JUDGMENT OF THE GENERAL COURT (First Chamber)
26 June 2024 (*)
(Common foreign and security policy – Restrictive measures taken 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 – Maintaining the applicant’s name on the list – Concept of ‘association’ – Article 2(1)(g) of Decision 2014/145/CFSP – Article 3(1)(g) of Regulation (EU) No 269/2014 – Error of assessment)
In Case T‑737/22,
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: V. Di Bucci,
having regard to the written part of the procedure,
having regard to the fact that no request for a hearing was submitted by the parties within three weeks after service of notification of the close of the written part of the procedure, and having decided to rule on the action without an oral part of the procedure, pursuant to Article 106(3) of the Rules of Procedure of the General Court,
gives the following
Judgment
1 By her action pursuant to Article 263 TFEU, the applicant, Ms Galina Evgenyevna Pumpyanskaya, seeks the annulment (i) of Council Decision (CFSP) 2022/1530 of 14 September 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 239, p. 149) and of Council Implementing Regulation (EU) 2022/1529 of 14 September 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 239, p. 1) (together, ‘the first set of maintaining acts’) and (ii) of Council Decision (CFSP) 2023/572 of 13 March 2023 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2023 L 75I, p. 134) and of Council Implementing Regulation (EU) 2023/571 of 13 March 2023 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 2023 L 75I, p. 1) (together, ‘the second set of maintaining acts’), in so far as those acts (together, ‘the contested acts’) maintain her name on the lists annexed to those acts.
Background to the dispute
On the initial inclusion of the applicant’s name on the lists of persons subject to the restrictive measures
2 The present case has been brought in connection with the restrictive measures adopted by the European Union in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.
3 The applicant is a Russian national.
4 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).
5 On the same date, the Council adopted, on the basis of Article 215(2) TFEU, Regulation 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).
6 On 25 February 2022, in view of the gravity of the situation in Ukraine, the Council adopted Decision (CFSP) 2022/329 amending Decision 2014/145 (OJ 2022 L 50, p. 1) and Regulation (EU) 2022/330 amending Regulation 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.
7 Article 2(1) and (2) of Decision 2014/145, as amended by Decision 2022/329, 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.’
8 The detailed rules governing that freezing of funds are laid down in Article 2(3) to (6) of Decision 2014/145.
9 Article 1(1)(e) of Decision 2014/145, as amended by Decision 2022/329, prohibits the entry into or transit through the territories of the Member States of natural persons who satisfy essentially the same criteria as those set out in Article 2(1)(g) of that decision.
10 Regulation No 269/2014, as amended by Regulation 2022/330, requires the adoption of measures to freeze funds and lays down the detailed rules governing that freezing in terms essentially identical to those of Decision 2014/145, as amended by Decision 2022/329. Article 3(1)(g) of that regulation largely reproduces Article 2(1)(g) of that decision.
11 By Council Decision (CFSP) 2022/397 of 9 March 2022 amending Decision 2014/145 (OJ 2022 L 80, p. 31) and Council Implementing Regulation (EU) 2022/396 of 9 March 2022 implementing Regulation No 269/2014 (OJ 2022 L 80, p. 1) (‘the initial acts’), the applicant’s name was added, respectively, to the list annexed to Decision 2014/145 and to that contained in Annex I to Regulation No 269/2014 (‘the lists at issue’) for the following reasons:
‘[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 [Mr] Dmitry Alexandrovich Pumpyansky, Chairman of the Board of Directors of PJSC Pipe Metallurgical Company, a Russian global manufacturer of steel pipes for the oil and gas industry. [Mr] Dmitry A. Pumpyansky 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 [the] Russian Federation and State-owned enterprises, including Russian railways, Gazprom and Rosneft.
[The applicant] 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.’
12 The Council published a notice in the Official Journal of the European Union of 10 March 2022 (OJ 2022 C 114I, p. 1) for the attention of the persons subject to the restrictive measures provided for in the contested acts. 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 acts should be reconsidered.
13 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.
