Summaries of judgments made in collaboration with the Portuguese judges and référendaire of the General Court (Maria José Costeira, Ricardo Silva Passos and Esperança Mealha)

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Judgment of the General Court (First Chamber, Extended Composition), 15 November 2023, Case T-193/22, OT v Council of the European Union

Facts

Following the military aggression perpetrated by the Russian Federation (‘Russia’) against Ukraine on 24 February 2022, the Council of the European Union (‘the Council’) adopted several acts by which it added the applicant’s name to the lists of persons, entities and bodies supporting actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, adopted by the Council since 2014.

The Council imposed on the applicant, OT, a businessman of Russian nationality, the freezing of his banking funds and assets, in accordance with Article 2(1) (d) and (g) of Decision 2014/145/CFSP of 17 March 2014[1], on the ground that, he is a major shareholder of the Russian conglomerate ‘Alfa Group’, one of Russia’s largest taxpayers. As such, the applicant is considered to be one of the most influential persons in the country and has links with the Russian President. According to the Council, Vladimir Putin rewarded the Alfa Group for its loyalty to the Russian authorities.

Those measures were extended in respect of the applicant by Decision 2022/1530/CFSP[2] and Regulation 2022/1529 of 14 September 2022[3] for the same reasons.

The applicant brought an action against the acts adopted by the Council, which the General Court (GC) dismissed in its entirety. In his action, the applicant raises a plea of illegality, manifest errors of assessment, in particular as regards the evidence submitted by the Council, the use of the same criterion in order to maintain the applicant’s name on the list, and an infringement of the principles of proportionality, right to property, and freedom to conduct a business.

Decision

Firstly, as regards the plea of illegality relating to Article 1, (d) and (g) of Regulation 2022/330 of 25 February 2022[4], the applicant alleges the infringement of the principle of legal certainty and complains that the Council used inappropriate criteria in the light of the objectives of the restrictive measures.

The GC points out that it is clear from the wording of the article that criterion (d) applies selectively to persons who, even not having a link with the destabilisation of Ukraine, provide material or financial support to Russian decision-makers responsible for it or derive benefits from such decision-makers. The GC adds that such criterion does not require that the persons or entities concerned personally benefit from the annexation of Crimea or the destabilisation of Ukraine.

As regards to criterion (g), the GC found that its wording targets in a sufficiently clear and precise manner the leading entrepreneurs active in sectors that provide a substantial source of income to the Russian government. Thus, the persons targeted can be considered influential because of their importance in their sector of activity and the importance of this sector for the Russian economy. The GC also points out that those criteria, interpreted in the light of the legislative and historical context in which they were adopted, are not manifestly inappropriate considering the objective of the measures, the paramount importance of maintaining peace and European and global security and stability. Consequently, the GC rejects the arguments relating to that plea of illegality.

In the second place, regarding the plea alleging a manifest error of assessment of the evidence submitted in the context of criterion (g), the Court recalls that the activity of the Courts of the European Union is governed by the principle of the unfettered assessment of evidence, which must be assessed in the light of its credibility, of the account it contains and, in particular, to the person from whom the document originates, the circumstances in which it was adopted and its addressee, and by determining whether such a document appears to be sound and reliable. Furthermore, the GC points out that the conflict situation in Ukraine may make it particularly difficult to have access to the primary source of certain information, and to the collection of testimonies, and points out that the ensuing investigative difficulties may prevent the submission of precise evidence and objective information. In the light of those considerations, the Court concludes in the present case that the probative value of the documents produced by the Council cannot be denied.

As regards the second part of the plea, the GC states that the plea must be regarded as referring to an error of assessment of the facts in the light of criterion (g), and not to a ‘manifestly’ erroneous assessment of those facts. In that context, the GC states that judicial review must be effective and is based, inter alia, on the verification of the facts alleged in the statement of reasons on which the decision at issue is based. Furthermore, the assessment of the grounds relied on against the person concerned must be carried out by examining the evidence and information in its context. The Council thus respected the burden of proof in providing the Court with a set of indicia which are sufficiently specific, precise and consistent to establish the existence of a sufficient link between the entity subject to a measure freezing its funds and the regime or, in general, the situations addressed.

