Case T‑195/21
Oleksandr Viktorovych Klymenko
v
Council of the European Union
Judgment of the Court (Fifth Chamber), 21 December 2021
(Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds – List of the persons, entities and bodies covered by the freezing of funds and economic resources – Maintenance of the applicant’s name on the list – Council’s obligation to verify that the decision of an authority of a third State was taken in accordance with the rights of the defence and the right to effective judicial protection)
1. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures taken having regard to the situation in Ukraine – Freezing of funds of persons involved in the misappropriation of public funds and of natural or legal persons, bodies or organisations associated with them – Scope of the review
(Art. 275, second subpara., TFEU; Charter of Fundamental Rights of the European Union, Arts 47 and 48; Council Decision (CFSP) 2021/394; Council Regulation 2021/391)
(see paragraphs 65-67)
2. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Decision to freeze funds – Adoption or maintenance on the basis of judicial proceedings conducted by the authorities of a non-Member State in relation to the misappropriation of public funds or abuse of office by a public office-holder – Whether permissible – Condition – National decision adopted in accordance with the rights of the defence and the right to effective judicial protection – Council’s verification obligation – Obligation to state reasons – Scope – Non-Member State that has acceded to the European Convention on Human Rights – Irrelevant – Objective of the restrictive measures to support the rule of law and respect for human rights
(Art. 21, para. 2(b), TEU; Decision 2014/119/CFSP, as amended by Decision (CFSP) 2021/394, recital 2 and annex; Council Regulations No 208/2014, Annex I, and 2021/391)
(see paragraphs 69-74)
3. Acts of the institutions – Statement of reasons – Obligation – Scope – Essential formality distinct from the merits of the decision
(Art. 296 TFEU)
(see paragraph 77)
4. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Decision to freeze funds – Adoption or maintenance on the basis of judicial proceedings conducted by the authorities of a non-Member State in relation to the misappropriation of public funds or abuse of office by a public office-holder– Conditions – National decision adopted in accordance with the rights of the defence and the right to effective judicial protection – Obligation on the competent EU authority to establish, in the event of challenge, that the grounds held against the persons or entities concerned are well-founded – Council’s obligation to verify observance of the rights in question – Infringement
(Decision 2014/119/CFSP, as amended by Decision (CFSP) 2021/394, annex; Council Regulations No 208/2014, Annex I, and 2021/391)
(see paragraphs 79-87, 89-96, 100)
5. Common foreign and security policy – Restrictive measures taken having regard to the situation in Ukraine – Decision to freeze funds – Adoption or maintenance on the basis of a national fund-freezing decision of an authority of a non-Member State – Whether permissible – Condition – National decision adopted in accordance with the rights of the defence and the right to effective judicial protection – Council’s verification obligation – Proof of verification – Burden of proof
(Council Decision 2014/119/CFSP, as modified by Decision (CFSP) 2021/394; Council Regulations No 208/2014 and 2021/391)
(see paragraphs 97, 98)
6. EU law – Principles – Right to effective judicial protection – Duty to act within a reasonable time – Restrictive measures taken having regard to the situation in Ukraine – Judicial procedure in a non-Member country serving as the basis for the decision to adopt the restrictive measures – Council’s verification obligation – Scope
(Charter of Fundamental Rights of the European Union, Arts 47 and 52(3))
(see paragraphs 101-108)
Résumé
Following the suppression of demonstrations in Independence Square in Kiev (Ukraine) in February 2014, the Council of the European Union adopted, on 5 March 2014, Decision 2014/119/CFSP (1) and Regulation No 208/2014. (2) The purpose of those acts is, inter alia, to freeze the funds of persons identified as responsible for the misappropriation of public funds. The applicant had been included on the list of persons and entities covered by those measures on 14 April 2014, on the ground that he was the subject of preliminary investigations in Ukraine for offences related to the misappropriation of public funds and their illegal transfer outside Ukraine. The Council had subsequently extended that listing on several occasions, (3) on the ground that the applicant was the subject of criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets.
Following the adoption of Decision 2021/394 (4) and Regulation 2021/391, (5) by which the Council had extended the inclusion of his name on the list at issue on the same grounds against him, the applicant brought an action for annulment of those acts.
