JUDGMENT OF THE GENERAL COURT (First Chamber)
29 May 2024 (*)
(Common foreign and security policy – Restrictive measures adopted 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 – Inclusion and maintenance of the applicant’s name on the list – Concept of ‘leading businessperson’ – 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‑363/22,
Farkhad Teimurovich Akhmedov, residing in Baku (Azerbaijan), represented by W. Julié and A. Beauchemin, lawyers,
applicant,
v
Council of the European Union, represented by B. Driessen and M. Di Gaetano, acting as Agents,
defendant,
THE GENERAL COURT (First Chamber),
composed of D. Spielmann, President, M. Brkan (Rapporteur) and S.L. Kalėda, Judges,
Registrar: I. Kurme, Administrator,
having regard to the written part of the procedure, in particular:
– the application lodged at the Registry of the General Court on 17 June 2022,
– the statement of modification lodged by the applicant at the Court Registry on 24 November 2022,
– the statement of modification lodged by the applicant at the Court Registry on 20 May 2023,
– the letter of 19 December 2023, by which the applicant stated that he was withdrawing his claim for compensation for his material and non-material damage,
further to the hearing on 9 January 2024,
gives the following
Judgment
1 By his action under Article 263 TFEU, the applicant, Mr Farkhad Teimurovich Akhmedov, seeks the annulment (i) of Council Decision (CFSP) 2022/582 of 8 April 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 110, p. 55), and of Council Implementing Regulation (EU) 2022/581 of 8 April 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 110, p. 3) (together, ‘the initial acts’); (ii) 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 maintaining acts of September 2022’); and (iii) 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 maintaining acts of March 2023’), in so far as those acts (together, ‘the contested acts’) concern the applicant.
Background to the dispute
2 The applicant is of Russian and Azerbaijani 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 24 February 2022, the President of the Russian Federation announced a military operation in Ukraine and, on the same day, Russian armed forces attacked Ukraine at a number of places in the country.
6 On 25 February 2022, in view of the gravity of the situation in Ukraine, the Council adopted, first, Decision (CFSP) 2022/329 amending Decision 2014/145 (OJ 2022 L 50, p. 1) and, second, Regulation (EU) 2022/330 amending Regulation No 269/2014 (OJ 2022 L 51, p. 1) in order, inter alia, to amend the criteria by which natural or legal persons, entities or bodies could be made subject to the restrictive measures at issue. According to recital 11 of Decision 2022/329, the Council considered that the applicable criteria of designation had to 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.
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 … 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 Regulation No 269/2014, in the version as amended by Regulation 2022/330, requires the adoption of measures for the freezing of funds and sets out the detailed rules for that freezing in terms essentially identical to those of Decision 2014/145, as amended. In fact, Article 3(1)(a) to (g) of that regulation essentially reproduces the content of Article 2(1)(a) to (g) of that decision.
10 Against that background, on 8 April 2022, the Council adopted the initial acts, by which the applicant’s name was added, respectively, 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’). The reasons for the inclusion of the applicant’s name on those lists are as follows:
‘[The applicant] is a Russian businessman involved in the energy sector and in Russian local politics. He founded Tansley Trading, which supplied equipment to Russian gas producers and became a minority shareholder in Nort[h]gas, an oil and gas company in Siberia, as well as Chairman of Bechtel Energy. He is close to the Kremlin and is a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.’
11 On 11 April 2022, the Council published a notice in the Official Journal of the European Union for the attention of the persons, entities and bodies subject to the restrictive measures provided for in Decision 2014/145, as amended by Decision 2022/582, and Regulation No 269/2014, as implemented by Implementing Regulation 2022/581 (OJ 2022 C 157, p. 11). That notice stated, inter alia, that the persons concerned could submit a request to the Council that the decision to include their names on the lists annexed to those acts should be reconsidered.
12 By letter of 31 May 2022, the applicant submitted a request to the Council for reconsideration of the initial acts.
13 By letter of 7 June 2022, the applicant requested that the Council communicate to him the evidence file on the basis of which the restrictive measures concerning him had been adopted.
14 By letter of 16 June 2022, the Council sent the applicant the information in the file with the reference WK 5041/2022 INIT (‘the first evidence file’).
Events occurring after the present action was brought
15 On 14 September 2022, the Council adopted the maintaining acts of September 2022, by which the measures adopted in respect of the applicant were extended to 15 March 2023.
16 In the maintaining acts of September 2022, the Council justified the extension of the restrictive measures concerning the applicant by reproducing all the grounds of the initial acts set out in paragraph 10 above.
17 By letter of 15 September 2022, the Council replied to the applicant’s request for reconsideration of 31 May 2022, rejecting that request and notifying him of its decision to maintain his name on the lists at issue.
18 By letter of 2 November 2022, the applicant sent the Council a fresh request for reconsideration.
19 By letter of 22 December 2022, the Council informed the applicant of its intention to maintain the restrictive measures concerning him while amending the statement of reasons for inclusion on the basis of the evidence file bearing the reference WK 5041/2022 ADD 1 REV 1 (‘the second evidence file’) and requested that he submit his observations before 12 January 2023.
