BelTechExport v Council (Common foreign and security policy - Restrictive measures against Belarus : Judgment) [2017] EUECJ T-765/15 (27 September 2017)

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(Common foreign and security policy — Restrictive measures against Belarus — Freezing of funds — Suspension of measures — Obligation to state reasons — Rights of defence — Right to be heard — Error of assessment)

BelTechExport ZAO, established in Minsk (Belarus), represented by J. Jerņeva and E. Koškins, lawyers,

Council of the European Union, represented by F. Naert and J.-P. Hix, acting as Agents,

European Commission, represented by E. Paasivirta and L. Havas, acting as Agents,

APPLICATION pursuant to Article 263 TFEU for annulment of Council Decision (CFSP) 2015/1957 of 29 October 2015 amending Decision 2012/642/CFSP concerning restrictive measures against Belarus (OJ 2015 L 284, p. 149), and of Council Regulation (EU) 2015/1948 of 29 October 2015 amending Regulation (EC) No 765/2006 concerning restrictive measures against Belarus (OJ 2015 L 284, p. 62), in so far as they concern the applicant,

composed of H. Kanninen (Rapporteur), President, J. Schwarcz and C. Iliopoulos, Judges,

having regard to the written part of the procedure and further to the hearing on 28 April 2017,

1 The applicant, BelTechExport ZAO, was first included on the list of persons and entities subject to restrictive measures against Belarus (‘the lists’) by:

– 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);

– 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).

3 On 12 August 2011, the applicant brought an action before the General Court, seeking, after amendment of the heads of claim, annulment of all the acts referred to in paragraphs 1 and 2 above, in so far as those acts concerned the applicant.

4 By Decision 2014/750/CFSP of 30 October 2014 amending Decision 2012/642 (OJ 2014 L 311, p. 39) and Implementing Regulation (EU) No 1159/2014 of 30 October 2014, implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in respect of Belarus (OJ 2014 L 311, p. 2) (together, ‘the 2014 acts’), the Council of the European Union extended the restrictive measures as regards the applicant, on the following ground:

‘BelTechExport benefits from the regime as a main exporter of arms and military equipment in Belarus, which requires authorisation from the Belarusian authorities.’

5 By judgment of 9 December 2014, BelTechExport v Council (T‑438/11, not published, EU:T:2014:1044), the General Court annulled all of the measures referred to in paragraphs 1 and 2 above as far as the applicant was concerned, except for Decision 2013/534 and Implementing Regulation No 1054/2013 with regard to which the General Court dismissed the applicant’s action as being inadmissible.

6 By judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), the General Court annulled all of the measures referred to in paragraphs 1 and 2 above with respect to Mr Peftiev, except for Decision 2013/534 and Implementing Regulation No 1054/2013 with regard to which the General Court dismissed the applicant’s action as being inadmissible. Mr Peftiev was covered by the acts cited in paragraph 1 above, as well as by Decision 2011/666 and Implementing Regulation No 1000/2011, on the ground, inter alia, that he was ‘Chairman of the Council of Shareholders of BelTechExport, the largest export/import company of defence-related products in Belarus’.

7 By letter of 23 March 2015, the applicant, in view of the judgment of 9 December 2014, BelTechExport v Council (T‑438/11, not published, EU:T:2014:1044), requested the Council to terminate the restrictive measures imposed by Decision 2014/750 and Implementing Regulation No 1159/2014.

8 On 8 June 2015, the Council replied to the applicant that its continued listing was justified, given that it benefited from the regime of President Lukashenko as a major company in the Belarusian sector of arms manufacture and arms exports and that the regime had continuously extended significant support to BelTechExport, inter alia by taking over its risks through a state-owned reinsurance company, facilitating transactions which benefited BelTechExport through the Belarusian Ministry of Defence and licensing the import and export of arms, including state-owned arms, by BelTechExport.

9 By letter of 22 September 2015 to the Council, the applicant reiterated its request for termination of the restrictive measures imposed by Decision 2014/750 and Implementing Regulation No 1159/2014. By letter of the same date, the Council replied that the applicant’s letter was under examination.

