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IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities. The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice. This electronic version is not authentic and is subject to amendment.

11/10/2011 19:13:19.566C03762010GCENL_Cnc_Mess_Fr.xmlTRA-DT-FR-CONCL-C-0376-2010-201108609-01_00.xmlCNCPVLitige0DEFÉDITION PROVISOIRE DU 21/07/20111Texte pour publication00-0Document21C:\TEMP\canevas\Litige.xml10/27/20110CNC§171;pos=88165:lng=ENBDU@0000-00-0000-00-TRA-DOC-EN-CONCL-C-0376-2010-201108609-05_00Doc2XML SUIVI2 TRAD Prod 2003C:\Program Files\Doc2XML\XML\Serveur_SUIVI2_TRAD.xmlO:\Flux\Suivi_II\conversion\doc2xml_trad\In\UNCLASSIFIEDNormalIREC()Doc2XML TRAD 2003C:\Program Files\Doc2XML\xml\Serveur_TRAD.xmlO:\Flux\Conversion\doc2xml\In\OPINION OF ADVOCATE GENERAL

MENGOZZI

delivered on 29 November 2011 (2)

Case C-376/10 P

Pye Phyo Tay Za

Council of the European Union

(Appeal – Restrictive measures against Burma/Myanmar – The appellant’s inclusion in the list of persons, groups and entities to which those provisions apply)

Table of contents

I – Background to the dispute and the judgment under appeal

II – Procedure before the Court of Justice and the forms of order sought by the parties

III – Legal analysis

A – The first plea, alleging an error of law in the interpretation of the legal bases for Regulation No 194/2008

1. Arguments of the parties.

2. Analysis

B – The third plea, alleging infringement of the rights of the defence

1. Arguments of the parties

2. Analysis

a) The preliminary question concerning the possibility of relying on the rights of the defence

b) The alleged infringement of the right to the prior notification of reasons and the right to a prior hearing (first limb of the third plea)

c) The alleged infringement of the right to effective judicial protection (second limb of the third plea)

d) The question of notification (third limb of the third plea)

C – The second plea, alleging infringement of the obligation to state the reasons on which the contested regulation is based

1. Arguments of the parties

2. Analysis

D – The fourth and final plea, alleging infringement of the right to property and the principle of proportionality

1. Arguments of the parties

2. Analysis

IV – The action before the General Court

V – Costs

VI – Conclusion

1. This appeal, brought by Mr Pye Phyo Tay Za (‘Mr Tay Za’ or ‘the appellant’), a Burmese national, seeks to have set aside the judgment in Pye Phyo Tay Za v Council (3) (‘the judgment under appeal’), by which the General Court of the European Union dismissed the appellant’s application for annulment of Council Regulation (EC) No 194/2008 of 25 February 2008 renewing and strengthening the restrictive measures in respect of Burma/Myanmar and repealing Regulation (EC) No 817/2006 (4) (‘the contested regulation’) in so far as the appellant’s name appears in the list of persons to whom that regulation applies.

2. The Court is asked to give a ruling on the conditions under which a system of sanctions introduced by the Council of the European Union against a third country may apply to natural persons, and on how close the link between those persons and the governing regime has to be. This appeal thus raises a number of important questions, including in relation to the guarantees provided by the European Union (EU) legal system with respect to the rights of defence on which the persons affected by a measure freezing funds may rely in such circumstances.

I – Background to the dispute and the judgment under appeal

3. For a detailed account of the legal context, reference is made to paragraph 1 et seq. of the judgment under appeal.

4. This dispute originated in the action taken by the EU against Burma from 1996 onwards. (5) At that time, the EU’s action was motivated by the failure of that third country to make progress towards democracy and by the existence of persistent violations of human rights. The restrictive measures decided upon by the EU were not only regularly maintained but also reinforced. The Council then decided that the funds and economic resources (‘the funds’) of persons who define or implement policies preventing the transition to democracy or who benefit from them were to be frozen. (6) At that time, the list of persons affected by those freezing measures consisted largely of the names of military personnel.

5. The initial common position was repealed by Council Common Position 2003/297/CFSP of 28 April 2003 on Burma/Myanmar (7) in order to replace it with a more extensive system of sanctions. The sanctions provided for were at that time intended to apply to other members of the military regime, the economic interests of that regime and other persons defining, implementing or benefiting from the policies impeding the transition to democracy. The sanctions also extended to the family members of the persons identified, (8) though the family members were not recorded by name in the list annexed to the common position. On the basis of that common position, the Council adopted Decision 2003/907/CFSP of 22 December 2003 implementing Common Position 2003/297, (9) in the annex to which the appellant’s first name, surname and date of birth appeared for the first time.

6. Following that decision, Council Common Position 2004/423/CFSP of 26 April 2004 renewing restrictive measures against Burma/Myanmar (10) not only listed the members of the military regime and the persons considered by the Council to be associated with it but also included three columns entitled ‘Spouse’, ‘Children’ and ‘Grandchildren’ respectively. More specifically, the part of the annex devoted to ‘[p]ersons who benefit from government economic policies’ gave the name of the appellant’s father, that of the latter’s wife and the names of three children, including the appellant. Council Common Position 2005/340/CFSP of 25 April 2005 extending restrictive measures against Burma and amending Common Position 2004/423/CFSP (11) confirmed the listing of the appellant, his father and his father’s wife. (12)

7. The Council, noting the lack of progress towards national reconciliation, respect for human rights and democracy, regularly renewed or extended restrictive measures against the Union of Burma, in particular in Common Positions 2007/248/CFSP, (13) 2007/750/CFSP (14) and 2008/349/CFSP. (15)

8. Pursuant to Article 5(1) of Common Position 2006/318/CFSP renewing restrictive measures against Burma/Myanmar (OJ 2006 L 116, p. 77), as amended by Common Position 2007/750, ‘all funds and economic resources belonging to, owned, held or controlled by the individual members of the Government of Burma/Myanmar and belonging to, owned, held or controlled by the natural or legal persons, entities or bodies associated with them as listed in Annex II shall be frozen’.

9. Annex II to Common Position 2006/318 as amended by Common Position 2008/349, under heading J, ‘Persons who benefit from government economic policies and other persons associated with the regime’, gives the appellant’s name (J1c), his date of birth and the information that he is the son of Tay Za, who is himself listed under entry J1a. It should be noted that the appellant’s father’s wife is also listed (J1b), as is the appellant’s grandmother (J1e). The personal information states in particular that the appellant’s father is the managing director of Htoo Trading Company.

10. In so far as the European Community’s powers were involved in the introduction of the restrictive measures defined in the various common positions mentioned above, and in particular the freezing of funds, the Council adopted a series of acts implementing those common positions. It was in this context that the contested regulation was adopted, which implemented the restrictive measures provided for in Common Positions 2006/318 and 2007/750. The contested regulation was adopted on the basis of Articles 60 and 301 EC. It entered into force on the day of its publication in the Official Journal of the European Union, that is to say, 10 March 2008.

11. Article 11(1) of the contested regulation provides that ‘all funds and economic resources belonging to, owned, held or controlled by the individual members of the Government of Burma/Myanmar and to the natural or legal persons, entities or bodies associated with them, as listed in Annex VI, shall be frozen’.

12. Articles 12 and 13 of the contested regulation specify the conditions under which, by way of exception and in exhaustively listed cases, the making available, release or use of funds or economic resources may be authorised.

13. Annex VI to the contested regulation is entitled ‘List of members of the Government of Burma/Myanmar and persons, entities and bodies associated with them referred to in Article 11’. Heading J lists ‘persons who benefit from government economic policies’. (16) Entry J1a contains the name of the appellant’s father. The appellant himself is listed under entry J1c; by way of personal information, it is stated that he is the son of Tay Za (J1a); his date of birth and sex are also mentioned. Heading J of Annex VI to the contested regulation also contains the names of the father, the father’s wife and the appellant’s paternal grandmother. (17)

14. On 11 March 2008, the Council published a notice for the attention of the persons and entities appearing in the lists provided for in Articles 7, 11 and 15 of the contested regulation. (18)

15. Commission Regulation (EC) No 353/2009 of 28 April 2009 (19) amended Annex VI to the contested regulation; however, that amendment did not concern the particulars relating to the appellant, which were reproduced unchanged.

16. By application lodged at the Registry of the General Court on 16 May 2008, Mr Tay Za brought an action for annulment of the contested regulation and claimed – in the adapted and amended forms of order sought by him (20) – that the General Court should annul the contested regulation in so far as it concerns him (21) and order the Council to pay the costs.

17. First, the appellant claimed that the contested regulation lacked any legal basis; his second plea alleged a failure by the Council to comply with its obligation to state reasons; the third plea alleged an infringement of the appellant’s fundamental rights, in this instance, the right to a fair hearing, the right to effective judicial protection and the right to property, and breach of the principle of proportionality; in his fourth and final plea, the appellant claimed breach of the principles of law deriving from the criminal law nature of the imposition of the freezing of assets and breach of the principle of legal certainty.

18. In the judgment under appeal, the General Court dismissed all the pleas and ordered the appellant to pay the costs incurred by the Council.

II – Procedure before the Court of Justice and the forms of order sought by the parties

19. On 27 July 2010, Mr Tay Za lodged an appeal against the judgment at issue. The appellant claims that the Court should set aside the judgment under appeal in its entirety, declare that the contested regulation is null and void in so far as it concerns him, and order the Council to pay the costs of this appeal and of the proceedings before the General Court.

