on the page taken from TMK’s website (Exhibit 9) and in the article from the information website for the city of Taganrog (Exhibit 14).
50 In the fourth and last place, it is appropriate to point out that the applicant was present at a meeting of 24 February 2022 organised by President Putin which brought together a number of Russian oligarchs (Exhibits 1 and 2) and that he was given the Fourth Class Order for ‘Merit to the Fatherland’ (Exhibits 8, 9 and 14). Although those two factors are not, by themselves, decisive, they corroborate the applicant’s influence.
51 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 a leading businessperson because of his position within TMK and the Sinara Group.
52 As regards the classification of the applicant as a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, it should be noted that it is apparent from paragraphs 47 to 49 above that TMK and the Sinara Group, two companies founded by the applicant, are major players in a variety of economic sectors, in particular in the energy, transport and construction sectors, and that both have commercial relations with several State-owned companies.
53 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. Furthermore, in the application, the applicant states that, during the 2020 financial year, the revenue of the TMK group amounted to approximately 222 billion Russian roubles (RUB). In addition, the page taken from the Financial Times (Exhibit 6), the content of which is not disputed by the applicant, states that TMK had a net income of RUB 1.95 billion in 2021 and employs more than 39 000 people.
54 As regards the Sinara Group, the applicant states, in paragraph 24 of the application, that the overall revenue of that group amounted to approximately EUR 1.2 billion in the 2020 financial year. In addition, 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.
55 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.
56 Therefore, having regard, first, to the applicant’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 is a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.
57 It is true that neither Decision 2014/145, as amended, nor Regulation No 269/2014, as amended, defines the 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, it is undeniable that the business sectors in which those two companies are involved – namely, in particular, the oil and gas sectors – provide directly or at least indirectly, a substantial source of revenue for the Government of the Russian Federation.
58 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 was a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.
59 That finding cannot be called into question by the arguments put forward by the applicant.
60 In the first place, the applicant submits that the Council made an error of assessment by failing to take account of the fact that he had resigned from his duties with regard to TMK and the Sinara Group with effect from 9 March 2022 and, further, that he had transferred the shares he held in those two companies on 1 and 3 March 2022 respectively.
61 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).
62 The applicant’s argument based on his resignation must be rejected. Suffice it to note that, at least until the date of adoption of the contested measures, the applicant was Chairman of TMK’s board of directors and President and member of the Sinara Group’s board of directors. Since his resignation, even if it were established, does not predate the adoption of the contested measures, he cannot validly claim that the Council based the contested measures on incorrect facts when, until the date of their adoption, those facts were correct. Consequently, in accordance with the case-law cited in paragraph 61 above and as the Council reiterated at the hearing, the resignation of the applicant cannot be taken into consideration in the present action in so far as he seeks the annulment of the contested measures.
63 The applicant’s argument based on the transfer of his shares cannot succeed either. Irrespective of whether the applicant actually transferred his shares in TMK and the Sinara Group on 1 and 3 March 2022, it must be borne in mind that it was because of his position as Chairman of TMK’s board of directors, as well as President and member of the board of directors of the Sinara Group, that the Council concluded that the applicant was a leading businessperson within the meaning of the (g) criterion. Contrary to what the applicant claimed at the hearing, the grounds for the contested measures are not based on the control of TMK or the Sinara Group by the applicant or on the fact that he was its shareholder. Therefore, even if the applicant had actually transferred his shares in those two companies shortly before the adoption of the contested measures, that would have no effect on the legality of the contested measures.
64 In the second place, the applicant submits that, even if he were regarded as holding a position within TMK and the Sinara Group on the day on which the contested measures were adopted, that would still not lead to the conclusion that he is involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation. In essence, first, he claimed at the hearing that the (g) criterion could not be applied to him if he had no control over TMK and the Sinara Group. Since he no longer exercised such control before the adoption of the contested measures, his positions within those two companies alone are not sufficient for the conditions for the application of the (g) criterion to be met. Second, he submits that the evidence adduced by the Council does not demonstrate how TMK and the Sinara Group provide a ‘substantial’ source of revenue to the Government of the Russian Federation. Third, he observes that, in any event, the Council cannot rely solely on the payment of taxes by those two companies, since such a payment constitutes a statutory obligation. Fourth, in the reply, he adds, in essence, that Article 3 of Regulation No 269/2014, as amended, must be interpreted as meaning that it is the revenue generated by the persons listed as a result of their involvement which is covered, and not revenue generated by the economic sectors. In his view, the Russian Government must therefore materially benefit from the revenue provided by the listed person.