10 By Decision (CFSP) 2015/1957 of 29 October 2015, amending Decision 2012/642 (OJ 2015 L 284, p. 149), the Council, first, extended the restrictive measures imposed on the applicant by continuing to list its name in Annex I to Decision 2012/642, as amended by Decision 2015/1957, on the same ground as that referred to in paragraph 4 above, and, secondly, suspended until 29 February 2016 the application of restrictive measures as regards the applicant, whose name appears in Annex II to Decision 2012/642, as amended by Decision 2015/1957.

11 By its Regulation (EU) 2015/1948 of 29 October 2015 amending Regulation (EC) No 765/2006 concerning restrictive measures in respect of Belarus (OJ 2015 L 284, p. 62), the Council suspended until 29 February 2016 the application of restrictive measures as regards the applicant, whose name appears in Annex IV to Regulation (EC) No 765/2006 of 18 May 2006 concerning restrictive measures against President Lukashenko and certain officials of Belarus (OJ 2006 L 134, p. 1).

12 By its Implementing Regulation (EU) 2015/1949 of 29 October 2015, implementing Article 8a(1) of Regulation No 765/2006 (OJ 2015 L 284, p. 71), the Council amended certain information set out in Annex I to Regulation No 765/2006, which does not concern the applicant.

13 By letter of 30 October 2015, the Council informed the applicant of its decision to continue listing its name, on the grounds indicated in the Annex to Decision 2012/642, as amended by Decision 2015/1957, and in Annex I to Regulation No 765/2006, as amended by Implementing Regulation No 2015/1949. The Council stated, however, that as the applicant’s name was included in Annex II to Decision 2012/642, as amended by Decision 2015/1957, and in Annex IV to Regulation No 765/2006, as amended by Regulation No 2015/1948, the application of the restrictive measures imposed by those acts was suspended in respect of the applicant.

14 As from 1 March 2016, the restrictive measures ceased to apply to the applicant.

15 By application lodged at the Registry of the Court on 30 December 2015, the applicant brought this action for the annulment of Decision 2015/1957 and Regulation 2015/1948, in so far as those acts concern it.

16 By document lodged at the Registry of the Court on 12 April 2016, the European Commission sought leave to intervene in the present case in support of the form of order sought by the Council.

17 By decision of 9 June 2016, the President of the First Chamber of the Court granted the Commission leave to intervene.

18 On 27 July 2016, the Commission lodged its defence. The applicant submitted its observations on that statement within the prescribed time limit.

19 Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Fourth Chamber, to which the present case was accordingly allocated.

20 The parties presented oral argument and answered questions put to them by the Court at the hearing on 28 April 2017.

– annul Decision 2015/1957 and Regulation 2015/1948 in so far as its name continues to be included on the lists, even if the application of the restrictive measures with respect to the applicant has been temporarily suspended;

– dismiss the action as inadmissible in so far as it is directed against Regulation 2015/1948;

– failing that, hold that there is no longer any need to adjudicate the case and, in any event, dismiss the action in its entirety;

24 In its defence, the Council invokes the applicant’s lack of interest in pursuing the action. It contends that, in so far as Decision 2015/1957 and Regulation 2015/1948 provide for the suspension of the application of the measures taken against the applicant, they cannot be regarded as causing it material damage. Thus, according to the Council, the annulment of those acts could not restore the reputation of the applicant or constitute any other form of reparation. In those circumstances, as the applicant no longer has any interest in pursuing the action, there is no longer any need to adjudicate the case.

25 The Commission argues, for the same reasons as those set out by the Council, that the applicant has no interest in bringing an action. It also contends that the pleas relied on by the applicant are inadmissible in so far as they seek the annulment of Regulation 2015/1948, to the extent that that regulation does not impose or extend the restrictive measures in respect of the applicant, but only suspends them.

