BelTechExport v Council (Judgment) [2014] EUECJ T-438/11 (09 December 2014)

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(Common foreign and security policy – Restrictive measures adopted against Belarus – Freezing of funds – Obligation to state reasons – Rights of the defence – Right to be heard)

BelTechExport ZAO, established in Minsk (Belarus), represented by V. Vaitkutė Pavan, A. Smaliukas, E. Matulionyte, T. Milašauskas, lawyers, and M. Shenk, Solicitor,

Council of the European Union, represented by M. Bishop and F. Naert, acting as Agents,

European Commission, represented by T. Scharf and E. Paasivirta, acting as Agents,

APPLICATION for annulment of Council Decision 2011/357/CFSP of 20 June 2011 amending Decision 2010/639/CFSP concerning restrictive measures against certain officials of Belarus (OJ 2011 L 161, p. 25), Council Regulation (EU) No 588/2011 of 20 June 2011 amending Regulation (EC) No 765/2006 concerning restrictive measures against President Lukashenko and certain officials of Belarus (OJ 2011 L 161, p. 1), Council Decision 2011/666/CFSP of 10 October 2011 amending Decision 2010/639/CFSP concerning restrictive measures against Belarus (OJ 2011 L 265, p. 17), Council Implementing Regulation (EU) No 1000/2011 of 10 October 2011 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in respect of Belarus (OJ 2011 L 265, p. 8), Council Decision 2012/642/CFSP of 15 October 2012 concerning restrictive measures against Belarus (OJ 2012 L 285, p. 1), Council Implementing Regulation (EU) No 1017/2012 of 6 November 2012 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in respect of Belarus (OJ 2012 L 307, p. 7), Council Decision 2013/534/CFSP of 29 October 2013 amending Decision 2012/642 (OJ 2013 L 288, p. 69), and Council Implementing Regulation (EU) No 1054/2013 of 29 October 2013 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in respect of Belarus (OJ 2013 L 288, p. 1), in so far as those acts concern the applicant,

composed of H. Kanninen (Rapporteur), President, I. Pelikánová and E. Buttigieg, Judges,

having regard to the written procedure and further to the hearing on 28 January 2014,

1 On 24 September 2004 the Council of the European Union, in view of the deterioration of democracy, the rule of law and human rights in Belarus, associated in particular with the fact that no independent, full and credible investigation of the crimes examined by the Parliamentary Assembly of the Council of Europe in its report adopted on 28 April 2004 had been carried out, adopted Council Common Position 2004/661/CFSP concerning restrictive measures against certain officials of Belarus (OJ 2004 L 301, p. 67), taking the form of preventing their entry into, or transit through, the territories of the Member States.

2 On 13 December 2004 the Council adopted Common Position 2004/848/CFSP amending Common Position 2004/661 (OJ 2004 L 367, p. 35) in order to expand the scope of the restrictive measures laid down by the latter Common Position to persons directly responsible for the fraudulent elections and referendum in Belarus on 17 October 2004 and those responsible for severe human rights violations in the repression of peaceful demonstrators in the aftermath of those elections and that referendum.

3 On 24 March 2006 the European Council deplored the failure of the Belarusian authorities to meet OSCE (Organisation for Security and Cooperation in Europe) commitments to democratic elections, considered that the Presidential elections of 19 March 2006 were fundamentally flawed and condemned the action of the Belarusian authorities of that day in arresting peaceful demonstrators protesting against the conduct of the Presidential elections.

4 The Council decided that the European Union should adopt restrictive measures against President Lukashenko, the Belarusian leadership and officials responsible for the violations of international electoral standards and the crackdown on civil society and democratic opposition and, on 10 April 2006, adopted Common Position 2006/276/CFSP concerning restrictive measures against certain officials of Belarus and repealing Common Position 2004/661 (OJ 2006 L 101, p. 5), taking the form of preventing the entry into, or transit through, the territories of the Member States of President Lukashenko, the Belarusian leadership and certain officials.

5 By means of Common Position 2006/362/CFSP of 18 May 2006 amending Common Position 2006/276 (OJ 2006 L 134, p. 45), the Council also provided that the funds and economic resources of President Lukashenko and certain officials of Belarus should be frozen.

6 On the same date, considering that a regulation was necessary in order to implement at Community level the measures described in Common Position 2006/362, the Council adopted, on the basis of, inter alia, Articles 60 EC and 301 EC, Council Regulation (EC) No 765/2006 concerning restrictive measures against President Lukashenko and certain officials of Belarus (OJ 2006 L 144, p. 1).

7 On 25 October 2010, by means of Decision 2010/639/CFSP concerning restrictive measures against certain officials of Belarus (OJ 2010 L 280, p. 18), the Council renewed certain restrictive measures until 31 October 2011 and repealed Common Position 2006/276.

8 On 31 January 2011 the Council adopted Decision 2011/69/CFSP amending Decision 2010/639 (OJ 2011 L 28, p. 40). Article 2(1)(b) of Decision 2010/639, as amended by Decision 2011/69 provides: ‘All funds and economic resources belonging to … persons who are responsible … for the violations of international electoral standards in the presidential elections in Belarus on 19 December 2010, and the crackdown on civil society and democratic opposition, and those natural or legal persons, entities or bodies associated with them, as listed in Annex IIIA, shall be frozen’.

9 On the same date the Council adopted Implementing Regulation (EU) No 84/2011 amending Regulation No 765/2006 (OJ 2011 L 28, p. 17). Under Article 2(1) and (5) of Regulation No 765/2006, as amended by Implementing Regulation No 84/2011, all funds and economic resources of persons and entities listed in Annex IA were to be frozen, that annex containing the names of persons responsible for the violations of international electoral standards in the Presidential elections in Belarus on 19 December 2010, and for the crackdown on civil society and democratic opposition, and those natural or legal persons, entities or bodies associated with them.