20 By letter of 12 January 2023, the applicant submitted observations in response to the Council’s letter of 22 December 2022.
21 By letter of 6 February 2023, the Council informed the applicant of its intention to maintain the restrictive measures concerning him with an amended statement of reasons for inclusion and communicated the information in the files with the references WK 1558/2023 INIT (‘the third evidence file’) and WK 1565/2023 INIT (‘the fourth evidence file’). The Council asked the applicant to make his observations by 21 February 2023.
22 On 21 February 2023, the applicant submitted observations in response to the letter of 6 February 2023.
23 On 13 March 2023, the Council adopted the maintaining acts of March 2023, which extended the measures taken concerning the applicant until 15 September 2023. The grounds for including the applicant’s name were amended, as indicated by the Council in its letter of 6 February 2023, and read as follows:
‘[The applicant] is a Russian businessman who has been involved in the energy sector and in Russian local politics. He founded Tansley Trading, which supplied equipment to Russian gas producers and became a minority shareholder in Nort[h]gas, an oil and gas company in Siberia. He is reported to be close to the Kremlin and has been 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. He maintains residence in Russia, and has ongoing business interests in Russia, including in the IT and forestry sectors.’
24 By letter of 14 March 2023, the Council replied to the applicant’s letters of 2 November 2022, 12 January 2023 and 21 February 2023 and notified him of its decision to maintain his name on the lists at issue.
Forms of order sought
25 In his form of order sought as it now stands, the applicant claims that the Court should:
– annul the contested acts in so far as they concern him;
– order the Council to pay the costs.
26 The Council contends that the Court should:
– dismiss the application;
– in the alternative, if the contested acts were to be annulled in so far as they concern the applicant, order that the effects of Decision 2023/572 be maintained until the annulment in part of Implementing Regulation 2023/571 takes effect;
– order the applicant to pay the costs.
Law
27 In support of the action, the applicant relies on five pleas in law. The first is a plea of illegality in respect of Article 2(1)(g) of Decision 2014/145, as amended by Decision 2022/329, and in respect of Article 3(1)(g) of Regulation No 269/2014, as amended by Regulation 2022/330. In addition, he raises a second plea alleging infringement of the right to effective judicial protection and of the obligation to state reasons; a third plea alleging a ‘manifest’ error of assessment; and a fourth plea alleging infringement of the right to property. In his first statement of modification, the applicant also raises a fifth plea, alleging breach of the rights of the defence.
28 The Court considers it appropriate to begin by examining the third plea, alleging a ‘manifest’ error of assessment.
The third plea, alleging a ‘manifest’ error of assessment
29 The applicant claims in essence that the Council has failed to adduce specific, precise and consistent evidence that constitutes a sufficient factual basis to support the inclusion of his name on the lists at issue. He disputes the probative value of the evidence put forward by the Council in support of the inclusion and maintaining of his name on the lists at issue and claims that the assessments set out in the statement of reasons for the contested acts are incorrect.
30 The Council contests the merits of this plea.
Preliminary observations
31 It is important to state that this plea should 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 met, the fact remains that the Courts of the European Union 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).
32 It is in addition apparent from the statement of reasons for the contested acts that only criterion (g) was applied to the applicant. The applicant’s arguments must therefore be considered in the light of compliance with the conditions for applying criterion (g).
33 Consequently, the applicant’s arguments that the Council has failed to demonstrate that his listing is well founded under the criterion set out in Article 2(1)(f) of Decision 2014/145 and Article 3(1)(f) of Regulation No 269/2014 must be rejected as ineffective.
34 Furthermore, it should be observed 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 are to ensure that the decision by which restrictive measures have been 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).
35 It is the task of the competent European Union authority to establish, in the event of challenge, that the reasons relied on against the person or entity concerned are well founded, and not the task of the latter to adduce evidence of the negative, that those reasons are not well founded (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 3 July 2014, National Iranian Tanker Company v Council, T‑565/12, EU:T:2014:608, paragraph 57).
36 For that purpose, there is no requirement that the Council produce before the Courts of the European Union all the information and evidence underlying the reasons alleged in the act of which annulment is sought. It is, however, necessary that the information or evidence produced should support the reasons relied on against the person concerned (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 122, and of 28 November 2013, Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 67).
37 The assessment of the merits of those reasons 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 Courts of the European Union 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 or her 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).
38 In addition, it should be borne in mind that restrictive measures are of a precautionary and, by definition, provisional nature, the validity of which always depends on whether the factual and legal circumstances which led to their adoption continue to apply and on the need to persist with them in order to achieve their aims. It is thus incumbent on the Council, in the course of its periodic review of those restrictive measures, to conduct an updated assessment of the situation and to appraise the impact of such measures, in order to determine whether they have made it possible to achieve the objectives pursued by the initial inclusion of the names of the persons and entities concerned on the list at issue or whether the same conclusion in respect of those persons and entities can still be drawn (see judgment of 15 November 2023, OT v Council, T‑193/22, EU:T:2023:716, paragraph 168 and the case-law cited).