26 The applicant states that, according to the case-law of the Court, it may retain an interest in seeking the annulment of a decision either in order to be restored to its original position or in order to induce the author of the contested act to make suitable amendments in the future, and thereby avoid the risk that the unlawfulness alleged in respect of that act will be repeated. The applicant claims that the Council had consistently maintained the name of the applicant on the lists, notwithstanding the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041). The applicant also claims that there was nothing, on the basis of the same or a similar reasoning, to prevent it from being entered on any further sanctions lists. Furthermore, it does not follow from the case-law that it must suffer material damage in order to preserve its interest in bringing proceedings. The restrictive measures against it, it claims, have negative consequences for its rights and freedoms. Accordingly, the unlawful inclusion of its name on the lists can only be rectified by seeking annulment of Decision 2015/1957 and Regulation 2015/1948,even if those acts suspend the application of the restrictive measures to which it is subject. In that regard, the applicant claims that the Council, by that decision and by that regulation, continued to list its name even though the application of the restrictive measures in respect of it had been temporarily suspended.

27 It must be borne in mind that the applicant’s interest in bringing proceedings must, in the light of the purpose of the action, exist at the stage of lodging the action, failing which the action will be inadmissible. That purpose must, like the interest in bringing proceedings, continue until the final decision, failing which there will be no need to adjudicate, which presupposes that the action must be liable, if successful, to procure an advantage for the party bringing it (see, to that effect, judgments of 17 April 2008, Flaherty and Others v Commission, C‑373/06 P, C‑379/06 P and C‑382/06 P, EU:C:2008:230, paragraph 25, and of 28 May 2013, Abdulrahim v Council and Commission, C‑239/12 P, EU:C:2013:331, paragraph 61).

28 It should also be noted that an applicant’s interest in bringing proceedings does not necessarily disappear because the act challenged by him has ceased to have effect in the course of proceedings (judgment of 28 May 2013, Abdulrahim v Council and Commission, C‑239/12 P, EU:C:2013:331, paragraph 62).

29 The Court has already held that restrictive measures which were adopted because of a person’s alleged links with terrorist organisations had substantial negative consequences and had a considerable impact on the rights and freedoms of that person. Apart from the freezing of funds as such which, through its broad scope, seriously disrupted both the working and the family life of the persons concerned and impeded the conclusion of numerous legal acts, the Court emphasised that account must be taken of the opprobrium and suspicion that accompany the public designation of those persons. The Court thus held that the interest of such an applicant in bringing proceedings was retained, despite the removal of his name from the list at issue, for the purpose of having the Courts of the European Union recognise that he should never have been included on the list or that he should not have been included under the procedure which was adopted by the EU institutions. The Court of Justice further stated that whilst recognition of the illegality of a contested act could not, as such, compensate for material harm or for interference with one’s private life, it was nevertheless capable of restoring the reputation of the person concerned or constituting a form of reparation for the non-material harm which he had suffered by reason of that illegality, and of thereby establishing that he retains his interest in bringing proceedings (see, to that effect, judgment of 28 May 2013, Abdulrahim v Council and Commission, C‑239/12 P, EU:C:2013:331, paragraphs 70 to 72).

30 The General Court also held, in the judgment of 22 April 2015, Tomana and Others v Council and Commission (T‑190/12, EU:T:2015:222, paragraph 67), that where restrictive measures were imposed on persons not because of their links with terrorist organisations, but because, as in the present case, they were members of a government which committed serious infringements of human rights, were associated with those government members, or were persons whose activities seriously undermined democracy, respect for human rights and the rule of law, the reasoning of the Court of Justice in the judgment of 28 May 2013, Abdulrahim v Council and Commission (C‑239/12 P, EU:C:2013:331), was also applicable, mutatis mutandis, to their situation, and accordingly it had to be concluded that their interest in bringing proceedings continued to exist notwithstanding the repeal, with respect to some of them, and the suspension, with respect to others, of the restrictive measures at issue.

31 In the present case, while Decision 2015/1957 provides both for the continued listing of the applicant’s name and the temporary suspension of the application of the restrictive measures in respect of the applicant, Regulation 2015/1948 merely temporarily suspends that application, as the Commission observes (see paragraph 25 above). It is therefore necessary to examine separately the applicant’s interest in seeking annulment of Decision 2015/1957 and the annulment of Regulation 2015/1948.

32 It must be borne in mind that restrictive measures were imposed on the applicant on the ground that it benefited from the regime of President Lukashenko, which is presented by Decision 2012/642 as being the cause of the infringement of human rights, democracy and the rule of law in Belarus. It follows that, for the reasons set out in paragraphs 29 and 30 above, applicable mutatis mutandis to the present case, the applicant’s interest in seeking annulment of Decision 2015/1957 persists, despite the suspension, in respect of it, of the application of the restrictive measures at issue. In addition to the freezing of funds which may disrupt the applicant’s professional activity, the inclusion of its name on the lists is such as to give rise to opprobrium and suspicion in relation to it and, consequently, to affect its reputation.