10 By Council Decision 2011/357/CFSP of 20 June 2011 amending Decision 2010/639 (OJ 2011 L 161, p. 25), the Council decided, in view of the gravity of the situation in Belarus, that additional persons and entities should be included in the list of those subject to restrictive measures as set out in Annex IIIA to Decision 2010/639 (‘Annex IIIA’), one such entity being the applicant, BelTechExport ZAO, with the entry ‘Entity controlled by [Vladimir Peftiev]’.

11 In order to implement at European Union level the measures described in Decision 2011/357, the Council adopted, on the basis of, inter alia, Article 215 TFEU, Regulation (EU) No 588/2011 of 20 June 2011, amending Regulation No 765/2006 (OJ 2011 L 161, p. 1), which includes the applicant’s name in the list in Annex IA to Regulation No 765/2006 (‘Annex IA’), with the entry ‘Entity controlled by [Vladimir Peftiev]’.

12 By letter dated 21 June 2011, the Council informed the applicant of the listing of its name in Annex IA, as amended by Regulation No 588/2011, and in Annex IIIA, as amended by Decision 2011/357.

13 On the same date the Council published in the Official Journal of the European Union a notice for the attention of the persons and entities to which restrictive measures provided for in Decision 2010/639, as amended by Decision 2011/357, and in Regulation No 765/2006, as amended by Regulation No 588/2011 concerning restrictive measures against Belarus, apply (OJ 2011 C 180, p. 9).

14 By letter of 8 July 2011, the applicant requested that the Council disclose to it the grounds for its listing in Annex IIIA and Annex IA.

15 On 2 August 2011 the Council informed the applicant that it was examining its request and that the applicant would be notified of the Council’s response.

16 On 8 August 2011 the applicant requested that the Council reconsider its listing in Annex IIIA and Annex IA.

17 By means of Decision 2011/666/CFSP of 10 October 2011, amending Decision 2010/639 (OJ 2011 L 265, p. 17), the Council (i) extended the restrictive measures laid down in Decision 2010/639 until 31 October 2012, (ii) added names to the list in Annex IIIA and (iii) amended the entries relating to certain persons and entities in Annex IIIA. The entries relating to the applicant were not amended by Decision 2011/666.

18 By Implementing Regulation (EU) No 1000/2011 of 10 October 2011, implementing Article 8a(1) of Regulation No 765/2006 (OJ 2011 L 265, p. 8), the Council added certain persons to the list in Annex IA and amended the entries concerning certain persons and entities in Annex IA. The entries relating to the applicant were not amended by Implementing Regulation No 1000/2011.

19 On 11 October 2011 the Council published in the Official Journal a notice for the attention of the persons to which restrictive measures provided for in Decision 2010/639, as amended by Decision 2011/666, and in Regulation No 765/2006, as implemented by Implementing Regulation No 1000/2011, apply (OJ 2011 C 299, p. 4).

20 On 7 November 2011 the applicant renewed its request to the Council for the disclosure of the grounds for its listing in Annex IIIA and in Annex IA and for the reconsideration of that listing.

21 On 14 November 2011 the Council replied to the applicant’s request of 8 August 2011, stating, inter alia, that the reason why it was listed in Annex IIIA and Annex IA was the fact that it was an entity controlled by Mr Peftiev, who was designated in those lists as a person associated with President Lukashenko and his family, and not the fact that it was responsible for violations of international electoral standards in the 2010 Presidential elections in Belarus or for the crackdown on civil society and democratic opposition. The Council added that it considered that Mr Peftiev controlled the applicant, since he was its largest shareholder, owning 70% of its shares, and that he was the Chairman of the Council of its shareholders.

22 On 10 January 2012 the applicant requested access to the file concerning it in order to be informed of the reasons for its listing in Annex IIIA and in Annex IA.

23 By letter of 17 February 2012, the Council replied to the applicant’s letters of 7 November 2011 and 10 January 2012 and gave it access to certain documents.

24 By means of Council Decision 2012/642/CFSP of 15 October 2012 concerning restrictive measures against Belarus (OJ 2012 L 285, p. 1), the Council extended the restrictive measures laid down in Decision 2010/639 until 31 October 2013 and updated the information concerning the persons and entities whose names are listed therein. Further, the measures imposed by Decision 2010/639 were integrated into Decision 2012/642, which brought together in a single annex the names of the persons and entities who were subject to restrictive measures.

(a) persons, entities or bodies responsible for serious violations of human rights or the repression of civil society and democratic opposition, or whose activities otherwise seriously undermine democracy or the rule of law in Belarus, or any natural or legal persons, entities or bodies associated with them, as well as legal persons, entities or bodies owned or controlled by them;

(b) natural or legal persons, entities or bodies benefiting from or supporting the Lukashenka regime, as well as legal persons, entities or bodies owned or controlled by them,

26 The Annex to Decision 2012/642 contains the name of the applicant with the following entry:

‘Entity formerly owned by Vladimir Peftiyev. Its majority shareholder is Dmitry Gurinovich, Mr Peftiyev’s former advisor in Velcom. Beltechexport benefits from the regime as the main exporter of arms and military equipment owned by the state or produced by state-owned companies. It supports and provides revenue to the Lukashenka regime by its sale of arms.’

27 Article 2 of Regulation No 765/2006 was amended by Regulation (EU) No 1014/2012 of 6 November 2012 amending Regulation No 765/2006 (OJ 2012 L 307, p. 1) to read as follows:

‘1. All funds and economic resources belonging to, or owned, held or controlled by the natural or legal persons, entities or bodies listed in Annex I shall be frozen.

4. Annex I shall consist of a list of the natural or legal persons, entities and bodies who, in accordance with point (a) of Article 4(1) of … Decision 2012/642 …, have been identified by the Council as being responsible for serious violations of human rights or the repression of civil society and democratic opposition, or whose activities otherwise seriously undermine democracy or the rule of law in Belarus, or any natural or legal persons, entities and bodies associated with them, as well as legal persons, entities and bodies owned or controlled by them.

5. Annex I shall also consist of a list of the natural or legal persons, entities and bodies who, in accordance with point (b) of Article 4(1) of Decision 2012/642 …, have been identified by the Council as benefiting from or supporting the Lukashenka regime, as well as legal persons, entities and bodies owned or controlled by them.’