39 In order to justify maintaining a person’s name on the list, the Council is not prohibited from basing its decision on the same evidence justifying the initial inclusion, re-inclusion or previous retention of the name of the person concerned on the list, provided that the grounds for inclusion remain unchanged and the context has not changed in such a way that that evidence is now out of date. That context includes not only the situation of the country in respect of which the system of restrictive measures was established, but also the particular situation of the person concerned (see judgment of 26 October 2022, Ovsyannikov v Council, T‑714/20, not published, EU:T:2022:674, paragraph 78 and the case-law cited).
40 It is in the light of those principles of case-law that the merits of the applicant’s arguments must be assessed.
The evidence adduced by the Council
41 In the present case, in order to justify the inclusion of the applicant’s name on the lists at issue in the initial acts, the Council provided the first evidence file referred to in paragraph 13 above, including the following items:
– an extract from the Wikipedia website consulted on 10 March 2022 (exhibit 1 of the first evidence file);
– a screenshot of the website of the financial magazine Forbes accessed on 10 March 2022 (exhibit 2 of the first evidence file);
– an extract from the website ‘Rumafia.net’ consulted on 10 March 2022 (exhibit 3 of the first evidence file);
– a screenshot of the website of The Times newspaper accessed on 10 March 2022 (exhibit 4 of the first evidence file);
42 In order to justify retaining the applicant’s name on the lists at issue by the maintaining acts of September 2022, the Council relied on the same listing grounds and evidence as for the initial acts.
43 In order to justify retaining the applicant’s name on the lists at issue by means of the maintaining acts of March 2023, the Council provided the second evidence file referred to in paragraph 19 above as well as the third and fourth evidence files referred to in paragraph 21 above.
44 The second evidence file contains the following items:
– an extract from the book Proof of Corruption by Door Seth Abramson, published on 12 September 2020 and accessed on 18 July 2022 (exhibit 1 of the second evidence file);
– a screenshot of an extract of the Clearly Trade Watch website, published on 29 January 2018 and accessed on 18 July 2022 (exhibit 2 of the second evidence file);
– an extract from the Regnum website, published on 18 June 2022 and accessed on 19 July 2022 (exhibits 3 and 6 of the second evidence file);
– an extract from the ‘Baku.WS’ website, published on 12 October 2016 and accessed on 19 July 2022 (exhibits 4 and 7 of the second evidence file);
– a screenshot of an article on the website of the newspaper Daily Mail, published on 13 March 2018 and accessed on 19 July 2022 (exhibit 5 of the second evidence file);
– a screenshot from the website of the United States Department of the Treasury, accessed on 6 December 2022 (exhibit 8 of the second evidence file).
45 The third evidence file contains the following items:
– an extract from the website ‘presscentr.ru’, published on 31 March 2022 and accessed on 31 January 2023 (exhibit 1 of the third evidence file);
– an extract from the website ‘list-org.com’, accessed on 31 January 2023 (exhibit 2 of the third evidence file);
– a screenshot of the Apple Store’s Russian website accessed on 31 January 2023 (exhibit 3 of the third evidence file);
– a screenshot of an article on the Business Insider website, published on 1 April 2021 and accessed on 31 January 2023 (exhibit 4 of the third evidence file);
– a screenshot of the website ‘archive.org’ concerning an article published by ‘EY’ on 7 July 2015 and accessed on 31 December 2022 (exhibit 5 of the third evidence file);
– a screenshot of the Statista website, accessed on 15 December 2022 (exhibit 6 of the third evidence file);
– an extract from the website of the company Schneider Group, published on 21 December 2021 and accessed on 15 December 2022 (exhibit 7 of the third evidence file);
– a screenshot of the 24smi website, accessed on 20 February 2023 (exhibit 8 of the third evidence file);
– a screenshot from the Google maps website, accessed on 20 February 2023 (exhibit 9 of the third evidence file);
– an extract from the website Russia Beyond, published on 7 May 2012 and accessed on 20 February 2022 (exhibit 10 of the third evidence file).
46 The fourth evidence file contains a summary of classified evidence, which has not been made available to the Court, concerning the applicant maintaining permanent residency in Russia and the fact that he has bank accounts in Russia.
The application of criterion (g) to the applicant
47 As regards criterion (g), it should be observed that that criterion refers to the concept of ‘leading businesspersons’ in conjunction with their being ‘involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation’, with no other condition being given concerning either a direct or indirect link with that government. The purpose of that criterion is in fact to exert maximum pressure on the Russian authorities so that they bring an end to their actions and policies destabilising Ukraine and the military aggression against that country (judgment of 15 November 2023, OT v Council, T‑193/22, EU:T:2023:716, paragraph 138).