20. In its response, the Council contends that the Court should dismiss the appeal and order the appellant to pay the costs.

21. In its response, the United Kingdom of Great Britain and Northern Ireland, intervener at first instance in support of the Council, contends that the Court should dismiss the appeal.

22. The European Commission, intervener at first instance in support of the Council, contends in its response that the Court should rule that none of the pleas raised by the appellant is such as to reverse the judgment under appeal and, in consequence, dismiss the appeal and order the appellant to pay the costs.

23. The parties presented oral argument at the hearing before the Court on 6 September 2011.

III – Legal analysis

24. In his appeal, the appellant puts forward four pleas. The first seeks to challenge the interpretation given by the General Court of Articles 60 and 301 EC and the conclusion it draws from this with respect to the adequacy of the legal basis for the contested regulation. The second alleges infringement of the obligation to state reasons. The third seeks to challenge the interpretation given by the General Court of the rights of the defence. Finally, the fourth challenges the General Court’s assessment to the effect that the measure imposed on the appellant is a proportionate infringement of his right to property.

25. In so far as I intend to suggest that the Court uphold the first plea, the other three pleas will be analysed only in the alternative. For reasons of logical sequence, I shall begin the alternative analysis by examining the third plea.

A – The first plea, alleging an error of law in the interpretation of the legal bases for Regulation No 194/2008

1. Arguments of the parties.

26. The appellant complains that the General Court unduly places on him the burden of rebutting the presumption that members of the families of persons who benefit from the economic policies of the Burmese Government themselves benefit too from those policies. He submits that the interpretation that the General Court gives of Articles 60 and 301 EC is contrary to the criteria established by the Court in Kadi and Al Barakaat International Foundation v Council and Commission (‘Kadi’) (22) and that the link between the appellant and the Burmese regime is not sufficient to form a legal basis for the freezing of his assets. He goes on to say that, even when the Council names categories of persons or entities, it must conduct an individual examination of each situation, furnish evidence and state the reasons why the person or entity in question is listed. The 2005 guidelines on the implementation and evaluation of restrictive measures (23) asked the Council to list adult children over the age of 18 years only on the basis of their own responsibility for the policies which the European Union sought to combat. In any event, the appellant submits that the Council has never stated those reasons or justified the appellant’s listing by reference to a presumption that the latter was able to rebut. The appellant points out, next, that the facts already set out in the judgment under appeal, in particular that he did not hold any shares in his father’s two companies either in 2003 – when he was first targeted by the restrictive measures – or in 2008 – that is to say, when the contested regulation was adopted. Finally, even though Articles 60 and 301 EC authorised the Community to impose an embargo that would itself have affected the entire population of Burma, the appellant submits that, as soon as the Community’s action takes the form of targeted sanctions, the Council must check that they do not concern persons unconnected with the regime in question.

27. Conversely, the Council considers that the judgment under appeal is free from any error of law. Articles 60 and 301 EC constitute adequate legal bases for the contested regulation, for the latter is indeed directed against a third country. The General Court correctly applied the judgment in Kadi in considering that there was a presumption to the effect that members of the families of persons who benefit from the economic policies of the Burmese regime themselves benefit from those policies and present a risk that the restrictive measures will be circumvented justifying their listing. The appellant was included in the list of persons whose assets must be frozen on the ground that he falls within a category established by the Council, not on an individual basis. In addition, the Council contends that the appellant relied on an obsolete version of the guidelines concerning the implementation of restrictive measures under the common foreign and security policy (CFSP). The appellant is indeed associated with the Burmese regime and the extension of the restrictive measures to family members was adequately explained in the common position and in the contested regulation. The appellant cannot therefore claim to be unaware of the context within which the contested regulation was adopted and the reasons for his listing. The Council also explains that the aim of that extension is to increase the pressure on the governing regime and states that it was in his capacity as his father’s son that the appellant was considered to benefit personally from the government’s illegal action. None the less, he can always demonstrate to the Council that he has dissociated himself from his father in order to have his name removed from the list. The appellant has not as yet put forward any argument to that effect. Finally, the Council submits that, in the main, it is the close family of the persons listed who present the greatest risk that the restrictive measures adopted against those persons will be circumvented.

28. The Commission considers that the plea put forward by the appellant contains an inappropriate combination of matters of fact and law. The question whether persons associated with the rulers of a third country may be the subject of restrictive measures is a point of law already disposed of by the Court in Kadi. In contrast, the question whether the appellant himself is associated with the Burmese regime and whether he has sufficient links with that regime is a matter of factual assessment which it is not for the Court to call in question, unless the appellant has succeeded in demonstrating a material inaccuracy or distortion of the evidence. In the alternative, the Commission submits that the General Court did not commit any error of law in endorsing the presumption that family members benefit from the functions exercised by leading business figures in Burma and that they too must be listed in order to safeguard the effectiveness of the restrictive measures. Moreover, the appellant’s inability to rebut that presumption is also based on a factual assessment which falls outside the Court’s power of review and the appellant attempts, improperly in the context of an appeal, to introduce a new factual element based on the consideration that his father’s companies in which he himself was a shareholder between 2005 and 2007 did not have any operational activities in Burma.

29. The United Kingdom, which confined its intervention to the present plea, points out that the listing of the appellant’s father has not been challenged. Taking up arguments similar to those of the Council and the Commission, it considers that the legal basis of the contested regulation is appropriate and that the judgment in Kadi was duly applied by the General Court. Furthermore, it is entirely legitimate to take the view that the family members themselves benefit from the economic policies of the Burmese regime, particularly with a view to safeguarding the effectiveness of the restrictive measures. The fact that only close family members are affected demonstrates a proportionate approach on the part of the Council.

30. The Council, the United Kingdom and the Commission therefore contend that the first plea should be dismissed.

2. Analysis

31. The first point to make is that a number of arguments in debate under this first plea, such as the reversal of the burden of proof or the lack of adequate information on the reasons why the appellant was included in the list of persons whose assets must be frozen, do not have any direct bearing on the question of the legal basis. Consequently, the analysis that follows will look only at the arguments concerning the adequacy of Articles 60 and 301 EC as a legal basis for the contested regulation, these being more consistent with the heading which the appellant himself gave to his first plea.

32. Next, the Commission’s argument that the present plea raises a question of fact, not law, must be dismissed. On the contrary, the question raised is whether the General Court correctly applied the interpretation given by the Court of Justice of Articles 60 and 301 EC. In other words, the issue is whether the members of the families of persons benefiting from the economic policies of the Burmese regime may be the subject of restrictive measures set out in a regulation adopted on the basis of Articles 60 and 301 EC. The question is therefore an eminently legal one which the Court must examine in this appeal.

33. As the parties have pointed out, in Kadi, the Court stated that, ‘having regard to the wording of Articles 60 EC and 301 EC, especially to the expressions “as regards the third countries concerned” and “with one or more third countries” used there, those provisions concern the adoption of measures vis-à-vis third countries, since that concept may include the rulers of such a country and also individuals and entities associated with or controlled, directly or indirectly, by them […]. To accept the interpretation of Articles 60 EC and 301 EC […], that it is enough for the restrictive measures at issue to be directed at persons or entities present in a third country or associated with one in some other way, would give those provisions an excessively broad meaning and would fail to take any account at all of the requirement, imposed by their very wording, that the measures decided on the basis of those provisions must be taken against third countries’. (24)

34. The line of argument put forward by the Council and the parties intervening in its support is that, the contested regulation clearly being directed against the Burmese regime, Articles 60 and 301 EC provide an adequate legal basis for it. Such an argument meets only some of the criteria laid down in Kadi, for, while it is true that the restrictive measures adopted on that basis must be directed against a third country, this does not exempt the Council, in cases where the action by the Community against a third country takes the form of restrictive measures against natural persons, from the obligation to target only persons capable of corresponding to the Court’s definition of ‘rulers’ or ‘persons associated’ with them.

35. Is it any more satisfactory to argue that the Community has the power, under Articles 60 and 301 EC alone, to introduce a total trade embargo which would be applicable to the entire population of the third country targeted by the Community’s action and that, therefore, a fortiori it certainly may adopt the restrictive measures at issue on the basis of those articles? I do not think so. The measures in question are generally presented as ‘smart sanctions’, because targeted, their whole purpose being to limit the undesirable effects of international sanctions on persons who are already suffering or who are not responsible for the situation in the third country concerned. Consequently, when the Community chooses to act by way of targeted restrictive measures, it is for the institutions, under the supervision of the judicature, to ensure that the persons against whom those measures were adopted have sufficient links with the regime in question to be classified as ‘rulers’ or ‘persons associated’ with rulers. Any other approach would effectively give the institutions carte blanche, inasmuch as they could thus inflict restrictive measures on any person or category of persons on the pretext that they could, after all, just as easily impose a total trade embargo. Consequently, while I concur with the a fortiori reasoning applied by the General Court in paragraph 70 of the judgment under appeal, I do so only on condition that it is strictly confined to the Burmese rulers and the persons associated with them. I am more doubtful about the assertion contained in that paragraph to the effect that members of the families of leading business figures in Burma fall within the category of ‘persons associated’ with the Burmese regime.