33 The plea of inadmissibility raised by the Council, in so far as the action is directed against Decision 2015/1957, must therefore be rejected.

34 In contrast to Decision 2015/1957, Regulation 2015/1948 does not provide for the continued listing of the applicant’s name. This regulation merely temporarily suspends the restrictive measures adopted in respect of it. By Implementing Regulation 2015/1949, adopted on the same day as Regulation 2015/1948, cited in paragraph 12 above, the Council, first, withdrew certain names from the lists and, secondly, updated the information concerning certain persons and entities included in those lists, implicitly maintaining the applicant’s name in them. This is apparent from the Council’s letter of 30 October 2015, referred to in paragraph 13 above.

35 In the present case, the applicant does not seek annulment of Implementing Regulation 2015/1949, as it confirmed at the hearing, but only that of Regulation 2015/1948. The applicant’s action, therefore, is not capable of procuring any advantage for it whatsoever. On the contrary, if Regulation 2015/1948 were to be annulled, the restrictive measures suspended by that regulation would have to be applied to it retroactively.

36 In those circumstances, it must be held that the applicant has no interest in seeking annulment of Regulation 2015/1948. Accordingly, it is appropriate to accept the plea of inadmissibility raised by the Council in so far as it relates to that regulation.

37 The action is therefore inadmissible in so far as it is directed against Regulation 2015/1948 and shall be examined, on its merits, only to the extent that it seeks annulment of Decision 2015/1957.

38 The applicant relies on four pleas in law alleging, in essence (i) a lack of adequate reasoning for the contested decision, (ii) infringement of the rights of the defence, the right to a fair hearing and the right to an effective judicial remedy, (iii) ‘manifest errors of assessment’ and (iv) infringement of the right to property.

39 The applicant argues in essence that, by the judgments of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), and of 9 December 2014, BelTechExport v Council (T‑438/11, not published, EU:T:2014:1044), the General Court considered that the reasoning for the inclusion of its name on the lists, by Decision 2012/642 and Implementing Regulation No 1017/2012 (‘the 2012 measures’) was not sufficient and annulled those acts. According to the applicant, the reasoning for continuing, by the contested decision, to list its name had not changed, but had been simply put in ‘slightly different words’. As a result of the annulment by the General Court of the 2012 measures, the Council was under an obligation to provide materially different explanations to those examined by the General Court in the two abovementioned judgments.

40 In the reply the applicant indicates that it does not dispute the level of detail or the wording of the reasoning but the overall adequacy of the reasoning in view of the criteria laid down in the case-law.

42 According to well-established case-law, the purpose of the obligation to state the reasons on which an act adversely affecting an individual is based, as provided for in the second paragraph of Article 296 TFEU and in Article 41(2)(c) of the Charter of Fundamental Rights of the European Union, is, first, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the EU judicature and, secondly, to enable that judicature to review the legality of that act (judgment of 9 December 2014, BelTechExport v Council, T‑438/11, not published, EU:T:2014:1044, paragraph 79; see also, to that effect, judgments of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 49, and of 7 December 2010, Fahas v Council, T‑49/07, EU:T:2010:499, paragraph 51).

43 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 act 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 reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient 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, judgments of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 53, and of 9 December 2014, BelTechExport v Council, T‑438/11, not published, EU:T:2014:1044, paragraph 83).

44 In particular, the reasons given for an act adversely affecting a person are sufficient if that act was adopted in a context which was known to that person and which enables him to understand the scope of the measure concerning him (judgments of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 54, and of 9 December 2014, BelTechExport v Council, T‑438/11, not published, EU:T:2014:1044, paragraph 84).

45 In the present case, first of all, it must be borne in mind that, by the contested decision, the Council continued to list the applicant’s name in Annex I to that decision and therefore extended the restrictive measures against it, on the ground that it ‘benefit[ed] from the regime as a main exporter of arms and military equipment in Belarus, which require[ed] authorisation from the Belarusian authorities’.