48 In that regard, there is a rational connection between the targeting of leading businesspersons involved in economic sectors providing a substantial source of revenue to the Russian Government, on the one hand, and the objective of the restrictive measures in the present case, which is to increase pressure on the Russian Federation and the costs of the latter’s actions to undermine Ukraine’s territorial integrity, sovereignty and independence, on the other (see judgment of 15 November 2023, OT v Council, T‑193/22, EU:T:2023:716, paragraph 139 and the case-law cited).
49 Furthermore, the objective of the restrictive measures at issue is not to penalise certain persons or entities because of their links with the situation in Ukraine or their links with the Russian Government, but to impose economic sanctions on the Russian Federation in order to increase pressure on it and the costs of its actions to undermine Ukraine’s territorial integrity, sovereignty and independence and to bring an end as soon as possible to the aggression which Ukraine is suffering (see judgment of 15 November 2023, OT v Council, T‑193/22, EU:T:2023:716, paragraph 144 and the case-law cited).
50 It is therefore in the light of that interpretation of criterion (g) that it is necessary to assess the merits of the listing and maintaining grounds set out in the contested acts.
– Concerning the initial acts and the maintaining acts of September 2022
51 The applicant submits that each of the assertions made in the listing grounds is either false or outdated, such that the reasons put forward by the Council to justify his inclusion on the lists at issue are vitiated by an error of assessment and do not provide a basis to consider that the applicant is a leading businessperson involved in an economic sector providing a substantial source of revenue to the government in question.
52 First, the applicant argues that the Council cannot rely on facts that relate to economic activities exercised by the applicant that date back more than a decade and that therefore are not of any relevance to the events currently taking place in Ukraine.
53 Second, the applicant disputes being ‘close to the Kremlin’. In that regard, he submits that the only reason he was added to the list drawn up by the United States Department of the Treasury was because he has a net worth of 1 billion United States dollars (USD) (approximately EUR 900 million) or more. In addition, he asserts that various disputes which have caused him to come into conflict with the company Gazprom are such as to show that he did not acquire his wealth thanks to the Russian Government. In the reply, the applicant submits that the Council’s claims that he participated in negotiations to resolve international disputes between Russia and Turkey as someone who ‘has worked closely with Putin and knows Putin well’ are based on an article which is not included the first evidence file.
54 Third, as regards his being active in ‘Russian local politics’, the applicant submits that his involvement in Russian politics was limited to two local mandates and ended in 2009, more than 10 years ago.
55 Fourth, the applicant disputes being a ‘Russian businessman involved in the energy sector’. In that regard, the applicant does not contest that he founded Tansley Trading, but claims that it was dissolved in 1999. In addition, he does not deny that he was a minority shareholder in Northgas, but submits that he sold all his shares in that company in 2012. The applicant disputes the Council’s claim that he is the chairman of the company Bechtel Energy. He states that he acquired the shares held by Bechtel Energy in the Northgas company in 1996 but has never been the chairman of that company or held any other position within it.
56 Furthermore, the applicant claims that he has publicly criticised the Russian Government on numerous occasions.
57 The Council disputes the applicant’s arguments.
58 The Council asserts that the grounds for the listing are consistent with criterion (g) and that the elements of those grounds are proven. According to the Council, the applicant was active in the energy sector, which provides a substantial source of revenue to the Russian Government. The fact that the applicant may no longer be involved in the energy sector, as he claims, does not change the circumstance that he was indeed involved with that sector in the past and that that past activity allowed him to maintain close connections with the Russian Government.
59 The Council argues that the applicant is a leading businessperson since his wealth is estimated at more than USD 1 billion and he has, since 2011, appeared continuously on the list of the 200 richest individuals in Russia. In addition, the Council states that, irrespective of the dissolution of Tansley Trading and the sale of Northgas, the applicant is a ‘leading businessperson’ in the Russian oil and gas industry, which provides a substantial source of revenue to the Russian Government, since those two companies are prominent in that sector.
60 In addition, in order to demonstrate the applicant’s position as a leading businessperson, the Council submits that he participated in negotiations to resolve international disputes between Russia and Turkey and that, on that occasion, the Turkish Minister for Foreign Affairs described him as a diplomatic go-between ‘who has worked closely with Putin and knows Putin well’, and that he was included in the so-called ‘Kremlin’ report, drawn up by the United States Department of the Treasury, which lists the senior political figures and leading businesspersons of the Russian Federation with an estimated net worth of at least USD 1 billion.
61 As far as the applicant’s participation in Russian local politics is concerned, the Council submits that the applicant does not contest that he was the elected representative of the Krasnodar region (Russia) and then of the Yamalo-Nenets autonomous area in the upper chamber of the Federal Assembly of the Russian Federation between 2004 and 2009.