36. In the judgment under appeal, the General Court considered that the appellant had a sufficient, albeit indirect, link with the Burmese rulers because he is the son of a Burmese businessman whose commercial activities in that country prosper only because he enjoys advantages granted by the governing regime. (25) The General Court pointed out that that indirect link with the governing regime was the reason for entering the appellant in the list of persons whose assets must be frozen. The General Court thus held that ‘it may be presumed that [family members of such leading business figures] benefit from the functions exercised by those businessmen, so that there is nothing to prevent the conclusion that such family members also benefit from the economic policies of the government’. (26) According to the General Court, however, that presumption can be rebutted if the person concerned demonstrates that he does not have a close link with the businessman who is part of his family. (27)

37. The General Court’s assessment calls for three sets of observations.

38. On the one hand, the presumption established in paragraph 67 of the judgment under appeal seems to have been created ex nihilo by the General Court, for neither Common Position 2007/750 nor the contested regulation refers to any such presumption. It should be pointed out in this regard that the comparison which the Council and the Commission sought to draw, at the hearing, with the situation in Melli Bank v Council (28) is indisputably limited. That pending case concerns a review of the legality of a decision to freeze the funds of a subsidiary wholly owned by an entity which was itself listed on account of its sworn support for the policy of nuclear proliferation in Iran, when there was no evidence of any such support on the part of the subsidiary. In other words, the subsidiary was listed only because it is wholly owned by its parent company and there is a not insignificant – albeit necessarily presumed – risk that the parent company might, by means of its subsidiary, be able to circumvent the restrictive measures applicable to it. In that case, however, the presumption was borne out by the General Court’s establishing that the parent company had the power to appoint the directors of its subsidiary, which power conferred a subordinate role on the subsidiary and was such as to cast legitimate doubt on the subsidiary’s ability either to pursue a fully independent economic and commercial policy or to resist any pressure that the parent company might exert on it with a view to circumventing the restrictive measures applicable to it. First, in that judgment, the General Court had not confined itself to making a presumption but had gone much further by ascertaining that the risks actually existed. Secondly, it seems to me that the link in question in the present case, that between the appellant and his father, is different in kind from the purely legal/economic link between a parent company and its subsidiary. Moreover, presumptions should be used very sparingly in relation to natural persons.

39. On the other hand, with respect to the use of Articles 60 and 301 EC as against natural persons, I have already put forward the idea that the term ‘third countries’ must not be understood from a purely formal point of view but also from a substantive perspective, taking into account the fact that public policies are quite clearly, and increasingly, given effect by the action, support or complicity of persons or entities with a personality separate from that of the third country targeted, but with a link to the State and to the public policies that it pursues sufficient to be capable of forming the subject of the restrictive measures which actually concern the third country itself. (29) In the present case, it is already apparent, from an assessment by the Council which there is no reason to call in question, that the appellant’s father is associated with the Burmese regime but does not, for all that, belong to the government itself. His status as a ‘person associated’ with the Burmese regime follows from the real benefits which the two undertakings which he directs derive from Burma’s economic policies, and it is in this sense that there appears to be a sufficient link between him and the aforementioned regime. None the less, with regard still to the appellant’s father, that link, although sufficient, is primarily indirect, since he is described as the passive beneficiary of economic policies on which he does not himself decide. According to the analysis by the General Court, however, the appellant’s listing is based only on the presumption that the son of a person who benefits from the economic policies of the Burmese regime also benefits from those policies himself.

40. In other words, this appeal involves three categories of natural persons to whom the restrictive measures are addressed; these may be more easily understood if they are represented as three concentric circles. The first circle comprises the rulers themselves, that is to say the members of the government or other persons who have real decision-making power and therefore hold preeminent political responsibility for the situation which the European Union aims to combat. According to Annex VI to the contested regulation, these are the members of the State Peace and Development Council, regional commanders, deputy regional commanders, ministers, deputy ministers, other tourism-related appointments, senior military officers, military officers running prisons and the police, and senior Union Solidarity and Development Association office-holders. (30) The second circle comprises persons associated directly or indirectly with the rulers belonging to the first circle; these may be members of the rulers’ families (31) but also persons who benefit from the economic policies. (32) The third circle then comprises the family members of persons who benefit from the economic policies, in connection with whom the Council does not take account of any direct or indirect responsibility in the decision-making process, or even in the enjoyment of benefits by the members of the second circle. To continue the metaphor, this third circle seems to me to be too remote from the decision-making centre for it to be the subject of restrictive measures adopted solely on the basis of Articles 60 and 301 EC.

41. For the very reason that this case concerns natural persons and, furthermore, because I consider it unfair to make an individual bear the serious consequences of being a member of his own family, about which, ultimately, he cannot really do anything, the Court ought to find, in the light of what the guidelines on implementation and evaluation of restrictive measures once advocated, (33) that adult children of persons who benefit from the economic policies of a third-country regime which the European Union intends to take measures to combat should not be targeted by restrictive measures solely on account of their maternal or paternal parentage but on the basis of their own responsibility for the policies or actions in question. The causal link between the appellant and the situation in the third country which justifies the adoption of restrictive measures against that country is too tenuous for the freezing of his assets to be based solely on Articles 60 and 301 EC.

42. For evidence in support of that view we need look no further than the reasons for the adoption of Common Position 2007/750 and, then, the contested regulation. Common Position 2007/750 referred to the ‘brutal repression perpetrated by Burmese authorities against peaceful protestors and the continuing serious violations of human rights in Burma/Myanmar’ (34) and the need to ‘increase pressure on the regime by adopting a series of measures targeting those responsible for the violent repression and the political stalemate in the country’. (35) The contested regulation states that the action by the European Union began in 1996 in the light of the absence of progress towards democratisation and the continuing violation of human rights (36) and refers to a number of factors which prompted the renewal and strengthening of the restrictive measures against Burma, such as the refusal by the authorities to enter into discussions with the democratic movement, the refusal to allow a genuine and open National Convention, the continuing detention of Daw Aung San Suu Kyi and the failure to take action to eradicate the use of forced labour. (37) The link between those factors and the appellant’s situation is by no means readily apparent.

43. Thirdly and lastly, the General Court’s reasoning is marred by some semantic ambiguity. The General Court’s statement, in paragraph 67 of the judgment under appeal, that, ‘[a]s regards family members of such leading business figures [dirigeants], it may be presumed that they benefit from the functions exercised by those businessmen [dirigeants]’, (38) must in fact be understood as a reference to persons in charge of businesses. (39) However, persons in charge of businesses are not ‘rulers’ [dirigeants] within the meaning of Kadi but rather, as I have already explained, ‘persons associated’ with the rulers of the third country in question and, in the case of the appellant’s father, indirectly so. It would be entirely wrong to treat business leaders – however important their business might be – in the same way as the rulers of a country, unless the business leaders in question perform official functions within the machinery of State.

44. To these three sets of observations on the first plea in law I should like to add a comment on the effectiveness of the restrictive measures. The Council and the parties intervening in its support have maintained that the presumption established by the judgment under appeal that members of the families of persons who benefit from the economic policies of the Burmese regime benefit themselves from those policies is justified by the need to safeguard the effectiveness of the restrictive measures and, therefore, of the European Union’s policy of imposing sanctions on Burma by ensuring that there is no risk of circumvention. Apart from the fact that such an argument casts doubt on the true basis of the presumption, I do not believe that everything may be sacrificed on the altar of the effectiveness of the restrictive measures. By this I mean, that the very thing that gives the European Union its added value, that distinguishes it from the authoritarian regimes it fights against, is the implementation and defence of a union governed by the rule of law. It would be easier, and certainly more effective, to establish a system of sanctions applicable to the whole of the Union of Burma. By taking the approach of targeted sanctions, the EU has opted for a system of sanctions which may be less effective but which is undeniably fairer. Of course, if they are to produce the desired effects, the sanctions have to be as effective as possible. Absolute effectiveness, however, must fall by the wayside, the very fallibility of the restrictive measures testifying to the fact that, in the legal system of the European Union, it is the rights of individuals that are paramount.

45. For all the foregoing reasons, it must be concluded that, in stating that it may be presumed that members of the families of persons who benefit from the economic policies of the Burmese regime themselves benefit from those policies, and that Articles 60 and 301 EC therefore constitute adequate legal bases for the restrictive measures adopted against the appellant, the General Court gave an excessively broad interpretation of those articles and erred in law.