14 By letter of 28 April 2022, the Council replied to the applicant’s request referred to in paragraph 13 above and sent the information contained in the file bearing the reference WK 3054/2022, dated 8 March 2022.
15 The applicant brought an action before the General Court of the European Union, registered under case number T‑272/22, seeking the annulment of the initial acts, in so far as those acts concerned her. That action was dismissed by judgment of 6 September 2023, Pumpyanskaya v Council (T‑272/22, not published, EU:T:2023:491).
The retention of the applicant’s name on the lists at issue until 15 September 2023
16 On 14 September 2022, the Council adopted the first set of maintaining acts, which extended the validity of the initial acts until 15 March 2023, without modifying the grounds for including the applicant’s name on the lists at issue in relation to those contained in the initial acts.
17 On 24 November 2022, the applicant brought the present action, registered under Case T‑737/22, seeking the annulment of the first set of maintaining acts, in so far as those acts concerned her.
18 By letter of 22 December 2022, the Council informed the applicant of its intention to maintain the restrictive measures in respect of her and sent her the information contained in the file bearing the reference WK 17690/2022 INIT. She replied to that letter on 10 January 2023.
19 On 13 March 2023, the Council adopted the second set of maintaining acts, which extended the measures taken against the applicant until 15 September 2023. The grounds for including the applicant’s name on the lists at issue were amended as follows:
‘[The applicant] is the spouse of [Mr] Dmitry Alexandrovich Pumpyansky, a Russian leading businessperson, member of the Council of Chamber of Commerce and Industry (CCI) of the Russian Federation and President of the Sverdlovsk regional Union of Industrialists and Entrepreneurs (SOSPP). He is former Chairman of the Board of Directors of PJSC Pipe Metallurgical Company, and former President and board member of Group Sinara. Both companies support and benefit from cooperation with authorities of the Russian Federation and State-owned enterprises, including Russian railways, Gazprom and Rosneft.
[The applicant] 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.’
Forms of order sought
20 Following the modification of the application, the applicant claims, in essence, that the Court should:
– declare the inapplicability of the final subparagraph of Article 2(1) of Decision 2014/145, as amended by Decision 2022/329;
– annul the contested measures, in so far as they concern her;
– order the Council to pay the costs.
21 Following the observations on the modification of the application, the Council contends, in essence, that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
Law
The request for joinder
22 In its defence, the Council makes a request for the present case to be joined with Cases T‑270/22, Pumpyanskiy v Council, T‑272/22, Pumpyanskaya v Council, T‑291/22, Pumpyanskiy v Council, T‑734/22, Pumpyanskiy v Council, and T‑740/22, Pumpyanskiy v Council, for the purposes of the oral part of the proceedings and the decision closing the proceedings.
23 Taking into account the circumstances of the case and the advanced state of the various cases, the Court considers that it is not appropriate to join the present case with the aforementioned cases.
24 The Council’s request for joinder made in its first head of claim is therefore refused.
The claims for annulment
25 In support of her action, the applicant raises, in essence, five pleas in law, alleging (i) an infringement of the rights of the defence; (ii) an error of assessment; (iii) an infringement of the duty to state reasons; (iv) an infringement of the principle of proportionality and of fundamental rights; and (v) the illegality under Article 277 TFEU of the listing criteria laid down in Article 2(1)(f) and (g) of Decision 2014/145, as amended by Decision 2022/329.
26 The Court considers it appropriate to begin by examining the second plea in law, which alleges an error of assessment.
27 The applicant alleges that the Council made a manifest error of assessment of the facts and maintained her name on the lists at issue in relying on the criterion of association with ‘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’ (‘criterion (g)’) (the criterion laid down in Article 2(1)(g) of Decision 2014/145, as amended by Decision 2022/329, in Article 3(1)(g) of Regulation No 269/2014, as amended by Regulation 2022/330, and, in essence, in Article 1(1)(e) of Decision 2014/145, as amended by Decision 2022/329).