28 By Council Implementing Regulation (EU) No 1017/2012 of 6 November 2012 implementing Article 8a(1) of Regulation No 765/2006 (OJ 2012 L 307, p. 7), the Council consolidated in a single annex, namely Annex I, the texts of Annexes I, IA and IB to Regulation No 765/2006.

29 Under Implementing Regulation No 1017/2012, the applicant was listed in Annex I to Regulation No 765/2006 with an entry identical to that in the Annex to Decision 2012/642, referred to in paragraph 26 above.

30 By letter of 7 November 2012, the Council informed the applicant that it would continue to be included in the lists of persons and entities subject to restrictive measures (‘the lists’) and that the grounds for that continued listing were stated in the Annex to Decision 2012/642 and in Annex I to Regulation No 765/2006.

31 By Decision 2013/534/CFSP of 29 October 2013 amending Decision 2012/642 (OJ 2013 L 288, p. 69), the Council extended the restrictive measures provided for in Decision 2012/642 until 31 October 2014 and, inter alia, updated information relating to certain persons and entities listed in the Annex to Decision 2012/642. The grounds for the applicant’s listing were not altered from those stated in Decision 2012/642, as quoted in paragraph 26 above.

32 By Council Implementing Regulation (EU) No 1054/2013 of 29 October 2013 implementing Article 8a(1) of Regulation No 765/2006 (OJ 2013 L 288, p. 1), the Council, inter alia, updated information relating to certain persons and entities listed in Annex I to Regulation No 765/2006.

33 Annex I to Regulation No 765/2006, as amended by Implementing Regulation No 1054/2013, contains the name of the applicant with an entry identical to that in the Annex to Decision 2012/642, quoted in paragraph 26 above.

34 On 30 October 2013 the Council notified the applicant of the continuation of its listing, by Decision 2013/534 and Implementing Regulation No 1054/2013.

35 By application lodged at the Court’s Registry on 12 August 2011, the applicant brought this action for the annulment of Decision 2011/357 and Regulation No 588/2011, in so far as those acts concerned it.

36 By separate document, also lodged at the Registry on 12 August 2011, the applicant applied for the case to be decided under an expedited procedure pursuant to Article 76a of the Court’s Rules of Procedure. The Court (Eighth Chamber) rejected that request.

37 By document lodged at the Court’s Registry on 28 October 2011 the European Commission sought leave to intervene in the present proceedings in support of the Council.

38 On 25 November 2011 this case was re-allocated to the Sixth Chamber of the Court.

39 By document lodged at the Court’s Registry on 30 November 2011, the applicant requested confidentiality, vis-à-vis the Commission, of certain information and produced, for that purpose, a non‑confidential version of the application and its annexes and of the request for an expedited procedure.

40 By document lodged at the Court’s Registry on 12 December 2011, the applicant adapted its heads of claim so that the action should also seek the annulment of Decision 2011/666 and Implementing Regulation No 1000/2011. In the rejoinder, the Council stated that it had no objections to that adaptation of the forms of order sought in the action, in so far as the action was also to seek annulment of Decision 2011/666. The Council stated, however, that the applicant should not be allowed to extend the subject-matter of its action to include Implementing Regulation No 1000/2011, given that that regulation did not concern it.

41 By order of 10 January 2012, the President of the Sixth Chamber of the Court granted leave to the Commission to intervene in support of the forms of order sought by the Council and decided that non-confidential versions of the procedural documents would be sent to the Commission. The Commission submitted no objections to the applicant’s application for confidentiality.

42 By letter lodged at the Court’s Registry on 24 February 2012, the Commission waived its right to submit a statement in intervention.

43 On 13 November 2012, as a measure of organisation of procedure provided for by Article 64 of the Rules of Procedure, the Court sent a written question to the applicant relating to the individual notification of its listing. The applicant responded by letter lodged at the Court’s Registry on 16 November 2012.

44 By document lodged at the Court’s Registry on 14 December 2012, the applicant adapted its heads of claim so that the action should also seek the annulment of Decision 2012/642 and Implementing Regulation No 1017/2012. By letters lodged at the Court’s Registry on 24 and 28 January 2013 respectively, the Commission and the Council stated that they had no objections to that adaptation of the forms of order sought in the action.

45 On 23 September 2013 this case was re-allocated to the First Chamber of the Court.

46 Upon hearing the report of the Judge-Rapporteur, the Court (First Chamber) decided to open the oral procedure.

47 On 30 October 2013, as a measure of organisation of procedure provided for in Article 64 of the Rules of Procedure, the Court asked the Council to send to it a copy of the notice referred to in paragraph 13 above, which the Council duly did.

48 By letter of 14 January 2014, the Commission informed the Court that it would not attend the hearing.

49 The parties presented oral argument and replied to questions put by the Court at the hearing on 28 January 2014.

50 At the hearing, the applicant adapted its claims so that the action should also be directed to the annulment of Decision 2013/534 and Implementing Regulation No 1054/2013.

– annul Decision 2011/357, Regulation No 588/2011, Decision 2011/666, Implementing Regulation No 1000/2011, Decision 2012/642, Implementing Regulation No 1017/2012, Decision 2013/534 and Implementing Regulation No 1054/2013, in so far as they concern it;

53 As stated in paragraphs 40, 44 and 50 above, after the initiating application was lodged, the applicant sought to adapt the heads of claim in its action for annulment so that the action should be directed against not only Decision 2011/357 and Regulation No 588/2011, but also Decision 2011/666, Implementing Regulation No 1000/2011, Decision 2012/642, Implementing Regulation No 1017/2012, Decision 2013/534 and Implementing Regulation No 1054/2013, in so far as those acts concern it.