46. Consequently, the first plea must be upheld.

B – The third plea, alleging infringement of the rights of the defence

1. Arguments of the parties

47. The preliminary issue raised by this plea must be distinguished from the three limbs formulated by the appellant.

48. On the preliminary question relating to the applicability of the rights of the defence, the appellant points out that respect for the rights of the defence is a fundamental aspect of the Community based on the rule of law, and that Article 205 TFEU now provides that the Union’s action on the international scene must be conducted in accordance with the rule of law and with respect for the fundamental rights. According to the case-law of the Court of Justice, the rights of the defence apply whenever an institution adopts a measure that has direct adverse effects. Thus, when a decision has a significant adverse effect on the interests of those to whom it is addressed, the latter must be placed in a position in which they may effectively make known their views. (40) The EU courts have recognised that the right to a fair hearing, which includes the right to be informed of the evidence against the person concerned and the right to make one’s views effectively known, must be respected in relation to economic sanctions having adverse effects. This is all the truer in the case of a measure renewing the freezing of the assets of the person concerned, in which event that person must be informed of the new incriminating evidence and given the opportunity of having his views heard. The appellant was not given prior notice of any evidence, nor the opportunity of having his views heard before the contested regulation was adopted. Those procedural safeguards are also applicable in the case of a sanctions regime directed against a third country. According to the appellant, the contested regulation is not exclusively legislative, for it is of direct and individual concern to the appellant, to whom it refers by name in the list of persons whose assets must be frozen. In Melli Bank v Council (41) and Bank Melli Iran v Council, (42) which concerned restrictive measures imposed on legal entities under a sanctions regime adopted against a third country, the General Court did indeed recognise the applicants as enjoying the rights of the defence. In addition, the appellant considers that he is not listed as a member of a category. The General Court acknowledged that it is possible to demonstrate that a person has dissociated himself from the member of his family who is listed, but this can be demonstrated only by exercising the rights of the defence. In this regard, the appellant draws attention to the inconsistency in the approach adopted by the General Court, particularly because the Council itself acknowledged before the General Court and in its guidelines on implementation and evaluation of restrictive measures (43) that a person in the appellant’s situation enjoys the rights of the defence. The appellant therefore submits that it was not possible for the General Court to conclude that the rights of the defence were inapplicable.

49. On the first limb relating to the right to a fair hearing, the appellant challenges the General Court’s finding that a prior hearing of his views would not have had any bearing on the legality of the contested regulation, since it was only after the adoption of that regulation, and at a time when he had not been given any information about the reasons for his listing, that the appellant was able to produce evidence to show that he had no links with his father or with his father’s business interests, and that he had, therefore, certainly not benefited personally from the economic policies of the Burmese Government any more than anyone else.

50. On the second limb relating to the right to effective judicial protection, the appellant challenges the General Court’s conclusion that that protection was ensured, inasmuch as the General Court confined itself to verifying that the rules governing procedure and the statement of reasons had been observed, that the facts were materially accurate, that there was no manifest error in the assessment of the facts and that there had been no misuse of powers. According to the case-law of the Court of Justice, however, the lawfulness of restrictive measures requires a full review, (44) and it was just such a review that the General Court carried out in People’s Mojahedin Organization of Iran. (45) In his reply, the appellant adds that this was also the type of review that the General Court conducted in the judgment it delivered in Kadi after that case had been referred back to it by the Court of Justice. (46) Taking into account the considerable impact of the restrictive measures, a less than full review is not acceptable.

51. Finally, in reaction to the arguments set out by the Commission in its response, the appellant maintains, in his reply, that the Council was required to notify him individually of the actual and specific grounds on which the measure freezing his funds was adopted.

52. The Commission considers that the appellant has failed in his attempt to demonstrate the existence of any error of law in the General Court’s reasoning that is capable of invalidating or vitiating the judgment under appeal. With respect to the application of the rights of the defence, the Council and the Commission concur with the General Court’s analysis, which draws a distinction between sanctions regimes imposed on a third country and those imposed on persons on account of their link with a terrorist activity, the General Court having also demonstrated that the appellant had enjoyed sufficient procedural safeguards and had been able to make his views known to the Council before the contested regulation was adopted. Those two institutions reject the claim that the appellant had a right to a prior hearing at the time when the restrictive measures at issue were maintained against him, and contend that due notification of those measures was effected by the publication of the notice of 11 March 2008 in the Official Journal of the European Union. In this connection, the Council adds, thus echoing the view expressed by the General Court, that, even if the appellant were to be recognised as having a right to a prior hearing, the fact that no hearing took place was not capable of vitiating the lawfulness of the contested regulation, since the appellant did not furnish any new evidence.

53. As regards the right to effective judicial protection, the Council and the Commission consider that the General Court applied the correct level of review and the appropriate review criterion, in accordance its case-law in Organisation des Modjahedines du peuple d’Iran v Council (47) and Melli Bank Iran v Council, (48) in rightly recognising at the same time that the Council has extensive discretion. The General Court was therefore correct when it held that only a manifest error of assessment on the part of the Council could lead to the annulment of the act. In its rejoinder, the Commission puts forward a similar line of argument, going so far as to express the view that, in its reply, the appellant tried to introduce a new plea relating to the level of review adopted by the General Court.

54. Moreover, the Council and the Commission reject the claim that there was an obligation to notify the contested measures individually, in so far as the appellant was listed as a member of the government or a person associated with it.

2. Analysis

a) The preliminary question concerning the possibility of relying on the rights of the defence

55. It is apparent from paragraphs 120 to 123 of the judgment under appeal that the General Court drew a very clear distinction between the case which gave rise to the judgment in Organisation des Modjahedines du peuple d’Iran v Council (49) and the present case, inasmuch as it considered that the rule in Organisation des Modjahedines du peuple d’Iran v Council concerns only sanctions regimes adopted against persons on account of their involvement in terrorist activities. In the present case, however, the restrictive measures are directed against a third country and were adopted under a regulation, a general legislative act. Consequently, the persons identified by the contested regulation are not listed on account of their activities but because of their membership of a general category, in this case, according to the General Court, ‘family members of leading business figures in Myanmar’. (50) It cannot therefore be argued that proceedings were initiated against the appellant within the meaning of the aforementioned case-law. (51) Consequently, the rights of the defence do not apply to persons identified in an annex to a regulation adopting a sanctions regime against a third country. (52)

56. I strongly disagree with that approach.

57. First, I am not convinced by the distinction which the General Court has drawn between the legal treatment afforded to sanctions regimes aimed at persons involved in terrorist activities and that afforded to sanctions regimes aimed at third countries. It is perfectly clear that the contested regulation is directed against the Burmese regime. However, it would be pure fiction to consider that, because it is aimed at a third State, that regulation can escape all requirements connected with any individual rights that may be at issue. In order to affect the State in question, the restrictive measures must be directed against intermediaries who embody or serve it. To that end, the Council has a broad discretion to determine the persons, entities and bodies that should form the subject of such measures, in which regard it exercises a power which I consider to be entirely comparable with that which it enjoys in the context of the prevention of terrorism. I must admit that I fail to see what legal subtlety might explain why the individual rights of persons suspected of participating in terrorist activities are better safeguarded than those of persons suspected of cooperating with an authoritarian regime which the European Union intends to combat.

58. Moreover, the assessment of the ‘link’ which any person entered in the list of persons whose assets must be frozen has, in principle, with the governing regime – the true target of the restrictive measures – must be conducted independently of the question whether those persons may rely on the rights of the defence. Even if the Court were to find that Articles 60 and 301 EC constitute adequate legal bases for the contested regulation, the Court should nevertheless consider that the link between the appellant and the Burmese regime is not enough to exempt the Council from the obligation to observe his rights of defence, as I have already suggested in another context. (53) In these matters, the further removed from the centre of power and decision-making, the more tenuous becomes the link with the governing regime actually targeted, and the more important it is that the rights of defence should be observed.

59. Secondly, what effect does the nature of the act have on the foregoing interim conclusion?

60. The question of the nature of a regulation implementing a sanctions regime against a third country and, to this end, defining restrictive measures imposed on the natural and legal persons listed in an annex would seem to have been settled by the Court of Justice in its judgment in Bank Melli Iran v Council, (54) in which it held that the annex to such a regulation produced the same effect as the regulation itself. (55) Consequently, the General Court’s reasoning in paragraph 123 et seq. of the judgment under appeal could appear to be legally valid, the General Court having based its analysis on the exclusively legislative nature of the contested measure so as to refuse the appellant the benefit of rights of defence.

61. However, that assessment fails to take into consideration an important aspect of the Court’s case-law in the sphere of restrictive measures. Even if the contested regulation were to be given a single legal classification, the case-law makes it clear that that cannot stand in the way of recognition of the rights of defence. Thus, at the heart of Kadi itself was the problem of the legality of a regulation, but that did not prevent the Court from finding that, ‘in the light of the actual circumstances surrounding the inclusion of the appellants’ names in the list of persons … covered by the restrictive measures contained in Annex I to the … regulation [in question], it must be held that the rights of defence, in particular the right to be heard, and the right to effective judicial review of those rights, were patently not respected’. (56) Recognition is necessary in order for a minimum level of guarantees, particularly procedural, to be offered to the natural and legal persons on those lists, (57) whether in connection with their terrorism-related activities or their activities relating to a State policy which attracts international condemnation, and in order to ensure observance of the principle of effective judicial protection. (58)

62. The finding in paragraph 123 of the judgment under appeal to the effect that the rights of the defence do not apply to the appellant is therefore in itself an error of law. However, as the General Court extended the analysis so as to include also the question whether the appellant ought to have been given prior notice of the relevant matters of fact and law and a prior hearing, that finding does not on its own constitute an error of law capable of invalidating the judgment under appeal. It is therefore necessary to continue with the analysis of the other limbs of the plea.

b) The alleged infringement of the right to the prior notification of reasons and the right to a prior hearing (first limb of the third plea)

63. With respect to the prior notification of reasons, in paragraphs 124 to 126 of the judgment under appeal the General Court held that the relevant matters of fact and law were known to the appellant before the adoption of the contested regulation and that there was no need for that information to be supplied again before the adoption of the regulation. In so doing, the General Court attached much importance to the fact that the appellant has been the subject of restrictive measures since 2003 and that the contested regulation is based in particular on common positions which themselves set out ‘all the matters of fact and law justifying the adoption and maintenance of the restrictive measures at issue’. (59)