By its judgment, the General Court annuls those two acts in so far as they concern the applicant and recalls that it is for the Council, when it bases restrictive measures on decisions of a non-Member State, to satisfy itself that, when those decisions by the authorities of the non-Member State in question were adopted, the fundamental rights recognised by the Charter of Fundamental Rights of the European Union (‘the Charter’) and, more particularly, the rights of the defence and the right to effective judicial protection of the person concerned by those measures, were observed.
Findings of the Court
The Court notes, first of all, that the Courts of the European Union must review the lawfulness of all Union acts in the light of those fundamental rights. The EU courts must ensure, in particular, that the contested act has a sufficiently solid factual basis. In that regard, although the Council may base the adoption or the maintenance of restrictive measures on the decision of an authority of a non-Member State to initiate and conduct criminal investigation proceedings concerning an offence of misappropriation of public funds, it must verify that that decision was taken in accordance with the rights of the defence and the right to effective judicial protection. That obligation is all the more imperative given that the decisions adopted by the Council having regard to the situation in Ukraine were adopted as part of a policy to strengthen and support the rule of law and respect for human rights in that country.
Moreover, while the fact that a non-Member State is among the States which have acceded to the Convention for the Protection of Human Rights and Fundamental Freedoms (‘the ECHR’) entails review, by the European Court of Human Rights of the fundamental rights guaranteed by the ECHR, that fact cannot render superfluous the verification requirement on the part of the Council.
In the present case, the Court finds, in the first place, that the decisions of the investigating judge of the Petchersk District Court in Kiev of 1 March 2017 and 5 October 2018, which have already been the subject of judgments of the Court in Klymenko v Council (T‑295/19) and Klymenko v Council (T‑258/20), are not, in themselves, capable of establishing that the decision of the Ukrainian authorities to conduct the criminal proceedings, on which the maintenance of the restrictive measures is based, was taken in accordance with the rights of the defence and the right to effective judicial protection. Those decisions were taken, respectively, more than two and a half years and more than four years before the adoption of the contested acts. The Court then observes that, given that those decisions are procedural in nature, they are merely incidental in the light of the criminal proceedings which justified the inclusion and maintenance of the applicant’s name on the list. Lastly, the mere reference made by the Council to repeated statements made by the Ukrainian authorities concerning the applicant’s fundamental rights and the mere possibility of the applicant invoking an infringement of his rights before the Ukrainian courts cannot suffice in that regard.
The Court considers, in the second place, that the Council has also failed to demonstrate to what extent the information available to it concerning, in particular, the process of familiarisation of the defence in criminal proceedings and the judicial decisions relating thereto, led it to conclude that the protection of the rights in question was guaranteed. The Court notes that the Council merely accepted the laconic explanations given by the Ukrainian Prosecutor General’s Office, when the Ukrainian criminal proceedings were still at the preliminary investigation stage and the cases in question, concerning acts allegedly committed between 2011 and 2014, had not yet been brought before a court on the merits. In that regard, the Court refers to the ECHR (6) and the Charter, (7) according to which the principle of the right to effective judicial protection includes, inter alia, the right to a hearing with a reasonable time. The Court states that the European Court of Human Rights has already pointed out that the infringement of that principle may be established, in particular, where the investigation phase of criminal proceedings is characterised by a certain number of stages of inactivity attributable to the authorities responsible for that investigation or there is a lack of progress in the preliminary investigations. In that regard, where a person has been subject to the restrictive measures at issue for several years, on account of the same criminal proceedings brought in the relevant non-Member State, the Council is required to satisfy itself, prior to the adoption of the contested acts, that the right of that person to be heard within a reasonable time was respected. In view of the precautionary nature of the freezing of the applicant’s assets and the case-law of the Court on this subject, (8) it falls to the Council to ensure that such a measure is not extended unnecessarily, to the detriment of the applicant’s rights and freedoms, merely because the criminal proceedings on which it is based and which are still at the preliminary investigation stage have been left open, in essence, indefinitely. Therefore, the Council should, at the very least, have set out the reasons why, following an independent and thorough analysis of the evidence provided by the Ukrainian Prosecutor General’s Office and by the applicant, it took the view that those rights had been observed with regard to whether the applicant’s case had been heard within a reasonable time.
The Court concludes that it has not been established that the Council satisfied itself that the Ukrainian authorities complied with the applicant’s rights of defence and his right to effective judicial protection in the criminal proceedings on which the Council based its decision-making and, consequently, annuls Decision 2021/394 and Regulation 2021/391 in so far as they concern the applicant.