54 It is to be borne in mind in this connection that, when a decision or a regulation of direct and individual concern to an individual is replaced, during the proceedings, by another measure with the same subject‑matter, this is to be considered a new factor allowing the applicant to adapt its claims and pleas in law. It would be contrary to the principle of due administration of justice and to the requirements of procedural economy to oblige the applicant to make a fresh application. Moreover, it would be inequitable if the institution in question were able, in order to counter criticisms of a measure, contained in an application to the Courts of the European Union, to amend the contested measure or to substitute another for it and to rely in the proceedings on such an amendment or substitution in order to deprive the other party of the opportunity of extending his original pleadings to the later measure or of submitting supplementary pleadings directed against that measure (see, to that effect, Case T‑256/07 People’s Mojahedin Organization of Iran v Council [2008] ECR II‑3019, paragraph 46, and Case T‑110/12 Iranian Offshore Engineering & Construction v Council [2013] ECR, paragraph 16).

55 By Decision 2011/666, the Council extended until 31 October 2012 the restrictive measures to which the applicant was subject by reason of its listing in Annex IIIA.

56 It is clear that the claims directed against Decision 2011/666 were lodged at the Court’s Registry within the period for bringing proceedings laid down by the sixth paragraph of Article 263 TFEU, in accordance with the case-law, extended on account of distance by the single period of 10 days provided for by Article 102(2) of the Rules of Procedure (see, to that effect, Joined Cases T‑35/10 and T‑7/11 Bank Melli Iran v Council [2013] ECR, paragraph 55, and Case T‑8/11 Bank Kargoshaei and Others v Council [2013] ECR, paragraph 40).

57 The adaptation of the heads of claim in the action so that the action should be directed against Decision 2011/666 must therefore be accepted. The Council has not, it may be added, objected to such an adaptation of the heads of claim by the applicant.

58 As stated by the Council, Implementing Regulation No 1000/2011 merely adds further names to the list in Annex IA but does not alter either the applicant’s inclusion in that list or the reason for that listing. The Council concludes that the adaptation of the heads of claim so that the action should also be directed against Implementing Regulation No 1000/2011 should be declared to be inadmissible since that act does not concern the applicant.

59 In that regard, it should be recalled that persons other than those to whom an act is addressed can claim to be individually concerned within the meaning of the fourth paragraph of Article 263 TFEU only if the act affects them by reason of certain attributes peculiar to them or by reason of a factual situation which differentiates them from all other persons and thereby distinguishes them individually in the same way as the addressee (Case 25/62 Plaumann v Commission [1963] ECR 95, 107; order of 26 November 2009 in Case C‑444/08 P Região autónoma dos Açores v Council, not published in the ECR, paragraph 36; and Case T‑49/07 Fahas v Council [2010] ECR II‑5555, paragraph 33).

60 It is necessary therefore to determine whether, although Implementing Regulation No 1000/2011 did not amend Regulation No 588/2011 as regards the applicant, that Implementing Regulation is nonetheless of direct and individual concern to the applicant.

61 It is plain, first, that the Council was obliged to review the list in Annex IA at regular intervals, and at least every 12 months, in accordance with Article 8a(4) of Regulation No 765/2006, in the version applicable to this case, and, second, that Implementing Regulation No 1000/2011 supplements the list in Annex IA, but does not repeal it, so that, after the adoption of that regulation, the applicant continues to be listed in Annex IA. Further, it must be observed that Implementing Regulation No 1000/2011 implemented Decision 2011/666 under Article 215 TFEU, that decision undertaking a review of Decision 2010/639 and extending the existing restrictive measures. In the light of the foregoing, the reference, by Implementing Regulation No 1000/2011, to Annex IA of Regulation No 765/2006 is a manifestation of the Council’s intention to continue the listing of the applicant in that annex and, consequently, to continue the restrictive measures affecting the applicant. In those circumstances, it must be held that Implementing Regulation No 1000/2011 is of direct and individual concern to the applicant (see, to that effect, Fahas v Council, paragraph 59 above, paragraphs 34 and 35).

62 Further, the forms of order seeking annulment of Implementing Regulation No 1000/2011 were lodged at the Court’s Registry within the period for bringing proceedings laid down by the sixth paragraph of Article 263 TFEU, extended on account of distance by the single period of 10 days provided for by Article 102(2) of the Rules of Procedure.

63 The adaptation of the heads of claim in the action so that it should be directed against Implementing Regulation No 1000/2011 must therefore be held to be admissible, and the Council’s objection of inadmissibility must be rejected.

64 The applicant’s name is reproduced in the Annex to Decision 2012/642, which extends until 31 October 2013 the restrictive measures to which the applicant is subject, and in Annex I to Implementing Regulation No 1017/2012. In addition, those acts substantially altered the reasons for the listing of the applicant, as stated in paragraphs 26 and 29 above.

65 Further, the forms of order seeking annulment of Decision 2012/642 and Implementing Regulation No 1017/2012 were lodged at the Court’s Registry within the period for bringing proceedings laid down by the sixth paragraph of Article 263 TFEU, extended on account of distance by the single period of 10 days provided for by Article 102(2) of the Rules of Procedure.

66 The adaptation of the heads of claim so that the subject‑matter of the action should include the annulment of Decision 2012/642 and Implementing Regulation No 1017/2012 must therefore be declared to be admissible. It may be added that the Council did not object to that adaptation.

67 It must be recalled that, in order to be admissible, a request to adapt the form of order sought must be lodged within the period for bringing proceedings provided for in the sixth paragraph of Article 263 TFEU. It has consistently been held that that time‑limit for bringing proceedings is mandatory and must be applied by the Courts of the European Union, where necessary of their own motion, in such a way as to safeguard legal certainty and equality of persons before the law (see, to that effect, Iranian Offshore Engineering & Construction v Council, paragraph 54 above, paragraph 17, and Bank Kargoshaei and Others v Council, paragraph 56 above, paragraph 40).

68 As regards the calculation of the time-limit for bringing an action, it should be borne in mind that, under the sixth paragraph of Article 263 TFEU, an action for annulment must be brought within two months of the publication of the contested measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be.