64. I note, however, that, while the common positions and the contested regulation implementing them set out the reasons for adopting a sanctions policy against Burma by giving an admittedly adequate account of a disturbing national political situation, the position is different so far as the appellant’s individual situation is concerned. It is evident from both the case-file and the judgment of the General Court that the appellant has never been informed of the personal reasons for his own listing. A reading of the contested regulation, where appropriate in combination with the common positions, tells the appellant only that he is listed personally, with a view to exerting pressure on a third country, solely in his capacity as his father’s son. Since 2003, no evidence has been furnished to show that he himself benefits from the economic policies of the Burmese regime. Nor, since 2003, has the Council mentioned that it based the appellant’s listing on a presumption that members of the family of a person who benefits from the economic policies of the Burmese Government are deemed to benefit themselves from those policies until such time as they produce evidence to the contrary. As the General Court pointed out, the Council did, it is true, explain its reasons for extending the restrictive measures to persons who benefit from the economic policies of the Burmese regime. (60) No such explanation has ever been provided, however, in relation to members of their family. (61) The General Court was therefore wrong to find, in paragraph 126 of the judgment under appeal, that ‘the relevant matters of law and fact in this case were known to the appellant before the Council adopted the contested regulation’.

65. I shall conclude my analysis of this issue by pointing out that the legal rules applicable to the initial inclusion of a person’s name in a list such as that in Annex VI to the contested regulation are, in principle, less favourable to that person than when the listing is renewed, inasmuch as, in the interests of ensuring that the restrictive measures are effective, some of the rights of defence may not be fully applied, at least during the non-contentious procedure. (62) Those interests may well still be relevant even when it comes to renewing those measures. At that stage, however, it is for the EU judicature to ensure that any special circumstances which operated to justify a modification of the rights of defence available to the listed persons at the time of their initial listing still obtain when the listing is renewed. The judicature must also strike a balance between the objective pursued by the European Union and the need to ensure that the institutions are not subjected to excessively onerous procedural constraints that might paralyse their actions, on the one hand, and the need to apply the rules of procedure adequately to the individual, on the other. It must be said that the General Court never sought to strike such a balance, even though it was faced with a situation involving a natural person who is neither a Burmese ruler nor a member of the family of a Burmese ruler but simply the son of a person who benefits from the economic policies introduced by those rulers.

66. With regard to the right to a prior hearing, the position is similar to that put forward in relation to the requirement of prior notification of reasons. While the Court held in Kadi that ‘[s]o far as concerns the rights of the defence, in particular the right to be heard, with regard to restrictive measures such as those imposed by the contested regulation, the Community authorities cannot be required to communicate those grounds before the name of a person or entity is entered [in that list] for the first time’ (63) and that ‘[n]or were the Community authorities bound to hear the appellants before their names were included for the first time in the list […], for reasons also connected to the objective pursued by the contested regulation and to the effectiveness of the measures provided by the latter’, (64) its position is clearly limited to the case of an initial listing. Here, however, we are dealing with a renewal.

67. The General Court’s analysis in paragraphs 127 to 133 of the judgment under appeal is based on an overall approach. Thus, the General Court ascertained whether, since 2003 – the date on which restrictive measures were first imposed on the appellant – the appellant had been able to make his views effectively known and concluded that, over the course of the EU’s legislative process, he could, if he had so requested, have made his views known on several occasions. (65)

68. I find such an approach less than satisfactory in two respects. First, the onus is on the appellant to make his views known to the Council on his own initiative. Secondly, that approach does not answer the question whether a prior hearing should have been provided for during the adoption of the contested regulation itself. The General Court’s response to the appellant’s argument that the Council should have invited him to make his views known before the adoption of the contested regulation is that the appellant was able to express his views to the Council, before the adoption of the regulation, as the legislative process progressed, that is to say, whenever the common positions were reviewed and renewed.

69. The basis of the General Court’s reasoning is very hypothetical. When it states that the Council could in fact have taken account of an explicit intervention by the appellant in the course of the re-examination of Common Position 2006/318, (66) it does not answer the question whether, if the appellant has not taken up that opportunity, this none the less has the effect of exempting the Council from the obligation to arrange a prior hearing when adopting a regulation on the implementation of that common position by the Community.

70. Finally, the General Court also held that, even if the appellant were held to have the right to a prior hearing, it is settled case-law that this would have no effect on the legality of the contested regulation because the arranging of a hearing would not have led to a different outcome. (67) In arriving at such a conclusion, the General Court relies in particular on the fact that the appellant did not challenge the political situation in Burma, or the professional status of his father, or his family relationship with the latter. Nor did he establish that he had dissociated himself from his father by demonstrating that ‘his father’s position no longer benefits him’. (68)

71. In so far as the appellant did not receive prior notice of the reasons why he had himself been included in the list, it is not possible, in my opinion, to criticise him for not having raised the necessary arguments after the adoption of the contested regulation, and to infer from this that the absence of a prior hearing has no bearing on the legality of the act. Moreover, it is of course impossible for the appellant to dispute the family relationship between him and father, since, barring rare exceptions, parentage is a matter of fixed and lasting fact.

72. It is true that, following publication of the notice of 11 March 2008, the appellant asked the Council, on his own initiative, to give him the reasons for his listing. In his letter, the appellant, still questioning the reasons for his listing, points out that he was only a shareholder in his father’s two companies for the period 2005 to 2007, and that he was therefore no longer a shareholder in the year when the contested regulation was adopted. In its reply, the Council chose not to take account of that manifestly new fact and maintained the appellant’s listing. The Council has exclusive discretion in this regard of course. However, the General Court uses these circumstances to support the inference that this actually proves that, even if a prior hearing had been organised, it would not have altered the Council’s position. I have some sympathy nevertheless, with the argument put forward by the appellant at the hearing, during which he described his situation as being that of an individual whose only option is to make assumptions as to the reasons why he was listed, to make the Council aware of those assumptions and, finally, to try to convince it to remove his name from the list. In other words, the appellant cannot be criticised for having been unable, even after the event, to rebut the presumption on which his listing was based when that presumption was never really made known to him. In those circumstances, it is not technically possible for the General Court to state that any failure to give the appellant a prior hearing would not in any event have affected the legality of the contested regulation when it is common ground that, since the real reasons for his listing were not notified to him, he was never in fact given an opportunity to make his views effectively known. (69)

73. For all of the foregoing reasons, I consider the first limb of the third plea to be well-founded.

c) The alleged infringement of the right to effective judicial protection (second limb of the third plea)

74. The appellant complains that the General Court did not apply the appropriate level of judicial review when verifying the lawfulness of the restrictive measures. The Commission’s argument disputing admissibility cannot be upheld, since the appellant did mention, in his appeal, the question of the extent of the judicial review in the context of his submission as to the infringement of his right to effective judicial protection.

75. As to the substance of the plea, in paragraph 144 of the judgment under appeal, the General Court held that it must be acknowledged that the Council enjoys broad discretion in its assessment of the matters to be taken into consideration for the purposes of adopting economic sanctions on the basis of Articles 60 EC and 301 EC, and that, consequently, because the courts ‘may not, in particular, substitute their assessment of the evidence, facts and circumstances justifying the adoption of such measures for that of the Council, the review carried out by the Court of the lawfulness of decisions to freeze funds must be restricted to checking that the rules governing procedure and the statement of reasons have been complied with, that the facts are materially accurate, and that there has been no manifest error of assessment of the facts or misuse of power’.

76. First and foremost, I would point out that, in this paragraph, the General Court refers to ‘decisions’ to freeze funds, thus seeming to relegate to a position of secondary importance the general application of the contested act on which the General Court laid such emphasis in its examination of the legal basis, and that it did not hesitate to reinforce its position by citing its own case-law concerning the combating of terrorism, even though, in other passages of the judgment under appeal, it seemed to draw a clear distinction between restrictive measures adopted in order to combat terrorism and those adopted against a third country. The judgment under appeal is therefore blighted by a number of inherent contradictions apparent in paragraph 144.

77. To return to the question of the extent of the judicial review, it is true that the General Court’s case-law on this subject varies. Its position in the judgment under appeal is based directly on paragraph 159 of the judgment in Organisation des Modjahedines du peuple d’Iran v Council. However, a few paragraphs earlier in the latter judgment, the General Court had established the principle of a fuller review. (70) In any event, the General Court has developed a very clear line of authority in favour of a full review over the course of its judgments in Organisation des Modjahedines du peuple d’Iran v Council, (71) Melli Bank v Council and Bank Melli Iran v Council (72) and, most recently, Kadi, delivered after the Court of Justice referred that case back to the General Court. (73)

78. In my view, it is of course the judgments in Melli Bank v Council and Bank Melli Iran v Council that are the most relevant to this case, since they concerned restrictive measures introduced under a sanctions regime imposed on a third country. In those two judgments, the General Court held that a distinction had to be drawn between the provisions laying down the general rules defining the detail of the restrictive measures, on the one hand, to which a restricted judicial review must be applied so as to avoid any encroachment upon the discretion traditionally enjoyed by the Council in this area, and the lists naming the persons actually targeted by the restrictive measures, on the other hand, which must be subjected to a full judicial review.

