Venezuela as a third country before the ECJ

Tiago Paixão (Master’s in Administrative Law - The Author’s opinions are his own and do not bind any other person or entity)

The Bolivarian Republic of Venezuela (“Venezuela”) brought an action for annulment before the General Court to annul certain restrictive measures imposed by the Council of the European Union here. Those restrictive measures were imposed because of concerns about democracy, rule of law and human rights principles and are set out on Regulation 2017/2063, Regulation of Execution 2018/1653 and Decision 2018/1656.

Concretely, the General Court had to solve two major questions, before the substance of the annulment. On the one hand, to determine if Venezuela is a legal person for Article 263 TFUE and, in case of having given a positive answer, if Venezuela is directly affected by those measures.

In this essay we will focus on the first question as it is a key question to ECJ case law regarding the locus standi of what could be conceived as a third State. In fact, it is regarding the question of whether a third country, against which the Council of the European Union adopted restrictive measures, has locus standi to bring an action for the annulment of the Council Regulation implementing those measures.

1. Council

As defendant, the Council argued three grounds of inadmissibility: no interest in acting, the disposition(s) on abovementioned EU acts in crisis do not refer expressly to Venezuela and that Venezuela is not a legal person in the light of Article 263 (Opinion of the Advocate General, no. 15). As mentioned above, the focus is on the specific question of considering Venezuela as an applicant.

2. General Court

As the criteria are cumulative, the General Court appreciated, in the first place, the first ground and concluded that Venezuela had no interest in acting, judgment of 20 September 2019, Venezuela v Council (T‑65/18, EU:T:2019:649) v. no. 52. Therefore, there was no need to appreciate the second and the third grounds of inadmissibility and the General Court did not say anything about the question of understanding Venezuela as a third State.

3. Advocate-General

According to the Advocate General opinion here, any natural or legal person is entitled to effective judicial protection of the rights they derive from the EU legal order. To get this conclusion, it was necessary to invoke an important principle of EU law, which is enshrined on the Charter of Fundamental Rights Article 47 and on Article 19 (1) TEU, the principle of “ubi ius ibi remedium”.

According to this principle, the right to react against a measure is a fundamental right. Thus, Venezuela must have locus standi in order to defend itself against measures. However, it must be stressed out that the criterion of direct effect must be fulfilled. Logically, a third country must have the ability to react against measures that affect him directly.

4. ECJ

The decision of the ECJ here, ruled that Venezuela may be regarded as a legal person within the meaning of Article 263, 4th paragraph, of TFEU. On one hand, there is no literal element that prevents that conclusion. On the other hand, using a teleological interpretation, in light of the State governed under the principle of the rule of law, founded by the principle of effective judicial review, a third state must have legal standing before the court.

In addition, the ECJ ruled that the measure directly affects the legal situation of Venezuela because it was a restrictive measure that prevented Venezuela from obtaining goods and services.

The question was to know if Venezuela could be assimilated into an economic operator, similarly to the Almaz-Antey case law (judgment of 13 September 2018, Almaz-Antey Air and Space Defence v Council).

The action for annulment was brought by the government of a country that is expressly targeted by the restrictive measures. Following this rationale, the ECJ did not follow a narrow interpretation of the criterion of direct concern, in a way that could consider Venezuela as an economic operator. Venezuela has a very wide range of competencies that distinguish her from the latter. It is possible to conclude that it was a logical evolution of the case law.

It is important to bear in mind that the possibility of being a part of the judgment is slightly different from the question to know if the restrictive measure is lawful or not. In addition to this, the case law of the Union states that the obligation to ensure the respect of the rule of law is not dependent on reciprocity. This is very important, so the Union can be an example to third States where, allegedly, occurs breaches on human rights and encroachment of rule of law.

So, following the request of Venezuela, the ECJ ruled that the action brought by Venezuela is admissible because Venezuela is a legal person, which had restrictive measures with direct effects upon her directly and referred the case back to General Court to rule the case substantial question. To better understand this admissibility turnover, the Court understood that restrictive measures which affect economic operators of the Union are equivalent to restrictive measures which affect Venezuela, because both produce the same effect – prohibition of acquiring goods and services.

To sum up, there was also another important step on the reasoning of the court related to the question of the nature of the measure. Regulation 2017/2063 – “since it was adopted on the basis of Article 215 TFEU and, accordingly, under the non-legislative procedure laid down in that provision, cannot be regarded as a legislative act”, judgment of 22 June 2021,  Venezuela v Council, (C-872/19 P, EU:C:2021:507), no. 92, leads to the conclusion, that it should be perceived as a regulatory act, so it’s within the scope of application of Article 263. Furthermore, this third State does not need to demonstrate that those Articles of Regulation 2017/2063 are individually concerning.

5. Koen Lenaerts position and Case C-70/04 Confédération suisse

As mentioned above, although it was a novel question to the case law of the Union, there was already some theoretical approach to the question before which could be used as a clue. Lenaerts wrote that there was a great chance of the ECJ would accept third countries as legitimate[1]. Thus, the Court followed its President’s position by having decided in favor of it.

In addition, in Confédération suisse, the ECJ ruled that: “Le principe d’égalité des armes confirmerait cette interprétation puisqu’il implique que la Confédération suisse doit disposer des mêmes voies de procédure qu’un État member”. It is noteworthy to conclude that it is a judgment imbedded by a sense of fairness. In addition, although they are slightly different, there are some other well-known cases:Kurdistan Workers’ Party – PKK; Al Aqsa – an international charity with alleged ties to Palestinian militants; Liberation Tigers of Tamil Eelam – LTTE where the Court had to decide about restrictive measures but with the specificity that these cases are related to entities which are not States.

6. Conclusions

It was a novel question decided by the ECJ, contrasting the previous decision of the General Court but in line with the opinion of the Advocate General. The decision followed a previous case law related with Swiss Confederation, is in line with the Lenaerts’ position and finds its grounds on many important processual principles, such as the principle of “ubi ius ibi remedium”, the principle of effective judicial review and the principle of equality of arms.

Finally, the judgment had the practical effect of opening the scope of Article 263 and now it can be invoked by any other third State, even if the restrictive measures are applied to individual persons, as set on Almaty case law.

[1] Lenaerts, Koen, (et al.) EU Procedural Law, Oxford University Press, Oxford, 2014, p. 313, footnote 315.

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