69 According to the case-law, the principle of effective judicial protection means that the European Union authority which adopts individual restrictive measures against a person or entity, as in the present case, is bound to communicate the grounds on which those measures are based, either when those measures are adopted or, at the very least, as swiftly as possible after they have been adopted, in order to enable those persons or entities to exercise their right to bring an action (see, to that effect, Case C‑548/09 P Bank Melli Iran v Council [2011] ECR I‑11381, paragraph 47, and Iranian Offshore Engineering & Construction v Council, paragraph 54 above, paragraph 19).

70 In this case, that principle is given effect in Article 6(2) of Decision 2012/642 and in Article 8a(2) of Regulation No 765/2006, in the version applicable at the material time, which provide that the Council is to communicate its decision, including the grounds for listing as one of the persons or entities subject to restrictive measures, to the person concerned, either directly, if the address is known, or through the publication of a notice, providing such person with an opportunity to present observations.

71 It follows that the period for bringing annulment proceedings against an act imposing restrictive measures on a person or entity starts to run only from the date of the individual communication of that act to the party concerned, if the address is known, or from the date of the publication of a notice in the Official Journal, if not. Similarly, the period for the submission of an application seeking to extend the claims and pleas in law to an act which repeals and replaces the contested act imposing the restrictive measures, and which maintains those measures, begins to run only from the date of the individual communication of that new act to the person or the entity concerned, if the address is known, or from the date of the publication of a notice in the Official Journal, if individual communication is impossible (see, to that effect, Iranian Offshore Engineering & Construction v Council, paragraph 54 above, paragraph 21).

72 In that regard, it must be observed that, while, in the case which gave rise to the judgment in Case T‑53/12 CF Sharp Shipping Agencies v Council [2012] ECR, relied on by the applicant at the hearing, the Court accepted, in the circumstances of that case, adaptations to the heads of claim which were lodged late, a number of judgments of the Court, subsequent to that judgment, have reiterated in clear language that requests to adapt the forms of order sought must be submitted within the period for bringing proceedings laid down in the sixth paragraph of Article 263 TFEU (see, to that effect, Joined Cases T‑35/10 and T‑7/11, Bank Melli Iran v Council, paragraph 56 above, paragraph 55, and Bank Kargoshaei and Others v Council, paragraph 56 above, paragraph 40).

73 In this case, it is undisputed that Decision 2013/534 and Implementing Regulation No 1054/2013 were notified to the applicant by the Council’s letter of 30 October 2013. The period of two months for bringing proceedings against those acts, as laid down by the sixth paragraph of Article 263 TFEU, extended on account of distance by the single period of 10 days provided for by Article 102(2) of the Rules of Procedure, therefore expired on 9 January 2014.

74 Yet the adaptation of the heads of claim so that the action should also seek the annulment of Decision 2013/534 and Implementing Regulation No 1054/2013 was submitted in the course of the hearing on 28 January 2014, that is, more than 2 months and 10 days after the notification to the applicant of the acts at issue. That adaptation must therefore be rejected as being out of time, as contended by the Council at the hearing.

75 The adaptation of the forms of order sought by the applicant must therefore be accepted solely in so far as the subject-matter of the action is to be extended to Decisions 2011/666 and 2012/642 and Implementing Regulations No 1000/2011 and No 1017/2012 (those acts, together with Decision 2011/357 and Regulation No 588/2011, being hereinafter referred to as ‘the contested acts’).

76 In support of the action, the applicant relies on five pleas in law: (i) infringement of the obligation to state reasons, (ii) infringement of the rights of the defence and the right to be heard, (iii) manifest errors of assessment, (iv) infringement of the right to property and (v) infringement of the principle of proportionality.

77 The applicant claims, in essence, that it is not in a position to know what the actual and specific reasons are for its being listed. The applicant also claims that the Court is unable to exercise its power to review the legality of the contested acts. In that regard, the applicant argues, first, that the ground for its listing by means of Decision 2011/357 and Regulation No 588/2011, namely ‘Entity controlled by [Vladimir Peftiev]’ is vague and general. The applicant then submits that the ground for its listing is even more general and ambiguous than those debated in the case which gave rise to the judgment in Case T‑86/11 Bamba v Council [2011] ECR II‑2749, which held that the ground at issue was not capable of being a sufficient reason for inclusion in a list of persons subject to restrictive measures. The applicant also cites the judgment of 16 September 2011 in Case T‑316/11 Kadio Morokro v Council, not published in the ECR, and the judgment in Case T‑562/10 HTTS v Council [2011] ECR II-8087, as requiring the Council to communicate to the person concerned reasons which are sufficient and specific for that person’s listing. According to the applicant, those judgments show a clear tendency on the part of the Court to depart from the approach maintained in Case T‑181/08 Tay Za v Council [2010] ECR II‑1965. Further, the applicant claims that the ground ‘Entity controlled by [Vladimir Peftiev]’ is not sufficient to demonstrate the link between it and the regime and, in particular, how it is responsible for the violations of international electoral standards which marked the Presidential elections of 19 December 2010 in Belarus or how it participated in the crackdown on civil society and democratic opposition.

78 The Council’s response, in essence, is that the statement of reasons in the contested acts indicates in a sufficiently clear and detailed manner, first, the reasons why it adopted restrictive measures against Belarus, second, the criteria used for the listing of persons and entities who were to be the subject of restrictive measures and, third, the reasons why the Council considers that the applicant is covered by those criteria. In that regard, the Council states that it has never claimed that the applicant is associated with the regime or that it is responsible for, or participated in, the violations of international electoral standards which marked the Presidential elections of 19 December 2010 in Belarus or the crackdown on civil society and democratic opposition. According to the Council, the applicant is listed solely on the ground that it is controlled by Mr Peftiev, who is considered to be associated with President Lukashenko and his family. The Council also considers that it is clear from the application that the applicant understood why it had been listed. The Council submits, last, that the applicant’s situation is very different from that of the applicant in the case which gave rise to the judgment in Bamba v Council, paragraph 77 above, and observes that that judgment was set aside by the Court of Justice on 15 November 2012, by the judgment in Case C‑417/11 P Council v Bamba [2012] ECR.