62 As regards the applicant’s argument that he publicly criticised the Russian Government, the Council submits that the evidence provided by the applicant, namely an interview available on YouTube, cannot be accessed and that it cannot verify the transcript provided by the applicant. In addition, the Council argues that there is no evidence to prove that the applicant has openly spoken out against the Government of the Russian Federation or Mr Putin.
63 It should be observed that the grounds relied on with regard to the applicant which are linked with criterion (g) relate to the fact that he is a Russian businessman involved in the energy sector and in Russian local politics, that he founded the company Tansley Trading, which supplied equipment to Russian gas producers, and became a minority shareholder in Northgas, an oil and gas company in Siberia, as well as chairman of Bechtel Energy, and that he is close to the Kremlin.
64 Having regard to the wording of criterion (g), it must be held that the persons targeted must be regarded as leading on account of their importance in the sector in which they pursue their activity and the importance of that sector for the Russian economy. In that regard, the concept of ‘leading businessperson’ must therefore be understood as referring to the importance of those persons in the light, inter alia, of their occupational status, the importance of their economic activities, the extent of their capital holdings or their functions within one or more of the companies in which they pursue those activities (see judgment of 15 November 2023, OT v Council, T‑193/22, EU:T:2023:716, paragraph 143, and the case-law cited).
65 It is necessary to examine whether the applicant is a leading businessperson within the meaning of criterion (g).
66 First, as regards the applicant’s role as founder of Tansley Trading, it is apparent from exhibits 1 to 3 of the first evidence file that the applicant founded that company in 1987. According to exhibit 3 of the first evidence file, namely the extract from the website ‘Rumafia.net’, the company Tansley Trading was changed and became Farco Group Limited. The applicant has produced a record from the Bureau van Dijk with the legal information concerning Tansley Trading, which shows that it changed its name in 1994 to Farco Services and was subsequently dissolved in 1999.
67 As a result of that dissolution in 1999, it must be held that the applicant has shown that he no longer has any links with Tansley Trading.
68 Second, as regards the applicant’s role as a minority shareholder of Northgas, it is apparent from exhibits 2 and 3 of the first evidence file that the applicant became a minority shareholder in that company in 1993. Exhibit 3 makes clear that Northgas was established in 1993, that the US company Bechtel Energy held 44% of the shares, that Urengoigazprom, a subsidiary of Gazprom, held 51% of the shares, while the remaining 5% belonged to Tansley Trading, owned by the applicant. It is apparent from exhibits 1 to 3 that in 1998 the applicant acquired the Northgas shares held by Bechtel Energy. Those shares were added to the 5% already held in Northgas by the applicant and the latter therefore owned 49% of the shares in Northgas after that purchase. However, it is apparent from those same items of evidence that the applicant sold all his shares in Northgas in 2012.
69 That is indeed confirmed by the applicant, who has provided articles published by Bloomberg and Reuters on 6 November 2012, which describe the sale of his shares in Northgas to Novatek, which is not disputed by the Council.
70 Accordingly, the applicant has sold all his shares in the company Northgas and has not held any position in that company since 2012.
71 The Council argues that it is not restricted to applying restrictive measures solely to leading businesspersons who currently generate a substantial source of revenue for the Russian Government and it claims that there is a risk that restrictive measures may be circumvented by the disposal of shares in companies.
72 In that regard, with respect to criterion (g), it should be observed that the concept of ‘leading businessperson’ refers to factual circumstances which relate both to the past and extend over time. Consequently, the fact that the grounds for including the applicant’s name on the lists at issue refer to a factual situation which pertained before the adoption of the initial acts and which might have changed very recently does not necessarily mean that the restrictive measures adopted with regard to him by those acts are obsolete (see, by analogy, judgment of 12 February 2020, Amisi Kumba v Council, T‑163/18, EU:T:2020:57, paragraph 83).
73 However, in the present case, the change in the applicant’s situation occurred more than 10 years before those measures were adopted. Consequently, the taking into consideration of activities pursued by the applicant, which date back 10 years or more, would have the effect of freezing his situation in a distant, already elapsed past and of depriving the periodic review provided for, inter alia, in the third paragraph of Article 6 of Decision 2014/145 and Article 14(4) of Regulation No 269/2014, as amended, of all practical effect (see, to that effect and by analogy, judgment of 26 October 2022, Ovsyannikov v Council, T‑714/20, not published, EU:T:2022:674, paragraph 86 and the case-law cited).
74 Accordingly, since the company Tansley Trading, which was owned by the applicant, was dissolved in 1999 and since the applicant sold his shares in Northgas in 2012, he cannot be regarded as a leading businessperson in the energy sector on the basis of his previous shareholdings in Tansley Trading and Northgas.
75 Third, as regards the role of the applicant as chairman of Bechtel Energy, that part of the grounds for listing is based on exhibit 2 of the first evidence file, which is an extract from the magazine Forbes about the applicant, which states that in 1998 he acquired the 44% stake of another investor, Bechtel Energy, and ‘became chairman’, without further clarification. The applicant has provided an extract about himself from Forbes, accessed on 16 June 2022, which shows that that extract has been updated when compared with exhibit 2 of the first evidence file and that it now states that the applicant acquired in 1998 the 44% stake of another investor, Bechtel Energy, and ‘became chairman of Nort[h]gas’. The applicant also provided a link to the website of the company Bechtel showing that he has never been the chairman or chief executive of that company.