79. That position appears to be entirely consistent with the case-law of the Court of Justice. Admittedly, the Court has never had to give a ruling on the extent of the judicial review applicable to restrictive measures such as those at issue in this appeal. None the less, I have already pointed out that the case-law concerning the combating of terrorism may also be applied, mutatis mutandis, to a sanctions regime imposed on a third country. I note that, since Kadi, (74) the Court has advocated a full review of restrictive measures, which position was unambiguously reiterated in E and F, where the Court held that ‘the lack of a statement of reasons which vitiates the listing is also liable to frustrate the attempts of the courts to carry out an adequate review of the substantive legality of that listing, particularly as regards the verification of the facts, and the evidence and information relied upon in support of the listing. […] [T]he possibility of an adequate review by the courts is indispensable if a fair balance between the requirements of the fight against international terrorism, on the one hand, and the protection of fundamental liberties and rights, on the other, is to be ensured’. (75) Recently, the Court of Justice was again asked to adopt a definitive position to that effect. (76)

80. In determining the extent of the review, what matters is not so much the context in which the restrictive measures were adopted – such as the fight against terrorism – as the considerable impact which those measures will have on the individual situations of the persons listed, who are undeniably seriously affected.

81. I therefore call on the Court, in this appeal, to establish a uniform level of requirement for the purposes of defining the extent of the judicial review to be applied by the EU judicature when faced with restrictive measures imposed on natural persons, other than rulers, under a sanctions regime adopted against a third country, while at the same time recognising that the Council has broad discretion in assessing the appropriateness of the measures and the arrangements implementing them.

82. It is thus clear from paragraphs 144 and 145 of the judgment under appeal that the General Court did not apply an appropriate level of judicial review, having confined itself to ascertaining that the obligation to state reasons had been complied with, without ever verifying the existence of any evidence in support of the Council’s allegations that the appellant actually benefits from the economic policies of the Burmese regime.

83. Since the judgment under appeal is vitiated by a new error of law, this second limb of the third plea must be considered to be well-founded.

d) The question of notification (third limb of the third plea)

84. As to whether the contested regulation ought to have been notified to the appellant individually, I have serious doubts about the admissibility of that question. None of the pleas raised before the General Court sought to challenge the lack of any individual notification by the Council. Consequently, in the judgment under appeal, the General Court did not conduct any assessment of that plea precisely because it did not exist. Accordingly, even assuming that the appellant did intend to address that question on appeal, his arguments are not in any event directed against the judgment under appeal. What we have here, therefore, is clearly a new plea raised by the appellant in the reply countering the Commission’s response, in which the latter reiterates the arguments it has put forward in other appeals, (77) although without taking the trouble to check first whether those arguments are appropriate in the context of this case, the appellant never having raised any plea or advanced any argument, in his appeal, alleging infringement of the obligation to notify. The exchange of argument and evidence in the course of the reply and the rejoinder, and then at the hearing, should not therefore mislead the Court as to the admissibility of the arguments connected with notification, which constitute at best a new plea alleging that the Council infringed the obligation to notify, which as such is inadmissible, the Court’s jurisdiction being confined to an assessment of the legal solution given to the pleas argued before the General Court. (78)

85. For the reasons set out above, I therefore suggest that the Court of Justice should uphold the first two limbs of the third plea.

C – The second plea, alleging infringement of the obligation to state the reasons on which the contested regulation is based

1. Arguments of the parties

86. The appellant submits that, when the Council lists an individual by name, it is required to provide the actual and specific reasons for that listing. That information is all the more important if it was not possible to hear the appellant beforehand. The Council itself recognises that obligation to state the actual and specific reasons for each individual listing. (79) Next, on the basis of the General Court’s case-law, (80) the appellant submits that the Council is required to state the reasons leading it to form the view that a given individual or entity belongs to a category referred to in a regulation ordering the freezing of funds. The Council ought, therefore, to have stated the precise reasons why it takes the view that the appellant benefited from the government’s economic policies. It makes no reference either to the reason for his listing, such as alleged conduct or the fact that he is his father’s son, or to the presumption that family members benefit from those policies. The General Court was therefore wrong to find that the Council had fulfilled its obligation to state reasons.

87. For its part, the Council considers that the reasons for listing the appellant were clearly stated in Common Position 2003/297, on the basis of which the appellant’s assets were frozen for the first time, and in Common Position 2006/318, and that it was not required to give any reasons other than the mere the fact that the appellant is his father’s son. In the Commission’s submission, the appellant simply repeats the arguments already put forward before the General Court, to which the latter responded entirely correctly by applying the traditional criteria defined by the case-law of the General Court and the Court of Justice for the purposes of assessing the adequacy of the statement of reasons for an act. The appellant cannot maintain that he was unaware of the context in which the contested regulation was adopted, since he had himself been subject to those measures since 2003. Nor is he unaware that his listing is prompted by the risk that the measures against his father will be circumvented. Since there has been no significant change of fact or law in the meantime, the Council was not required to reiterate explicitly the reasons for the appellant’s listing. In any event, Annex VI to the contested regulation states that the appellant is his father’s son and it was legitimate for him to be listed on that account alone. The Council and the Commission therefore contend that this plea should be dismissed.

2. Analysis

88. As the General Court rightly pointed out, the purpose of the obligation to state reasons is to provide the person concerned with sufficient information to make it possible to determine whether the act is well founded or whether it is vitiated by an error. (81) The verification that the institution which adopted the act has fulfilled its obligation to state reasons therefore makes it possible to determine whether the person concerned has had the opportunity to defend his rights. (82)

89. The line of reasoning applied in this regard by the General Court clearly falls into two stages. First, it verified the adequacy of the reasons given for adopting a sanctions regime against the Union of Burma; (83) next, it checked that adequate reasons had also been given for the restrictive measures adopted against the appellant. (84) I shall not reiterate the general reasons for the sanctions regime, since the conclusion reached by the General Court can hardly be disputed.

90. The position is different with regard to the General Court’s assessment of the reasons for the restrictive measures imposed on the appellant. It rested with the Council to set out, clearly and unequivocally, the reasoning leading it to enter the appellant’s name in the annex including the ‘persons who benefit from government economic policies’, so that he might know the reasons for the measure and defend his rights. The Council’s duty to state reasons when adopting restrictive measures is defined also in the light of the principle of effective judicial protection that the stating of the reasons for the act must help to guarantee. In consequence, the General Court had to ascertain whether the appellant was in fact placed in a position to understand what was alleged against him and assess the merits of the decision taken against him. (85)

91. Merely reading Point J1c of Annex VI to the contested regulation gives us details, not only of the appellant’s identity but also of his sex, date of birth and paternal parentage. Moreover, the contested regulation contains no mention of the presumption that members of the families of persons who benefit from the economic policies of the Burmese Government themselves benefit from those policies.

92. I am not convinced by the General Court’s argument that the Council fulfilled its obligation to state the reasons for the contested regulation, adopted in 2008, because, in 2003, it set out in a common position which listed the appellant for the first time the reasons prompting it to extend the freezing of funds to family members. (86) On the one hand, recital 3 in the preamble to Common Position 2003/297, on which the General Court based its reasoning, shows only that the scope of the restrictive measures is extended to persons who benefit from the policies of the Burmese Government and to their families, but gives no explanation as to the reasons for extending the measures to family members. On the other hand, it is not possible to conclude that, on that basis alone, the appellant, then aged 16, was in a position to defend his rights and that that state of affairs continued in being until the contested regulation was adopted, bearing in mind that the appellant is listed in an annex, the title of which indicates that the very reason for his listing is that he benefits from the economic policies of the Burmese Government. (87) The fact that not all the members of Mr Tay Za’s family are listed in that annex leads me to think that, here again, the appellant could not reasonably form the view that his membership of the family was and remains the only reason for his listing. The declarations contained in the original common position and reproduced in the common positions that followed it, in particular that implementing the contested regulation, simply state that members of the families of persons who benefit must have their assets frozen. (88) Such a simple assertion cannot constitute a statement of reasons inasmuch as it does not even establish the basis on which the assets of those persons are to be frozen in the first place. This is borne out by the fact, which I have already mentioned, that the General Court had to create ex nihilo a presumption by which the reasons for the appellant’s listing could, retrospectively, be explained.

93. However, even that presumption is not unequivocal. On the one hand, the General Court states that the extension of the freezing of assets to family members is justified by the fact that it is safe to presume that family members themselves benefit from the economic policies of the Burmese Government. The General Court also held that the Council had adequately indicated how ‘[the appellant] or his father benefited from the said policies’ (89) by taking the view that the father benefited from his function as managing director. On the other hand, the General Court held, in the very context of examining the adequacy of the statement of reasons, that the appellant could not claim to be unaware of the reasons for his listing given that he had argued in his pleadings that there was ‘a risk of his father circumventing the freeze on his own assets by transferring his funds to other family members’. (90)

94. Thus, the extremely dynamic interpretation of the contested regulation which the General Court adopted did not have the effect of eliminating any doubt as to the real reasons for the appellant’s listing, and it is not therefore possible, in the light of the reasoning set out by the General Court in paragraphs 106 and 107 of the judgment under appeal, to argue that the justification furnished gave a clear and unequivocal indication of the reasoning applied by the Council when making that listing.