46 Thus, the contested decision only reiterated, with regard to the applicant, the restrictive measures previously imposed, on the same ground as that provided for in Decision 2014/750 (see paragraph 4 above), which was not contested by the applicant before the General Court. It necessarily follows that, on the date when the contested decision was adopted, the applicant was aware of the reason for continuing to list its name and the context in which that decision was adopted.

47 Next, it should be noted that the reason given in the contested decision against the applicant, identical to that in the 2014 acts, had already been explained by the Council, by letter of 9 October 2014, which the applicant itself annexed to the application, before being the subject of further detailed explanation by the Council by letter dated 8 June 2015 (see paragraph 8 above).

48 It must also be held that the applicant was in a position effectively to challenge the merits of continuing, by the contested decision, to list its name, which is demonstrated by its arguments in support of the plea alleging ‘manifest errors of assessment’ in which the applicant challenges the merits of the reasons relied on by the Council, including the detailed explanation given by the Council in its letter of 8 June 2015.

49 It follows that the applicant cannot claim that it was not in a position to understand the reasons which led the Council to continue, by the contested decision, to list its name.

50 That conclusion cannot be invalidated by the applicant’s argument based on the judgment of 9 December 2014, BelTechExport v Council (T‑438/11, not published, EU:T:2014:1044), by which the General Court, it is claimed, annulled the 2012 measures, and the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), by which the General Court, it is claimed, ‘unequivocally refuted’ reasoning substantially similar to that justifying the continued listing of its name by the contested decision. 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. Contrary to what the applicant submits, the reasons given for the 2012 measures, on the basis of which the applicant’s name was kept on the lists, in the case giving rise to the abovementioned judgment, are different from those which led to the applicant’s name being kept on the lists by that decision, and therefore the solution in the judgment of 9 December 2014, Peftiev v Counsel (T‑441/11, not published, EU:T:2014:1041), cannot be transposed to this case. In any event, it must be held, first, that in the judgment of 9 December 2014, BelTechExport v Council (T‑438/11, not published, EU:T:2014:1044), the General Court found that the statement of reasons for the 2012 measures was sufficient in so far as the applicant was concerned and that, secondly, in the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), the General Court did not examine whether the statement of reasons for the 2012 measures was sufficient or whether it was well founded.

51 Finally, it should be recalled that the question of the statement of reasons, which concerns an essential procedural requirement, is separate from that of the evidence of the alleged conduct, which concerns the substantive legality of the act in question and involves assessing the truth of the facts set out in that act and the characterisation of those facts as evidence justifying the use of restrictive measures against the person concerned (judgments of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 60, and of 9 December 2014, Peftiev v Council, T‑441/11, not published, EU:T:2014:1041, paragraph 146; see also, to that effect, judgment of 16 November 2011, Bank Melli Iran v Council, C‑548/09 P, EU:C:2011:735, paragraph 88). Accordingly, the applicant’s arguments seeking to contest the merits of the grounds on which its name was maintained on the lists by the contested decision shall be examined in the context of the plea alleging ‘manifest errors of assessment’.

52 It follows from the foregoing considerations that the first plea in law must be dismissed.

Second plea in law, concerning infringement of the rights of defence, the right to a fair hearing and the right to an effective judicial remedy

53 The applicant claims, in essence, that the contested decision infringes its rights of defence, its right to a fair hearing and its right to an effective judicial remedy, within the meaning of Article 47 of the Charter of Fundamental Rights and Articles 6 and 13 of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950.

54 The applicant claims that the reasons for continuing, by the contested decision, to list its name were at no time communicated to it. The applicant recognises that that decision merely extends the application of the restrictive measures already imposed on it. However, in the applicant’s view, the Council did not explain to it the reasons for maintaining its name on the lists after the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), even though, by virtue that judgment, the reason for continuing, by that decision, to list its name had been invalidated.

55 Thus, according to the applicant, the explanation given for maintaining its name on the lists, in the Council’s letter of 9 October 2014, was no longer valid after 9 December 2014, the date of the judgment in Peftiev v Council (T‑441/11, not published, EU:T:2014:1041). Similarly, it claims that the Council’s letter of 8 June 2015 contains the same general and unjustified grounds for that continued listing as those relied on before the adoption of the abovementioned judgment in which, it is claimed, the General Court rejected almost identical reasoning. Moreover, in that letter, the Council provided ambiguous examples of how the applicant had benefited from the regime of President Lukashenko.