76 The grounds for listing the applicant’s name are therefore vitiated by a factual error since the applicant was not the chairman of the Bechtel Energy company at the time the initial acts were adopted.
77 Fourth, as regards the applicant’s role in Russian local politics, it is apparent from exhibits 1 and 3 of the first evidence file that the applicant was a member of the Soviet Federatsii Federal’nogo Sobrania Rossiskoi Federatsii (the Federation Council of the Federal Assembly of the Russian Federation) as a representative of the Krasnodar region from 2004, and then of the autonomous area of Yamalo-Nenets from 2007, and that he resigned from those functions in 2009. The applicant does not dispute those facts, but argues that he ceased to carry out any political activities in 2009.
78 It should be observed that the material on which the Council bases its finding relating to the applicant’s involvement in local politics dates back to more than 10 years before the adoption of the initial acts. Consequently, in accordance with the case-law cited in paragraph 73 above, the taking into consideration of those political activities, which date back 10 years or more, would have the effect of freezing his situation in a distant, already elapsed past. Accordingly, the part of the grounds that state, in the present tense, that the applicant is a Russian businessman involved in Russian local politics is unfounded.
79 Fifth, as regards the part of the grounds relating to the fact that the applicant is allegedly ‘close to the Kremlin’ and the Council’s argument concerning the role played by the applicant in the resolution of an international dispute between Russia and Turkey, in which he was described as a person ‘who has worked closely with Putin and knows Putin well’, it should be borne in mind that criterion (g) does not involve a demonstration by the Council of the existence of close ties or a relationship of interdependence with the Government of the Russian Federation (judgment of 15 November 2023, OT v Council, T‑193/22, EU:T:2023:716, paragraph 145).
80 It follows thereby that the part of the grounds for listing that describe the applicant as ‘close to the Kremlin’ and the Council’s argument concerning the role played by the applicant in the resolution of an international dispute between Russia and Turkey could be taken into consideration as contextual factors but cannot serve to justify the inclusion of the applicant’s name on the lists at issue on the basis of criterion (g).
81 In the light of the factors set out in paragraphs 66 to 80 above, it must be concluded that the Council has not adduced a set of indicia that are sufficiently specific, precise and consistent to be capable of demonstrating that the applicant was, for the purpose of criterion (g), a leading businessperson involved in economic sectors which provided a substantial source of revenue to the Government of the Russian Federation on the dates of adoption of the initial acts and the maintaining acts of September 2022.
82 Nor is that finding, furthermore, challenged by the Council’s argument that the applicant is important on account of his wealth, which amounts to more than USD 1 billion, and because he has been included since 2011 on the list of the richest individuals in Russia published by the magazine Forbes and on the so-called ‘Kremlin’ list drawn up by the United States Department of the Treasury. It must be held that those factors, which concern the applicant’s personal wealth, are not by themselves sufficient to demonstrate the importance of the applicant in a sector that is important for the Russian economy for the purposes of criterion (g), namely, in the present case, the energy sector.
83 Accordingly, the Council made an error of assessment by considering that the applicant was a leading businessperson involved in economic sectors which provided a substantial source of revenue to the Government of the Russian Federation for the purpose of criterion (g).
84 As regards the maintaining acts of September 2022, it must be stated that the reasons for maintaining the applicant’s name on the lists at issue are identical to those of the initial acts and that the Council relied on the same evidence which led to the initial inclusion of the applicant’s name on the lists at issue.
85 Consequently, the maintaining of the applicant on the lists at issue in the acts of September 2022 is vitiated by the same error of assessment as that found in paragraph 83 above.
– Concerning the maintaining acts of March 2023
86 The applicant asserts that, apart from an irrelevant reference to business interests in the IT and forestry sectors, the Council persists in referring to past activities and former positions of the applicant, without demonstrating how that past conduct is relevant to justifying the maintenance of his inclusion on the lists at issue.
87 As regards his closeness to the Russian Government, the applicant submits that the change in the wording of the grounds shows that the allegation of ties with the Russian Government is unconfirmed information. In addition, the applicant asserts that his involvement in the resolution of a dispute between Russia and Turkey was limited to providing counsel to the Foreign Minister of Turkey on the basis of his past experience as a businessman in Russia, which does not demonstrate that he is ‘close to the Kremlin’.
88 As regards the new grounds, that the applicant has business interests in the Russian IT and forestry sectors and has a residence in Russia, the applicant asserts that those claims are not sufficient to consider that he is a leading businessperson involved in a sector providing a substantial source of revenue to the Russian Government.