95. That inherent inconsistency in the examination of the plea alleging failure to fulfil the obligation to state reasons in the judgment under appeal ultimately produces the opposite effect to that sought by the General Court, in so far as it is indicative of the awkward position in which the Council put the EU Court when the latter was required to undertake a judicial review of the contested regulation. Indeed, it might also be said to show that that court was not in a position to exercise its power of review properly, despite the fact that this too is one of the very objectives of the obligation to state reasons.

96. Consequently, in finding in paragraph 108 of the judgment under appeal that the Council had fulfilled its obligation to state the reasons for the restrictive measures adopted against the appellant, the General Court committed an error of law. The second plea must therefore be upheld.

D – The fourth and final plea, alleging infringement of the right to property and the principle of proportionality

1. Arguments of the parties

97. The appellant puts forward two sets of arguments. On the one hand, the procedural guarantees applicable to the right to property were not observed in relation to him, since he did not have an appropriate opportunity of stating his case. Neither the Council nor the General Court has produced evidence justifying the need to maintain such severe measures against him, even though it has never been established that the appellant benefited any more than any other Burmese national from the economic policies of the governing regime. On the other hand, he considers that the restrictive measures applied to him constitute a considerable restriction of his right to property in view of their general application and their duration. He points out in this regard that he has been the target of those measures since 2003, in other words since he was 16 years old. Moreover, the freezing of his assets is total, without temporal or even quantitative limits; the appellant is therefore permanently affected by those measures. In this way, the appellant’s right to property has indeed been disproportionately infringed.

98. For its part, the Council contends that the plea should be dismissed and fully endorses the General Court’s conclusion that the restriction on the appellant’s right to property cannot be regarded as disproportionate or inappropriate, bearing in mind the importance of the objective pursued by the contested regulation and the fact that the appellant has left open to him the chance of demonstrating that he has dissociated himself from his father and of thus bringing to an end the adverse effects on the exercise of his right to property. In the Council’s submission, the measures imposed on the appellant are therefore limited in time. Moreover, the Council also considers that the appellant has had adequate opportunity to state his case inasmuch as the Council re-examined his situation at his request. It is therefore clear that the restrictive measures applied to him are indeed justified, proportionate restrictions of his right to property.

99. The Commission supports the Council’s position. It nevertheless adds two points. First, it considers that the argument to the effect that the appellant was unable to state his case to the authorities is inoperative. Next, the Commission challenges the appellant’s assertion that the restrictive measures applied to him affect all his assets, given that it is apparent from Article 21 of the contested regulation that those measures apply only to the territory of the European Union and, outside the territory of the European Union, to European Union nationals, to legal persons constituted under the law of a Member State of the European Union and to natural or legal persons in respect of business conducted within the European Union.

2. Analysis

100. It is clear from the settled case-law of the Court of Justice, reiterated by the General Court in paragraph 156 of the judgment under appeal, that, in the legal system of the European Union, the right to property is conceived not as an absolute right but, on the contrary, as a right which may be subjected to limitations. In particular, use of the right to property may be restricted, provided that those restrictions serve an objective in the general interest pursued by the Community and that they do not constitute, in relation to the aim pursued, a disproportionate and intolerable interference which would impair the very substance of that right.

101. I would point out first of all that the appellant has not disputed the fact that the contested regulation pursues an objective in the general interest. Nor have the other parties to the proceedings disputed the fact that, owing to the effect of the measures imposed, the appellant sustains a restriction of the exercise of his right to property that must be classified as significant. (91) It then remains to be verified that that restriction does not constitute a disproportionate and intolerable interference impairing the very substance of the appellant’s right to property.

102. In this connection, the General Court rightly drew attention to the principle enshrined in case-law to the effect that ‘the importance of the aims pursued by legislation providing for sanctions may be such as to justify negative consequences, even of a substantial nature, for certain persons concerned, including persons who are in no way responsible for the situation which led to the adoption of the measures concerned, but who are adversely affected in particular with respect to their rights to property’. (92)

103. With regard to the argument based on the duration of the application of the restrictive measures, I would point out that the action for annulment brought before the General Court has as its very purpose to challenge the lawfulness of the contested regulation, and, more specifically, the restrictive measures which it implements against the appellant. It is true that those measures are in reality being renewed. None the less, I consider that the arguments put forward first in the application for annulment and then in the appeal should not be aimed at asking the Court to rule, even incidentally, on the legality of the measures adopted against the appellant since 2003. Unless it is to run the risk of considerably extending the subject-matter of the dispute, which is in principle proscribed in the context of an appeal, I do not think that the Court can consider the restrictive measures renewed by the contested regulation in 2008 to be an infringement of the right to property, given that such measures have been in place since 2003 and the appellant was, at that time, a minor. In the context of this appeal, the argument relating to the fact that the restrictive measures maintained by the contested regulation have been applied since 2003 on the basis of other legislative acts and therefore constitute an intolerable restriction on the exercise of the appellant’s right to property must be held to be inoperative.

104. As for the argument based on the absolute and unlimited freezing of funds, it must be recalled, on the one hand, in the light of the findings of the General Court, that the contested regulation provides for the possibility of authorising the release or use of resources under certain conditions, in particular to cover the basic needs of the persons listed. (93)

105. Finally, the appellant complains that the General Court took no account of the fact that, contrary to the requirements of Article 1 of Protocol No 1 to the European Convention for the Protection of Human Rights and Fundamental Freedoms (the ‘ECHR’), he was never offered an adequate opportunity of stating his case. This limb of the plea in law therefore relates to the procedural guarantees that must apply to the right to property.

106. In this connection, it is correct to say that the Court of Justice has adopted the requirements laid down by the European Court of Human Rights, which states that, ‘[a]lthough Article 1 of Protocol No. 1 contains no explicit procedural requirements, the proceedings in issue must also afford the individual a reasonable opportunity of putting his or her case to the responsible authorities for the purpose of effectively challenging the measures interfering with the rights guaranteed by this provision. In ascertaining whether this condition has been satisfied, a comprehensive view must be taken of the applicable procedures’. (94)

107. In the judgment under appeal, the General Court took account of those procedural requirements and considered that, since 2003, the appellant had had an opportunity to put his case on a number of occasions. (95) In arriving at that conclusion, the General Court refers in particular to its analysis of the plea alleging infringement of the right to a fair hearing and the plea alleging infringement of the right to effective judicial protection.

108. Although, in keeping with my previous submissions, (96) I am not persuaded that account must be taken in this context of any opportunities which may or may not have been offered to the appellant of putting his case over the course of the acts which have adversely affected his situation since 2003, I find, on the other hand, far more convincing the argument concerning the existence of the notice which the Council published in the Official Journal of the European Union on 11 March 2008, (97) which was intended in particular to draw the attention of the persons listed to the possibility of asking the Council to re-examine the decision by which they had been listed, and to the possibility of challenging the legality of that decision before the General Court. Although published slightly later than the contested regulation, that notice is undeniably an important procedural step in safeguarding the right to property and the exercise of that right. Indeed, the appellant initiated a correspondence with the Council following its publication. The existence of that notice is also what marks the fundamental difference between the situation in this case and that of Mr Kadi, as relied on by the appellant. In Kadi, the contested regulation ‘was adopted without furnishing any guarantee enabling [the appellant] to put his case to the competent authorities’. (98) The same cannot be said in this case.

109. I therefore suggest that the Court should dismiss the fourth plea.

IV – The action before the General Court

110. Under the second sentence of the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, where the Court of Justice sets aside the judgment of the General Court, it may give final judgment in the matter, where the state of the proceedings so permits.

111. That, in my view, is the case here, at the very least as regards the first plea.

112. As I proposed in point 46 of this Opinion, the judgment under appeal must be set aside in so far as it dismissed the first plea raised by the appellant at first instance, alleging that the contested regulation has no legal basis.

113. As I have already said, in my view the General Court vitiated its judgment with an error of law by adopting an excessively broad interpretation of Articles 60 and 301 EC. In those circumstances, and for the reasons set out above, I consider it appropriate that the first plea should be upheld and, therefore, that the contested regulation should be annulled so far as the appellant is concerned for want of legal basis.

V – Costs

114. Under Article 122 of the Rules of Procedure, where the appeal is well founded and the Court of Justice itself gives final judgment in the case, the Court is to make a decision as to costs.

115. Under Article 69(2) of the Rules of Procedure, which is applicable to appeal proceedings by virtue of Article 118 of those Rules, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since they have been applied for by the appellant, the Council should be ordered to pay the costs connected with the proceedings before the General Court and with this appeal.

VI – Conclusion

116. In the light of all the foregoing considerations, I propose that the Court should rule as follows:

(1): The judgment of the General Court of 19 May 2010 in Case T-181/08 Tay Za v Council is set aside;

(2): Council Regulation (EC) No 194/2008 of 25 February 2008 renewing and strengthening the restrictive measures in respect of Burma/Myanmar and repealing Regulation (EC) No 817/2006 is annulled in so far as it concerns the appellant;

(3): The Council is ordered to pay the costs of both sets of proceedings;

(4): The United Kingdom of Great Britain and Northern Ireland and the European Commission are to bear their own costs.

2 –: Original language: French.

3 –: Case T-181/08 [2010] ECR II-0000.