56 It follows, according to the applicant, that, on 8 June 2015, it was not able bring an action against the restrictive measures imposed on it because the reasoning for continuing to list its name had already been rejected by the General Court in the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), a new decision in respect of the applicant had not yet been adopted and the time limit for bringing an action had expired. Furthermore, the applicant claims that it was not in a position to rebut the reasoning for maintaining its name on the lists, as set out in the Council’s letter of 8 June 2015, as it was short, general and unsubstantiated with evidence.

57 Finally, the applicant points out that, on 22 September 2015, shortly prior to the adoption of the contested decision, it sent a letter to the Council requesting that it review its situation, to which the Council did not reply, so that it could not ascertain the reasons for maintaining its name on the lists.

59 First, it should be recalled that respect for the rights of the defence, which is affirmed in Article 41(2)(a) of the Charter of Fundamental Rights, to which the EU Treaty attaches the same legal value as the treaties, includes the right to be heard, whereas the right to effective judicial protection, which is affirmed in Article 47 of the Charter, requires that the person concerned must be able to ascertain the reasons upon which the decision taken in relation to him is based (see, to that effect, judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraphs 98 to 100).

60 It follows that, in the context of the adoption of a decision maintaining a person, entity or body on a list of persons, entities or bodies subject to restrictive measures, the Council must respect the right of that person, entity or body to a prior hearing where new evidence, namely evidence which was not included in the initial listing decision, is admitted against him or it, in the decision maintaining his or its listing (judgment of 4 June 2014, Sina Bank v Council, T‑67/12, not published, EU:T:2014:348, paragraph 68; see also, to that effect, judgments of 21 December 2011, France v People’s Mojahedin Organization of Iran, C‑27/09 P, EU:C:2011:853, paragraph 62, and of 9 December 2014, BelTechExport v Council, T‑438/11, not published, EU:T:2014:1044, paragraph 118).

61 In the present case, it must be borne in mind that the reason for maintaining the applicant’s name on the lists by the contested decision is identical to that on the basis of which the 2014 acts were adopted. Before the adoption of those acts, the Council had, by letter dated 9 October 2014, replied to the applicant’s request of 28 August 2014 to review the lists, indicating the new reason on the basis of which it intended to maintain its name on those lists. Furthermore, following the adoption of those acts, the Council, by letters dated 31 October 2014, gave notice of those measures to the applicant and its lawyer, expressly stating that the reasons for maintaining its name on the lists were set out in the annexes to those acts.

62 In accordance with the case-law referred to in paragraph 60 above, in so far as the contested decision extended the restrictive measures in respect of the applicant for the same reasons as those on the basis of which the 2014 acts were adopted, the Council was not obliged to hear the applicant before adopting that decision.

63 Moreover, it must be pointed out that, before adopting the contested decision, the Council, by letter of 8 June 2015, in reply to the applicant’s letter of 23 March 2015, referred to in paragraph 7 above, informed the applicant of its intention to maintain the restrictive measures against it, explaining in detail why it intended to keep its name on the lists.

64 Finally, it should be pointed out that, by letter dated 30 October 2015, the Council notified the applicant of the contested decision, expressly stating that the reasons for maintaining its name on the lists were set out in Annex I to Decision 2012/642, as amended by the contested decision.

65 In those circumstances, it must be held that the applicant had the information necessary to exercise its right to an effective judicial remedy and its rights of defence.