65 First, the argument that the (g) criterion cannot apply in the absence of control exercised by the applicant over TMK and the Sinara Group must be rejected. Irrespective of the fact that that argument is unsubstantiated and of the fact that the applicant does not dispute that he exercised such control until the beginning of March 2022, it is sufficient to note that that argument has no basis in the wording of the (g) criterion. On the contrary, duties such as those performed by the applicant within those two companies alone make it possible to classify him as a leading businessperson within the meaning of that criterion.
66 Second, the Court notes that the argument raised by the applicant in the reply, and reiterated at the hearing, is based on a misreading of Article 3 of Regulation No 269/2014, as amended. The wording of that provision leaves no room for doubt as to the fact that the revenue referred to is that of the economic sectors and not of the leading businesspersons. As the Council correctly points out in paragraphs 48 and 49 of the rejoinder, that reading of the abovementioned provision is, moreover, supported by the various language versions, including the English, German, Italian, Dutch and Hungarian versions.
67 Third, the argument that the Council could not rely solely on the fact that TMK and the Sinara Group paid taxes must be rejected, since that argument has no factual basis. In that regard, it is sufficient to note that the contested measures are based, principally, on the fact that the applicant is a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.
68 Fourth, it must be held that, contrary to what the applicant claims, the Council has adduced a set of indicia from which it can be concluded that the sectors in which TMK and the Sinara Group were active provided a substantial source of revenue to the Russian Government. The oil and gas industry sectors, in which TMK operates as a company specialising in the production of steel pipes, are two specific sectors of the Russian economy, which include the major State-owned companies Gazprom and Rosneft with which TMK has concluded commercial agreements and which benefit from TMK’s know-how to develop their activities. 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.
69 Consequently, in the light of all the foregoing, the Court finds that the ground for including the applicant’s name on the lists at issue due to his status as a leading businessperson within the meaning of the (g) criterion is sufficiently substantiated, with the result that, in the light of that criterion, the inclusion of his name on those lists is well founded.
70 According to case-law, given the preventive nature of the decisions adopting restrictive measures, if the EU Courts consider that, at the very least, one of the reasons mentioned is sufficiently detailed and specific, that it is substantiated and that it constitutes in itself sufficient basis to support that decision, the fact that the same cannot be said of other such reasons cannot justify the annulment of that decision (see judgment of 18 May 2022, Foz v Council, T‑296/20, under appeal, EU:T:2022:298, paragraph 178 (not published) and the case-law cited).
71 Accordingly, it is necessary, without there being any need to examine the merits of the other complaints raised by the applicant seeking to call into question the (f) criterion, to reject the second plea as unfounded.
2. The first plea in law, alleging a failure to observe the principle of proportionality and an infringement of fundamental rights
72 The applicant claims, in essence, that the inclusion of his name on the lists at issue constitutes an unjustified, arbitrary and disproportionate limitation of his fundamental rights, which include, inter alia, the right to respect for private and family life, home and communications and the right to property. He adds that, in the absence of any nexus between him and the Kremlin elite, and since he has transferred his shares in TMK and the Sinara Group, including his name on the lists at issue 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, he claims that, on the contrary, given the forced return of a whole range of businesspeople, including himself, back to Russia, triggered by the Council’s sanctions declared under Regulation No 269/2014, as amended, the Russian Government can expect materially increased tax income and investment activities within Russia in the years to come, stemming from those who had previously focused their personal and business interests primarily on Europe. Maintaining those restrictive measures against him is therefore neither necessary nor appropriate.
73 The Council disputes the merits of that plea.
74 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.
75 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).
76 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).
77 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’.
78 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).
79 In the present case, those four conditions are satisfied.
80 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 second 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 35 to 71 above).
81 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).
82 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.
83 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.
84 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.
85 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).
86 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).
87 In the present case, as to whether the measures in question are appropriate for attaining the objectives pursued, the Court first 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).
88 That is all the more so since, in the context of the examination of the second plea in law, it has been established that the restrictive measures against the applicant were justified on the ground that his situation made it possible to conclude that he satisfied the conditions for the application of the (g) criterion since he was a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.
89 Second, the fact that the applicant has no nexus with the Kremlin elite, or did not have a direct role in actions against Ukraine, is irrelevant since he was not subject to restrictive measures for that reason, but because he is a leading businessperson operating in economic sectors which constitute a substantial source of revenue for that government.
90 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.
91 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.
92 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.
93 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).
94 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 to return to the Russian Federation, including the applicant (see paragraph 72 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 the businesspersons who are the subject of those measures travel to countries other than the Russian Federation.
95 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.
96 In the light of the foregoing, the first plea in law must be rejected and, consequently, the action must be dismissed in its entirety.
Costs
97 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, he 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 Mr Dmitry Alexandrovich Pumpyanskiy to pay the costs.
Delivered in open court in Luxembourg on 6 September 2023.
V. Di Bucci | | M. van der Woude |