89 First, the applicant does not dispute that he has business interests in the company Udan LLC, registered in December 2021, whose main activity is the cultivation of conifers, but he submits that that company has not yet generated any turnover. In addition, the applicant confirms that he is a minority shareholder in Avigal LLC, in the IT sector, but asserts that that company, which owns the Talkme platform, is a start-up which does not yet have any turnover, while the Talkme platform has only 10 000 users. As regards exhibits 4, 5 and 7 of the third evidence file, the applicant submits that they are not relevant because the Talkme platform, belonging to Avigal LLC, is not subject to the Russian legislation referred to in the evidence file, which requires mobile devices and smart phones to be equipped with pre-installed Russian software. According to the applicant, the fact that he has business interests in Russia through those two companies, which operate in a minor sector of the Russian economy, certainly does not make him a ‘leading businessperson’.
90 Second, as regards his purported Russian residence, the applicant submits that he does not live in Russia. According to the applicant, the Council confused two villages in Russia and failed to mention the fact that he had sold the house he owned in Russia to his son in 2019. The applicant currently resides in Azerbaijan, where he also has his main business interests and oversees charitable activities.
91 As regards the summary of the classified information included in the fourth evidence file, the applicant claims that the classified evidence relating to his residence and bank accounts in Russia is inadmissible since it was not communicated to him and that his bank accounts in Russia are not relevant for the inclusion of his name on the lists at issue.
92 The Council disputes those arguments.
93 First, the Council submits that it changed the listing grounds to reflect the past activity of the applicant, namely that he ‘has been’ involved in the energy sector and a leading businessperson. According to the Council, that information is still capable of leading it to the same conclusion as to the inclusion of the applicant on the lists at issue. In addition, the Council submits that it added references to the applicant’s business interests in the forestry and IT sectors owing to new information which came to light in the process of the review.
94 Second, as regards the ground to the effect that the applicant ‘is reported to be close to the Kremlin’, the Council asserts that it simply represents a state of fact, on account of his past status as a member of the Federal Assembly, and that those ties do not seem to have been lost with the passage of time. The Council also submits that the applicant still has close ties with influential business and political players, as is evidenced by the applicant’s contacts with the Turkish Foreign Minister.
95 Third, according to the Council, the fact that the applicant has a residence in Russia shows that he has maintained his ties in that country, while the transfer of the ownership of his house to his son has no influence in that regard. The Council also argues that the evidence adduced by the applicant that he resides in Azerbaijan is not sufficient.
96 It must be observed that in the maintaining acts of March 2023, the Council amended the grounds for including the applicant’s name on the lists at issue in order to state that he ‘has been involved in the energy sector and in Russian local politics’ and ‘is reported to be close to the Kremlin’. In addition, the Council added a ground to the effect that the applicant ‘maintains residence in Russia, and has ongoing business interests in Russia, including in the IT and forestry sectors’.
97 The Council also relied on the second and third evidence files, containing respectively eight and ten items of evidence, and on the fourth evidence file, the contents of which were summarised and communicated to the applicant owing to its confidential nature.
98 It is therefore necessary to ascertain whether the whole of the evidence submitted 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 the grounds for listing in the maintaining acts of March 2023.
99 In the first place, as regards the applicant’s past involvement in the energy sector and local politics, the Council has not adduced any additional evidence to show how such past involvement made it possible to classify the applicant as a leading businessperson within the meaning of criterion (g). As is apparent from paragraph 64 above, in the light of criterion (g), the persons covered must be regarded as being leading on account of their importance in the sector in which they are involved and the importance of that sector for the Russian economy. However, as is apparent from paragraphs 73 and 74 above, the applicant cannot be regarded as a leading businessperson owing to his past shareholdings in Tansley Trading and Northgas.
100 In the second place, as regards the grounds concerning the fact that the applicant resides in Russia and has ongoing business interests in Russia, in particular in the IT and forestry sectors, it should be observed, first of all, concerning the forestry sector, that it is apparent from exhibit 3 of the second evidence file, which is an extract from the website ‘regnum.ru’ published on 18 June 2022, that the applicant owns the company Udan LLC. The applicant does not dispute his ownership of that company, registered in December 2021, whose main activity is the cultivation of seedlings for reforestation purposes.
101 In so far as the applicant is capable of exerting an influence over Udan LLC, it is necessary, in order to determine whether he may be classified as a leading businessperson within the meaning of criterion (g), to assess the applicant’s importance in the sector in which he is involved and to ascertain whether that company is important in the economic sector in which it operates.
102 In that regard, the Council adduces no evidence as to the importance of Udan LLC in the forestry sector. In addition, it is apparent from an audit report for Udan LLC relating to 2021, provided by the applicant, that that company has operated since 10 December 2021 and that it did not generate any turnover for 2021. The applicant also provided that company’s corporate tax return for 2022, which shows that that company generated non-operating income of 502 263 Russian roubles (RUB) (approximately EUR 4 700).