79 According to settled case-law, the purpose of the obligation to state the reasons for an act adversely affecting a person, as laid down in the second paragraph of Article 296 TFEU, is, first, 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 which may permit its validity to be contested before the Courts of the European Union and, second, to enable the latter to review the lawfulness of the act (see, to that effect, Case C‑199/99 P Corus UK v Commission [2003] ECR I‑11177, paragraph 145; Council v Bamba, paragraph 78 above, paragraph 49; and Fahas v Council, paragraph 59 above, paragraph 51).

80 The statement of reasons required by Article 296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the act in such a way as to enable the person concerned to ascertain the reasons for the measures and to enable the court having jurisdiction to exercise its power of review (see, to that effect, Joined Cases C‑539/10 P and C‑550/10 P Al-Aqsa v Council and Netherlands v Al-Aqsa [2012] ECR, paragraph 138, and Council v Bamba, paragraph 78 above, paragraph 50).

81 Where the person concerned is not afforded the opportunity to be heard before the adoption of an initial decision to freeze funds, compliance with the obligation to state reasons is all the more important because it constitutes the sole safeguard enabling the person concerned, at least after the adoption of that decision, to make effective use of the legal remedies available to him in order to challenge the lawfulness of that decision (Council v Bamba, paragraph 78 above, paragraph 51).

82 Therefore, the statement of reasons for an act of the Council which imposes a restrictive measure must identify not only the legal basis of that measure but also the actual and specific reasons why the Council considers, in the exercise of its discretion, that that measure must be adopted in respect of the person concerned (see, to that effect, Council v Bamba, paragraph 78 above, paragraph 52, and Case T‑390/08 Bank Melli Iran v Council [2009] ECR II‑3967, paragraph 83).

83 The statement of reasons required by Article 296 TFEU must, however, be appropriate to the act at issue and the context in which it was adopted. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the statement of reasons to go into all the relevant facts and points of law, since the question whether it meets the requirements must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see, to that effect, Al-Aqsa v Council and Netherlands v Al‑Aqsa, paragraph 80 above, paragraphs 139 and 140, and Council v Bamba, paragraph 78 above, paragraph 53).

84 In particular, the reasons given for a measure adversely affecting a person are sufficient if it was adopted in circumstances known to the party concerned which enable him to understand the scope of the measure concerning him (Council v Bamba, paragraph 78 above, paragraph 54).

85 It follows that, in order to determine whether the contested acts satisfy the obligation to state reasons, it is necessary to ascertain whether, in the grounds stated in those acts, the Council set out, in a manner that is comprehensible and sufficiently precise, the reasons that led it to conclude that the applicant’s listing was justified in the light of the legal criteria applicable.

86 First, it must be held that the background to the imposition of restrictive measures on the applicant was known to it, a fact which, it may be said, the applicant does not dispute. Suffice it to observe, in that regard, that the acts at issue all mention, in the recitals in their preambles, the ‘gravity of the situation’ in Belarus and refer to Decision 2010/639 and Regulation No 725/2006, which themselves refer to Common Position 2006/276, cited in paragraph 4 above, and Common Position 2006/362, cited in paragraph 5 above, which describe the political background in Belarus.

87 Second, as regards the reasons why restrictive measures are specifically imposed on the applicant, it must be recalled that, by means of Decision 2011/357, Regulation No 588/2011, Decision 2011/666 and Implementing Regulation No 1000/2011, the Council listed, then maintained the listing of, the applicant on the ground that it was an ‘Entity controlled by [Vladimir Peftiev]’.

88 It is clear from the case-law that when the funds of a person or an entity already subject to restrictive measures are frozen, there is a not insignificant danger that that person or entity may exert pressure on the entities it owns or controls or which belong to it in order to circumvent the effect of the measures applying to it. Consequently, the freezing of the funds of such entities is necessary and appropriate in order to ensure the effectiveness of the measures adopted and to ensure that those measures are not circumvented (see, to that effect, Case T‑492/10 Melli Bank v Council [2013] ECR, paragraph 55).

89 However, that case-law is applicable solely on the condition that the acts by means of which the restrictive measures at issue were adopted provide for the application of those measures to legal persons or entities owned or controlled by those persons already subject to those measures (see, to that effect, Case C‑380/09 P Melli Bank v Council [2012] ECR, paragraphs 39 and 75 to 79, and Case T‑492/10 Melli Bank v Council, paragraph 88 above, paragraphs 55 and 56).

90 However, when Decision 2011/357, Regulation No 588/2011, Decision 2011/666 and Implementing Regulation No 1000/2011 were adopted, it was stated in Article 2(1)(b) of Decision 2010/639 and Article 2(1) and (5) of Regulation No 765/2006 that the only persons subject to Annex IIIA and Annex IA were, first, the persons responsible for the violations of international electoral standards in the Presidential elections of 19 December 2010 in Belarus and for the crackdown on civil society and democratic opposition and, second, the natural or legal persons, entities and bodies associated with them.

91 When Decision 2011/357, Regulation No 588/2011, Decision 2011/666 and Implementing Regulation No 1000/2011 were adopted, neither Decision 2010/639 nor Regulation No 765/2006, in the versions applicable to this case, made any provision for the Council being able to list legal persons, entities or bodies owned or controlled by other listed persons or entities. The Council made provision for that option in Article 4(1) of Decision 2012/642 and in Article 2 of Regulation No 765/2006, as amended by Regulation No 1014/2012, in other words subsequent to the adoption of Decision 2011/357, Regulation No 588/2011, Decision 2011/666 and Implementing Regulation No 1000/2011.

92 In this case, it is plain that, on the basis of the statement of reasons in Decision 2011/357, Regulation No 588/2011, Decision 2011/666 and Implementing Regulation No 1000/2011, the applicant cannot be included in either of the two categories defined in paragraph 90 above. That statement of reasons does not concern either a natural person responsible for the violations of international electoral standards which marked the Presidential elections of 19 December 2010 in Belarus or for the crackdown on civil society and democratic opposition, or an entity associated with those responsible and affected by the provisions cited in paragraph 90 above.