4 –: OJ 2008 L 66, p. 1.

5 –: The EU’s first action took the form of the Common Position of 28 October 1996 defined by the Council on the basis of Article J.2 of the Treaty on European Union, on Burma/Myanmar (96/635/CFSP) (OJ 1996 L 287, p. 1). For the sake of simplicity and except where reference to the exact title of an act requires me to do otherwise, I shall subsequently use the abbreviated name ‘Burma’.

6 –: Council Common Position 2000/346/CFSP of 26 April 2000 extending and amending Common Position 96/635 (OJ 2000 L 122, p. 1).

7 –: OJ 2003 L 106, p. 36.

8 –: See recital 3 in the preamble to, and Article 9 of, Common Position 2003/297.

9 –: OJ 2003 L 340, p. 81.

10 –: OJ 2004 L 125, p. 61.

11 –: OJ 2005 L 108, p. 88.

12 –: The names of the appellant’s two brothers, which appeared on the list annexed to Common Position 2004/423, were not retained in Common Position 2005/340. However, the latter did add the name of an uncle of the appellant (see point J2a of Annex I to Common Position 2005/340).

13 –: Council Common Position 2007/248/CFSP of 23 April 2007 renewing restrictive measures against Burma/Myanmar (OJ 2007 L 107, p. 8). The wife of the appellant’s father’s brother was entered for the first time on the list of persons whose assets must be frozen.

14 –: Council Common Position of 19 November 2007 amending Common Position 2006/318/CFSP renewing restrictive measures against Burma/Myanmar (OJ 2007 L 308, p. 1). The appellant’s grandfather and the company owned by the appellant’s father were included for the first time in the list annexed to Common Position 2007/750.

15 –: Council Common Position 2004/349/CFSP of 29 April 2008 renewing restrictive measures against Burma/Myanmar (OJ 2008 L 116, p. 57).

16 –: Following the entry into force of Commission Regulation (EC) No 385/2008 of 29 April 2008 (OJ 2008 L 116, p. 5), which amended the contested regulation, Heading J of Annex VI now lists ‘Persons who benefit from government economic policies and other persons associated with the regime’.

17 –: Under entries J1b, J1d and J1e respectively.

18 –: OJ 2008 C 65, p. 12.

19 –: OJ 2009 L 108, p. 20.

20 –: See paragraph 33 of the judgment under appeal.

21 –: Since Regulation No 353/2009 serves merely to implement Regulation No 194/2008 (see paragraph 38 of the judgment under appeal), which, without further amending the body of the basic regulation, simply reproduces, in one of its annexes, the information concerning the appellant already supplied by the contested regulation, I shall confine myself in the submissions that follow to examining that regulation.

22 –: Joined Cases C-402/05P and C-415/05 P [2008] ECR I-6351.

23 –: Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the EU Common Foreign and Security Policy (document 15114/05 of 2 December 2005). The appellant refers more specifically to paragraph 19 of those guidelines.

24 –: .Kadi, paragraphs 166 and 168.

25 –: See paragraphs 61 to 65 of the judgment under appeal.

26 –: Paragraph 67 of the judgment under appeal.

27 –: Paragraph 68 of the judgment under appeal.

28 –: See in particular points 24 et seq. of my Opinion in Case C-380/09 P Melli Bank v Council, pending before the Court.

29 –: See point 67 of my Opinion in the case giving rise to the judgment of 16 November 2011 in Case C-548/09 P Bank MelliIran v Council.

30 –: See points A to I of Annex VI to the contested regulation.

31 –: Points A to I of Annex VI to the contested regulation list both the rulers themselves (members of the State Peace and Development Council etc.) and members of their families.

32 –: Point J of Annex VI to the contested regulation.

33 –: Point 19 of the 2005 guidelines has, very regrettably, disappeared from the new version (document 17464/09 of 15 December 2009). In any event, these guidelines are obviously not binding.

34 –: See recital 2 in the preamble to Common Position 2007/750.

35 –: See recital 3 in the preamble to Common Position 2007/750; emphasis added.

36 –: See recital 1 in the preamble to the contested regulation.

37 –: .Idem.

38 –: Emphasis added.

39 –: Who are referred to in the preceding paragraph, paragraph 66.

40 –: In support of his argument, the appellant cites Case C-32/95 P Commission v Lisrestal and Others [1996] ECR I-5373 and Case C-315/99 P Ismeri Europa v Court of Auditors [2001] ECR I-5281.

41 –: Cases T-246/08 and T-332/08 Melli Bank v Council [2009] ECR II-2629.

42 –: Case T-390/08, Bank MelliIran v Council [2009] ECR II-3967.

43 –: The appellant mentions points 9, 10 and 17 of the Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the EU Common Foreign and Security Policy (document 15114/05 of 2 December 2005).

44 –: .Kadi, paragraph 326.

45 –: Case T-284/08 People’s Mojahedin Organization of Iran v Council [2008] ECR II-3487, paragraph 74.

46 –: Case T-85/09 Kadi v Commission [2010] ECR II-0000. The appellant refers here to paragraphs 123, 125 and 126 and paragraphs 129 to 142 of the judgment.

47 –: Case T-228/02 [2006] ECR II-4665, paragraph 159.

48 –: Footnote 41.

49 –: Case T-228/02 Organisation des Modjahedines du peuple d’Iran v Council [2006] ECR II-4665.

50 –: Paragraph 122 of the judgment under appeal.

51 –: .Organisation des Modjahedines du peuple d’Iran v Council, (paragraph 91).

52 –: See paragraph 123 of the judgment under appeal.

53 –: See point 67 of my Opinion in Case C-548/09 P Bank Melli Iran v Council, cited at footnote 28.

54 –: Case C-548/09 P Bank Melli Iran v Council, footnote 28.

55 –: . Bank Melli Iran v Council, footnote 28, paragraphs 45, 46 and 51.

56 –: .Kadi, paragraph 334.

57 –: .Ibid., paragraph 42.

58 –: .Bank Melli Iran v Council, paragraph 47.

59 –: Paragraph 124 of the judgment under appeal.

60 –: Paragraph 125 of the judgment under appeal.

61 –: See recital 4 in the preamble to Common Position 2006/318. Moreover, the contested regulation contains no indication that family members’ assets must also be frozen.

62 –: .Kadi, paragraphs 339 and 340.

63 –: .Ibid., paragraph 338.

64 –: .Ibid., paragraph 341.

65 –: See paragraphs 129 to 131 of the judgment under appeal.

66 –: .Ibid., paragraph 131.

67 –: .Ibid., paragraph 132.

68 –: Idem.

69 –: By analogy, see Organisation des Modjahedines du peuple d’Iran v Council, paragraph 162.

70 –: See paragraph 154 of that judgment.

71 –: Paragraphs 74 and 75.

72 –: .Melli Bank v Council, paragraphs 45 and 46, and Bank Melli Iran v Council, paragraphs 36 and 37, respectively.

73 –: .Kadi v Commission, paragraphs 126 and 132 to 135. For a summary of the General Court’s case-law on this subject, see paragraph 139 et seq. of that judgment.

74 –: .Kadi, paragraph 326.

75 –: Case C-550/09 E and F [2010] ECR I-0000, paragraph 57.

76 –: See points 254 and 255 of the Opinion of Advocate General Sharpston in Case C-27/09 P France v People’s Mojahedin Organization of Iran.

77 –: By the Commission’s own admission: see paragraph 41 of the Commission’s response.

78 –: See, from an extensive line of case-law, Case C-266/05 P Sison v Council [2007] ECR I-1233, paragraph 95 and the case-law cited, and Case C-514/07 P, C-528/07 P and C-532/07 P Sweden and Others v API and Commission [2010] ECR I-0000, paragraph 126 and the case-law cited.

79 –: In this connection, the appellant mentions document 7697/07 dated 3 April 2007, to which the Council itself refers in its response before the General Court.

80 –: .Organisation des Modjahedines du people d’Iran v Council, and Melli Bank v Council.

81 –: Paragraph 94 of the judgment under appeal and the case-law cited.

82 –: Case 294/81 Control Data Belgium v Commission [1983] ECR 911, paragraph 14.

83 –: Paragraph 99 et seq. of the judgment under appeal.

84 –: Paragraph 103 et seq. of the judgment under appeal.

85 –: See, by analogy, Bank Melli Iran v Council, paragraph 87.

86 –: See paragraph 104 of the judgment under appeal.

87 –: The adoption of Regulation No 353/2008, which includes a reference to other persons associated with the regime (see point 13 of this Opinion), did not improve the appellant’s situation in this regard.

88 –: See in particular recital 4 in the preamble to Common Position 2006/318.

89 –: Paragraph 107 of the judgment under appeal.

90 –: Paragraph 106 of the judgment under appeal.

91 –: See paragraph 157 of the judgment under appeal.

92 –: Paragraph 160 of the judgment under appeal and the case-law cited.

93 –: Paragraph 165 of the judgment under appeal and Article 13 of the contested regulation.

94 –: European Court of Human Rights, Bäck v. Finland, no. 37598/97, § 56, ECHR 2004-VII, and the case-law cited; Kadi, paragraph 368.

95 –: Paragraph 170 of the judgment under appeal.

96 –: See point 103 of this Opinion.

97 –: Cited above (point 14 of this Opinion).

98 –: .Kadi, paragraph 369.

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