In the third place, as regards the initial listing of the applicant on the basis of criterion (g), the GC observes that that criterion uses the concept of ‘leading businesspersons’ in connection with the exercise of an ‘activity in economic sectors providing a substantial source of income to the (Russian) Government’, and not another condition relating to a direct or indirect link with that government. Thus, the GC concludes that criterion (g) does not require the Council to demonstrate the existence of close links or interdependence with the Government of Russia, nor does it depend on the imputability to the applicant of the decisions relating to the continuation of the conflict in Ukraine or on a direct or indirect link with the destabilisation of that country.

In those circumstances, the GC finds that the Council did not commit an error of assessment in considering the applicant to be a ‘leading businessperson’ by classifying him, inter alia, as a ‘large shareholder of the Alfa Group’ conglomerate, even though the latter had transferred his shares in that company. In the light of criterion (g), the concept of ‘leading businessperson’ refers to factual elements which relate both to the past and at the material time, with the result that the grounds for listing the applicant may refer to a factual situation which existed before the adoption of the initial acts and which was amended without necessarily implying the obsolescence of the restrictive measures adopted on that basis.

In addition, as regards the argument concerning the retention of the applicant’s name on the lists on the basis of the same criterion, the GC states that, in order to justify such maintenance, the Council may, when reviewing the restrictive measures periodically, rely on the same evidence as those which justified the initial listing, in so far as the grounds for listing remain unchanged and the context has not changed in such a way as to render those elements obsolete. In the present case, the Court observes that the alleged transfer of the applicant’s shares in the company in question was not substantiated by sufficiently convincing evidence in the proceedings before the GC. Consequently, the Council was entitled to take the view that the applicant’s individual situation had not evolved since his initial inclusion on the lists at issue.

Finally, as regards the alleged infringements of the principle of proportionality, the right to property, the freedom to conduct a business and the right to pursue an occupation alleged by the applicant, the GC finds that the disadvantages caused to the applicant in that regard are not disproportionate to the importance of the objective pursued by the contested acts.

Consequently, the GC dismisses the action in its entirety.

Judgment of the General Court (First Chamber, Extended Composition), 20 December 2023, Case T-313/22, Abramovich v Council

Mr Roman Arkadyevich Abramovich is a businessman of Russian, Israeli and Portuguese nationalities. He is, in particular, the majority shareholder in the parent company Evraz, one of the leading Russian groups in the steel and mining sector. That sector provides a substantial source of revenue to the Russian Government. 

Following the attack launched by Russia against Ukraine on 24 February 2022, the Council, inter alia, froze the funds of, and prohibited entry into or transit through the European Union to, leading businesspersons who engage in activities in economic sectors providing a substantial source of revenue to the Russian Government.

These restrictive measures are aimed at increasing pressure on Russia and the cost of the latter’s actions in undermining the territorial integrity, sovereignty and independence of Ukraine. 

Mr Abramovich challenges, before the General Court of the European Union, the inclusion and maintenance of his name on the lists of persons and entities subject to those measures. Furthermore, he seeks compensation in respect of harm to his reputation, which he provisionally estimates at €1,000,000. 

The General Court dismisses the action brought by Mr Abramovich, thereby upholding the restrictive measures taken against him.

The Council did not in fact err in its assessment by deciding to include then maintain Mr Abramovich’s name on the lists at issue, in the light of his role in the Evraz group and, in particular, its parent company. 

The Court observes, furthermore, that the inclusion and maintenance of Mr Abramovich’s name on the lists at issue do not constitute an unjustified and disproportionate infringement of his fundamental rights, which include, in particular, the right to respect for private and family life, the freedom to conduct a business and free movement. In that connection, the General Court recalls, in particular, that EU law provides for the possibility of authorising the use of frozen funds in order to meet essential needs and of granting specific permissions allowing funds or other economic resources to be released. 

In so far as concerns, more specifically, the alleged infringement of the right of Mr Abramovich, as a Portuguese and, therefore, EU national, to move freely on the territory of the European Union, the General Court rejects his arguments alleging disproportionate infringement of that freedom as unfounded. 

Since Mr Abramovich has failed to demonstrate that the inclusion and maintenance of his name on the lists were unlawful, his claim for compensation is also dismissed.

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[1] Council Decision 2014/145/CFSP of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2022 L 78, p. 16)

[2] 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).

[3]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).

[4]Council Regulation (EU) 2022/330 of 25 February 2022 amending 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 51 p. 1). According to Article 1:

“(…) 1. Annex I lists (…)

(d) natural or legal persons, entities or bodies supporting, materially or financially, or benefiting from Russian decisionmakers responsible for the annexation of Crimea or the destabilisation of Ukraine;

(…)

(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.’