66 That conclusion cannot be called into question by the applicant’s argument that, on 8 June 2015, it was not in a position to bring an action against the restrictive measures to which it was subject, since the letter of that date contained the same general and unjustified reasons for maintaining its name on the lists as those contained in the reasoning censured by the General Court in the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041). First, it suffices to note that the applicant in the case which gave rise to the abovementioned judgment was not the applicant in the present case. Secondly, it must be borne in mind that the reasons for maintaining the applicant’s name on the lists, in the case giving rise to the abovementioned judgment, were not the same as those on the basis of which the applicant’s name was, by the contested decision, maintained on the lists in the present case. Moreover, it must be held that, in the case which gave rise to the abovementioned judgment, the General Court merely pointed out that the fact that trade in defence-related products was regulated did not demonstrate, as such, that BelTechExport ‘supported ... financially’ the regime of President Lukashenko (judgment of 9 December 2014, Peftiev v Council, T‑441/11, not published, EU:T:2014:1041, paragraph 195). In the present case, as the Council stated at the hearing, the applicant’s name was kept on the lists by the contested decision on the ground that it benefited from that regime.

67 Finally, assuming that the applicant, by its arguments, intends to assert that, because of the lack of adequate reasoning in the contested decision, its rights of defence, its right to a fair trial and its right to an effective judicial remedy were infringed, it is sufficient to point out that it is clear from paragraphs 45 to 52 above that that decision is adequately reasoned.

68 In the light of all of the foregoing considerations, the second plea in law must be rejected.

69 The applicant claims, in essence, that the Council committed a ‘manifest error of assessment’ by considering, first, that it benefited from the regime of President Lukashenko, as a major company in the Belarusian sector of arms manufacture and arms export and, secondly, that each of the acts alleged against the applicant was linked to or associated with, inter alia, breaches of international electoral standards in Belarus or repressive measures against civil society and the democratic opposition.

70 The applicant also alleges that the assertion that it benefits from the regime of President Lukashenko by using reinsurance services offered by a state-owned Belarusian company is manifestly erroneous. First, it is apparent from the sources of information relied on by the Council that the company in question provided the applicant with reinsurance, but not reinsurance services, that that company did not have a direct contract with the applicant and that it did not make payments to it or to its insurer. Moreover, there is no evidence to suggest that the applicant was aware or ought to have been aware of the reinsurer.

71 Secondly, the Council’s sources of information only relate to the year 2008 which, according to the applicant, had been used by the Council for the initial inclusion of its name on the lists, which was annulled by the General Court, so that the Council should have based its reasoning on evidence dated after that annulment.

72 Furthermore, reinsurance services had been provided to many companies, registered in Belarus and elsewhere. However, the names of those companies were not entered on the lists by the contested decision.

73 Finally, no fewer than 4 418 reinsurance agreements were concluded between the reinsurance company concerned and its domestic and foreign clients during the year 2008. However, it is claimed, the applicant’s name is the only one included on the lists. In that regard, the applicant claims that the insurance sector is regulated in Belarus and that, by analogy with the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), the Council cannot conclude without proof that the applicant obtained unusual benefits from the company in question that it would otherwise not have obtained on the basis of its ordinary commercial activities.

74 The applicant adds that the Council does not provide evidence of the alleged benefit which it derived from the transactions allegedly facilitated by the Belarusian Ministry of Defence. First, the Council’s evidence relates to cooperation projects dating back to the year 2005 and, secondly, the information provided by the Council is ambiguous, short and does not disclose any specific facts that would indicate that the Belarusian Ministry of Defence provided any particular advantage to the applicant. In that regard, the applicant cites the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), from which it is apparent that trade in defence-related products is a regulated sector, which inherently involves legal relations between the applicant and the State authorities and that it cannot be inferred that the applicant supported the regime of President Lukashenko financially or that it enjoyed any unusual support from the Belarusian Ministry of Defence. The applicant also claims that its name is the only one which continues to be listed, while more than 450 companies participate in the cooperation project.

75 With regard to the alleged benefit derived from the licence to import and export arms and to sell state-owned arms, the applicant recalls, first, that it commenced its activities in the arms sector and that it was licensed to carry out cross-border trade in defence-related products before the law creating the position of ‘President of the State’ and the inauguration of Mr Lukashenko as President of the Republic of Belarus. Secondly, that licence does not give rise to any special ‘association’ of the applicant with the ruling personalities, nor does it constitute a privilege provided by the regime of President Lukashenko. The applicant adds that the Belarusian market includes two other cross-border traders, 100% state-owned, possessing identical trade licences issued after the election of Mr Lukashenko to the presidency of the state and exporting considerable quantities of defence-related products to many countries, as well as 90 Belarusian companies, possessing a licence for international activities with regard to military-related products.