93 It follows that the statement of reasons for the listing of the applicant in Annex IIIA and Annex IA, by means of Decision 2011/357, Regulation No 588/2011, Decision 2011/666 and Implementing Regulation No 1000/2011, namely ‘Entity controlled by [Vladimir Peftiev]’, did not enable the applicant, having regard to the provisions cited in paragraph 90 above, to understand why it had been listed in those annexes, since it did not enable the applicant to determine which criterion the Council had relied on as justification for the adoption of restrictive measures.

94 On the other hand, as regards the statement of reasons for the listing of the applicant by means of Decision 2012/642 and Implementing Regulation No 1017/2012, it must be recalled that, under Article 4(1)(b) of Decision 2012/642 and Article 2(5) of Regulation No 765/2006, as amended by Regulation No 1014/2012, the persons and entities to be listed are, in particular, ‘natural or legal persons, entities or bodies benefiting from or supporting the Lukashenka regime, as well as legal persons, entities or bodies owned or controlled by them’.

95 As stated in paragraphs 26 and 29 above, Decision 2012/642 and Implementing Regulation No 1017/2012 maintained the applicant’s listing on the ground that it benefits from and supports the regime of President Lukashenko.

96 Having regard to the provisions cited in paragraph 94 above, the applicant was therefore in a position to understand why its listing had been continued by means of Decision 2012/642 and Implementing Regulation No 1017/2012. The applicant was moreover able effectively to challenge the merits of its continued listing by means of those two acts, which was demonstrated by the arguments advanced at the hearing.

97 In those circumstances, it must be held that the statement of reasons in Decision 2012/642 and Implementing Regulation No 1017/2012 is sufficient in so far as the applicant is concerned.

98 That conclusion cannot be rebutted by the applicant’s reference to the judgment in Bamba v Council, paragraph 77 above. It must be recalled that the sufficiency of the statement of reasons must be assessed on a case-by-case basis, according to the circumstances of the particular case. The reasons stated for the listing of the applicant in the case which gave rise to the judgment in Bamba v Council, paragraph 77 above, differ from those which caused the applicant in this case to be listed. The ruling in Bamba v Council, paragraph 77 above, cannot therefore be transposed to this case. In any event, it must be noted that the judgment in Bamba v Council, paragraph 77 above, was set aside by the Court of Justice on the ground that the General Court had erred in holding that the statement of reasons in the contested decision was insufficient. Further, it must be added that while it is true that the judgments in Kadio Morokro v Council and HTTS v Council, paragraph 77 above, post‑date the judgment in Tay Za v Council, paragraph 77 above, they precede the judgment in Bamba v Council, paragraph 77 above.

99 It follows that the plea in law concerning an infringement of the obligation to state reasons must be upheld with regard to Decision 2011/357, Regulation No 588/2011, Decision 2011/666 and Implementing Regulation No 1000/2011, in so far as those acts concern the applicant, and must be rejected with regard to Decision 2012/642 and Implementing Regulation No 1017/2012.

100 Consequently, the other pleas in the action will be examined solely in so far as they concern Decision 2012/642 and Implementing Regulation No 1017/2012.

The plea concerning infringement of the rights of the defence and the right to be heard

101 The applicant claims that the contested acts are contrary to its rights of defence and its right to a fair hearing, within the meaning of Article 47 of the Charter of Fundamental Rights of the European Union, and Articles 6 and 13 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950.

102 The applicant claims in that regard that, contrary to what is argued by the Council, the rights of the defence are applicable to it; that the contested acts make no provision at any time for the communication to it of the reasons for its being listed and, therefore, do not enable it to exercise its rights of defence and its right to request the removal of its name from the lists, and that it was not at any time personally notified of the reasons for its being listed and was not heard either before or after the adoption of the contested acts. In that regard, the applicant claims that it is a requirement of the right to a fair hearing that it should have been heard before the adoption of the contested acts.

103 The Council, referring to Tay Za v Council, paragraph 77 above, contends that, in a legislative procedure culminating in the adoption of sanctions against a third country which apply to certain categories of its nationals, the rights of the defence are not applicable to them. In this case, the restrictive measures were adopted against Belarus and the applicant was in a situation comparable to that of the applicant in the case which gave rise to the judgment in Tay Za v Council, paragraph 77 above.

104 The Council further contends that it was under no obligation to inform the applicant before the adoption of subsequent measures which maintained its listing, since the applicant was already aware of the ground for its listing.

105 First, it must be recalled that since the judgment of the General Court in Tay Za v Council, paragraph 77 above, was set aside on appeal, in its entirety, by the judgment of the Court of Justice of 13 March 2012 in Case C‑376/10 P Tay Za v Council, what is stated in the former judgment is no longer part of the legal order of the European Union and cannot validly be relied on by the Council (see, to that effect, Case T‑492/10 Melli Bank v Council, paragraph 88 above, paragraph 78, and the judgment of 20 March 2013 in Case T‑495/10 Bank Saderat v Council, not published in the ECR, paragraph 73).

106 It must then be recalled that Article 6(2) and (3) of Decision 2012/642 and Article 8a(2) and (3) of Regulation No 765/2006, in the versions applicable to this case, contain provisions safeguarding the rights of defence of persons and entities subject to restrictive measures adopted under those texts.

107 In any event, according to the case-law, observance of the rights of the defence, especially the right to be heard, in all proceedings initiated against an entity which may lead to a measure adversely affecting that entity, is a fundamental principle of European Union law which must be guaranteed, even when there are no rules governing the procedure in question (Case T-390/08 Bank Melli Iran v Council, paragraph 82 above, paragraph 91).

108 Consequently, it must be held that the rights of the defence are applicable to the applicant and that respect for those rights is subject to review by the Courts of the European Union (see, to that effect, Case T-492/10 Melli Bank v Council, paragraph 88 above, paragraph 79, and Bank Saderat v Council, paragraph 105 above, paragraph 74).