103 Consequently, the Council cannot rely on the applicant’s business interests in that sector, which are limited to the operations of Udan LLC, in order to consider that the applicant is a leading businessperson within the meaning of criterion (g).
104 Next, as regards the applicant’s interests in the IT sector, it is apparent from exhibit 1 of the third evidence file, which is an extract from the website ‘presscentr.ru’, published on 31 March 2022, and from exhibit 8, which is an extract from the website ‘24smi.org’, accessed on 20 February 2023, that the applicant invested RUB 100 million (approximately EUR 950 000) in a new streaming platform called Talkme. Exhibit 2 of the third evidence file is an extract from the website ‘List-org.com’, which publishes information about Russian companies. It is apparent from that item of evidence that the applicant holds 25% of the company Avigal, which has owned the Talkme platform since 12 May 2021.
105 The applicant does not dispute that he is a minority shareholder of Avigal. However, he submits that Avigal is a small start-up which has not generated any turnover and that the Talkme platform has only 10 000 users.
106 Having regard to the 25% shareholding held by the applicant in the Avigal company, which controls the Talkme platform, it is necessary, in order to determine whether the applicant is a leading businessperson within the meaning of criterion (g), to examine the applicant’s importance in the sector in which he is involved and to ascertain whether that company is important in the economic sector in which it operates.
107 In that regard, it is apparent from exhibit 2 of the third evidence file that Avigal was registered on 20 November 2019 and was listed as a micro-enterprise in the register of small and medium-sized enterprises on 3 October 2021. It is also apparent from that item of evidence that the Avigal company did not generate any turnover for 2021.
108 In addition, exhibits 4, 5 and 7 of the third evidence file refer to legislative changes in Russia which require all computers, multifunction mobiles and televisions to have pre-installed Russian software. Exhibit 3 of the third evidence file is a screenshot from the Russian website of the Apple store accessed by the Council on 31 January 2023, which shows that it was possible on that date to download the Talkme platform application from that website. However, that evidence does not demonstrate the importance of Avigal and the Talkme platform in the IT sector. In addition, in response to a question put by the Court at the hearing, the Council stated that Avigal was not an important company. Consequently, the evidence adduced by the Council concerning that company does not make it possible to assess its importance, either economically or in terms of influence.
109 It follows that the Council cannot rely on the applicant’s business interests in the IT sector, which are limited to Avigal’s operations, in order to consider that the applicant is a leading businessperson within the meaning of criterion (g).
110 As regards the part of the grounds to the effect that the applicant is close to the Russian Government, as is apparent from paragraph 79 above, the application of criterion (g) does not require the Council to prove links with the Russian Government. Consequently, the part of the grounds for listing to the effect that the applicant ‘is reported to be close to the Kremlin’ could be taken into consideration as a contextual factor, but cannot justify the inclusion of the applicant’s name on the lists at issue on the basis of criterion (g). The same is true of the Council’s argument that the applicant still has close links with leading economic and political players, as is allegedly shown by the applicant’s role in resolving a dispute between Turkey and Russia and the applicant’s contacts with the Turkish Foreign Minister.
111 Furthermore, the part of the grounds based on the applicant being resident in Russia is irrelevant under criterion (g). As is apparent from paragraph 64 above, the persons covered by criterion (g) must be regarded as being leading on account of their importance in the sector in which they are involved and the importance of that sector for the Russian economy. The place of residence has no bearing on the applicant’s status as a leading businessperson under criterion (g).
112 In the light of the factors set out above, it must be concluded that the Council has not adduced a set of indicia sufficiently specific, precise and consistent that are capable of demonstrating that the applicant was a leading businessperson involved in economic sectors which provided a substantial source of revenue to the Government of the Russian Federation on the date of adoption of the maintaining acts of March 2023.
113 In the light of all the foregoing considerations, the third plea in law must be upheld and, consequently, the contested acts must be annulled in so far as they concern the applicant, without it being necessary to examine the other pleas which he has raised.
114 As regards the Council’s contention raised in the alternative (see the second indent of paragraph 26 above) seeking, in essence, to have the effects of Decision 2023/572 maintained until the expiry of the period prescribed for bringing an appeal against the present judgment and, in the event of an appeal, until the decision ruling on that appeal, it is sufficient to note that Decision 2023/572 was effective only until 15 September 2023. Consequently, the annulment of that decision by this judgment has no effect on the period after that date, so that it is not necessary to rule on the question of maintaining the effects of that decision (see, to that effect, judgment of 21 December 2021, Klymenko v Council, T‑195/21, EU:T:2021:925, paragraph 113 and the case-law cited).
Costs
115 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 Council has been unsuccessful, it must be ordered to pay the costs, 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) 2022/582 of 8 April 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) 2022/581 of 8 April 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) 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 they concern Mr Farkhad Teimurovich Akhmedov;
2. Orders the Council of the European Union to pay the costs.
Delivered in open court in Luxembourg on 29 May 2024.
V. Di Bucci | | M. van der Woude |