28 In essence, the applicant submits that, since her spouse resigned from his positions in the company TMK and Group Sinara in March 2022, the Council made an error of assessment in finding that her spouse was a leading businessperson within the meaning of criterion (g), which was the ground for the inclusion of his name on the lists at issue. She submits that the Council therefore also made an error of assessment in finding her to be associated with her spouse within the meaning of that criterion.
29 The Council disputes the applicant’s arguments. It submits, in essence, that Mr Dmitry Alexandrovich Pumpyanskiy may be classified as a leading businessperson within the meaning of criterion (g) and that it is therefore correct for it to find that the applicant was associated with her spouse within the meaning of that criterion.
30 As a preliminary point, it should be pointed out that the second plea in law must be regarded as alleging an error of assessment, and not a manifest error of assessment. While 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 satisfied, the fact remains that the Courts of the European Union must ensure the review, in principle a full review, of the legality of all acts of the European Union (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).
31 Furthermore, it should be emphasised that the effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires, in particular, that the Courts of the European Union ensure that the decision by which restrictive measures were adopted or maintained, which affects the person or entity concerned individually, is taken on a sufficiently solid factual basis. That entails a verification of the factual allegations in the summary of reasons underpinning that decision, 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 It is for the Council 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 (see, to that effect, 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 121, and of 28 November 2013, Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 66).
33 It is in the light of those case-law principles that the Court must determine whether the Council was correct in law to find that the applicant was associated with her spouse, who was himself the subject of restrictive measures.
34 In the present case, it should be observed that the Council decided to include the applicant’s name again on the lists at issue on one sole ground, namely her connection with Mr Dmitry Alexandrovich Pumpyanskiy, who is her spouse.
35 In that regard, it must be noted that, first, Mr Dmitry Alexandrovich Pumpyanskiy’s name was included on the lists at issue by Decision 2022/397 and Implementing Regulation 2022/396, and that that inclusion was since maintained by Decisions 2022/1530 and 2023/572 and Implementing Regulations 2022/1529 and 2023/571. Secondly, the justification given for that relisting was, in particular, as stated in paragraph 7 above, that being a leading businessperson is one of the criteria for inclusion on the lists at issue.
36 However, the judgment delivered today in Pumpyanskiy v Council (T‑740/22, not published) finds that the Council made an error of assessment in finding that Mr Dmitry Alexandrovich Pumpyanskiy is still a leading businessperson within the meaning of criterion (g) and annuls Decisions 2022/1530 and 2023/572 and Implementing Regulations 2022/1529 and 2023/571 in so far as those acts concern him.
37 Consequently, without it being necessary either to assess the evidence adduced by the Council or to analyse whether the applicant is in fact connected with Mr Dmitry Alexandrovich Pumpyanskiy, it must be held that the Council made an error of assessment in including the applicant’s name on the lists at issue as regards both the first and the second set of maintaining acts, since the merits of that inclusion rest on her connection with a person wrongly classified as 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, pursuant to Article 2(1)(g) of Decision 2014/145, as amended by Decision 2022/329.
38 In the light of the foregoing, the second plea in law must be upheld and the contested acts annulled in so far as they concern the applicant, without it being necessary to examine the other pleas for annulment raised in support of the action or the first head of claim.
Costs
39 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.
40 In the present case, since the Council has been unsuccessful, it must be ordered to bear its own costs and to pay those of the applicant, in accordance with the form of order sought by the applicant.
On those grounds,
THE GENERAL COURT (First Chamber)
hereby:
1. Annuls Council Decision (CFSP) 2022/1530 of 14 September 2022 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, Council Implementing Regulation (EU) 2022/1529 of 14 September 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, Council Decision (CFSP) 2023/572 of 13 March 2023 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, and Council Implementing Regulation (EU) 2023/571 of 13 March 2023 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, in so far as the name of Ms Galina Evgenyevna Pumpyanskaya was maintained on the list of persons, entities and bodies to which those restrictive measures apply;
2. Orders the Council of the European Union to bear its own costs and to pay those incurred by Ms Evgenyevna Pumpyanskaya.
Delivered in open court in Luxembourg on 26 June 2024.
V. Di Bucci | | M. van der Woude |