– The complaint that the acts at issue do not provide for the communication of the grounds for the applicant’s listing

110 Article 6(2) and (3) of Decision 2012/642 and Article 8a(2) and (3) of Regulation No 765/2006, in the versions applicable to this case, provide that, first, the Council is to communicate to the person concerned its decision, including the grounds for listing, either directly, if the person’s address is known, or through the publication of a notice, providing him with an opportunity to present observations and, second, where observations are submitted or where substantial new evidence is presented, the Council is to review its decision and inform the person concerned accordingly.

111 It follows that the applicant cannot claim that the acts at issue do not provide at any time for the communication of detailed reasons for its being listed, thus not enabling it to exercise its rights of defence, its right to be heard, or its right to access to a procedure permitting it to seek the removal of its name from the lists.

– The complaint that the applicant was never personally informed of the reasons applied to it and was not heard either before or after the adoption of the contested acts

113 As stated in paragraph 110 above, Article 6(2) of Decision 2012/642 and Article 8a(2) of Regulation No 765/2006, in the versions applicable to this case, provide that the Council is to communicate its decision, including the grounds for listing, to the natural or legal person, entity or body concerned, either directly, if the address is known, or by the publication of a notice, providing the opportunity to present observations.

114 In this case, by letter of 7 November 2012, mentioned in paragraph 30 above, the Council informed the applicant that its name would continue to be listed, by means of Decision 2012/642 and Implementing Regulation No 1017/2012.

115 Further, in accordance with the case-law, respect for the rights of the defence and, in particular, the right to be heard, with regard to restrictive measures, does not require the European Union authorities, prior to the initial inclusion of the name of a person or entity in a list imposing restrictive measures, to disclose the grounds for that listing to the person or entity concerned (see, to that effect, Joined Cases C‑402/05 P and C‑415/05 P Kadi and Al Barakaat International Foundation v Council and Commission [2008] ECR I‑6351, paragraph 338)

116 Such prior disclosure would be liable to jeopardise the effectiveness of the freezing of funds and economic resources imposed by those authorities (see, to that effect, Kadi and Al Barakaat International Foundation v Council and Commission, paragraph 115 above, paragraph 339). In order to attain their objective, such measures must, by their very nature, take advantage of a surprise effect and apply with immediate effect (see, to that effect, Kadi and Al Barakaat International Foundation v Council and Commission, paragraph 115 above, paragraph 340, and Case T‑383/11 Makhlouf v Council [2013] ECR, paragraphs 37 to 40).

117 It must however be stated that, in the context of the adoption of Decision 2012/642 and Implementing Regulation No 1017/2012, which are subsequent acts which maintained the listing of the applicant, the argument as to the surprise effect of those measures can in principle no longer be validly relied upon (see, to that effect, Case C‑27/09 P France v People’s Mojahedin Organization of Iran [2011] ECR I‑13427, paragraph 62, and Makhlouf v Council, paragraph 116 above, paragraph 42).

118 It is however apparent from the case-law that the right to be heard prior to the adoption of acts which maintain the imposition of restrictive measures on persons already subject to such measures presupposes that the Council has adduced new evidence against those persons (see, to that effect, and by analogy, France v People’s Mojahedin Organization of Iran, paragraph 117 above, paragraph 63, and Makhlouf v Council, paragraph 116 above, paragraph 43).

119 In this case, by Decision 2012/642 and Implementing Regulation No 1017/2012, the Council substantially amended the grounds for the continued listing of the applicant, as is apparent from paragraphs 93 and 95 above.

120 Yet it is undisputed that, prior to the adoption of those acts, the Council did not disclose those new grounds to the applicant.

121 Consequently, pursuant to the case-law cited in paragraphs 117 and 118 above, Decision 2012/642 and Implementing Regulation No 1017/2012 must be annulled, in so far as they concern the applicant, by reason of an infringement of the right to be heard, and there is no need to examine the other complaints and pleas in law relied on by the applicant.

122 It follows from all the foregoing that the action must be upheld as regards the contested acts and must be dismissed as being inadmissible as regards Decision 2013/534 and Implementing Regulation No 1054/2013.

123 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been asked for in the successful party’s pleadings.

124 Article 87(3) of those rules provides that where each party succeeds on some and fails on other heads, or where the circumstances are exceptional, the Court may order that the costs be shared or that each party bear its own costs.

125 In the circumstances of this case, where the Council has failed on the heads of claim seeking annulment which were the main subject-matter of the case, it must be ordered to pay all the costs incurred by the applicant, as applied for in that party’s pleadings, and to bear its own costs.

126 In accordance with the first subparagraph of Article 87(4) of the Rules of Procedure, the institutions which have intervened in the proceedings are to bear their own costs. Consequently, the Commission shall bear its own costs.

1. Annuls Council Decision 2011/357/CFSP of 20 June 2011, amending Decision 2010/639/CFSP concerning restrictive measures against certain officials of Belarus, Council Regulation (EU) No 588/2011 of 20 June 2011 amending Regulation (EC) No 765/2006 concerning restrictive measures against President Lukashenko and certain officials of Belarus, Council Decision 2011/666/CFSP of 10 October 2011 amending Decision 2010/639/CFSP concerning restrictive measures against Belarus, Council Implementing Regulation (EU) No 1000/2011 of 10 October 2011 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in respect of Belarus, Council Decision 2012/642/CFSP of 15 October 2012 concerning restrictive measures against Belarus, and Council Implementing Regulation (EU) No 1017/2012 of 6 November 2012 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in respect of Belarus, in so far as those acts concern BelTechExport ZAO;

2. Dismisses the action as being inadmissible in so far as it concerns Council Decision 2013/534/CFSP of 29 October 2013 amending Decision 2012/642 and Council Implementing Regulation (EU) No 1054/2013 of 29 October 2013 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in respect of Belarus;

3. Orders the Council of the European Union to bear its own costs and to pay those incurred by BelTechExport;

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	Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> BelTechExport v Council (Judgment) [2014] EUECJ T-438/11 (09 December 2014) URL: http://www.bailii.org/eu/cases/EUECJ/2014/T43811.html Cite as: ECLI:EU:T:2014:1044, EU:T:2014:1044, [2014] EUECJ T-438/11

Court of Justice of the European Communities (including Court of First Instance Decisions)