76 Finally, the applicant claims that its activities are 90% export-oriented and that it imports only spare parts and components which are required for the production of products for export. It concludes that it cannot be considered as an importer of defence products or as ‘arming the regime’. Furthermore, it states that it has only complied with Belarusian law as regards the licensing of particular business activities.

78 The effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights requires, in particular, that, as part of the review of the lawfulness of the grounds which are the basis of the decision to include or to maintain the name of a given person or entity on the lists of persons subject to sanctions, the Courts of the European Union are to ensure that that decision, which affects that person or entity individually, is taken on a sufficiently solid factual basis. That entails a verification of the facts alleged in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, is substantiated (see, to that effect, judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 119).

79 It is the task of the competent European Union authority to establish, in the event of challenge, that the reasons relied on against the person or entity concerned are well founded, and not the task of that person or entity to adduce evidence of the negative, that those reasons are not well founded. It is necessary that the information or evidence produced should support the reasons relied on against the person or entity concerned. If that material is insufficient to allow a finding that a reason is well founded, the Courts of the European Union are to disregard that reason as a possible basis for the contested decision to list or maintain a listing (judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraphs 121 to 123).

80 In the present case, the contested decision maintains the applicant’s name on the lists on the ground that it ‘benefits from the regime as a main exporter of arms and military equipment in Belarus, which requires authorisation from the Belarusian authorities’.

81 Moreover, it should be recalled that, in its letter of 8 June 2015, the Council explained the factors which led it to consider that the applicant was benefiting from the regime of President Lukashenko. First, it is contended, that regime supports the applicant’s risks through the reinsurance company concerned. Secondly, that regime, through the Belarusian Ministry of Defence, facilitates the applicant’s commercial transactions. Third, the applicant is licensed to import and export weapons, including complex weapons, and to sell state-owned arms.

82 It is clear from the combined reading of the contested decision and the letter of 8 June 2015 that the applicant’s name was kept on the lists on the grounds that the latter benefited from the regime of President Lukashenko, in the light of the three factual circumstances referred to in that letter.

83 It is therefore necessary to examine whether the three factual circumstances mentioned in the letter of 8 June 2015 were proven to the requisite legal standard and, for those which have been, whether, jointly or separately, they lead to the conclusion that the applicant ‘benefit[ed] from the regime as a main exporter of arms and military equipment in Belarus, which require[ed] authorisation from the Belarusian authorities’, as indicated in the contested decision.

84 It is apparent from the letter of 8 June 2015 that the Council considered that the reinsurance company concerned, of which the Council of Ministers of the Republic of Belarus is the founder, and whose activity is coordinated by an advisory board set up by the Belarusian Government and chaired by the Deputy Minister for Finance, had provided reinsurance coverage to the applicant.

85 The applicant does not deny that the reinsurance company concerned is owned by the Belarusian State or that it has provided the applicant with reinsurance cover. On the contrary, in the application itself, it is apparent from the documents provided by the Council that, in 2008, that company provided reinsurance cover under insurance contracts in which it is a contracting party.

86 The applicant merely points out that it did not directly enter into a reinsurance contract with the reinsurance company concerned, which was solely in contact with its insurers, that it was not aware of that company and that it did not receive payments directly from that company. As the Council contends, those circumstances are not such as to call into question the fact that it benefited, even indirectly, from reinsurance cover provided by the company in question.

87 However, as the applicant indicates, the evidence of the company’s coverage of its risks relates only to the year 2008. In the reply, the applicant submits that the Council ‘itself is persuaded that [the] reinsurance contract (that [was] only for the year 2008) still provides benefits to the applicant’.

88 It must be held that, in its pleadings, the Council does not reply to that argument of the applicant. There is no evidence in the file that, at the time of adoption of the contested decision, the reinsurance contract still benefited the applicant, which the Council did not contest in reply to a question put by the Court at the hearing.

89 In those circumstances, it must be held that the Council failed to establish, to the requisite legal standard, the applicant’s risk cover by the reinsurance company concerned, which it relied on in its letter of 8 June 2015.

– The facilitation by the regime of President Lukashenko, through the Belarusian Ministry of Defence, of transactions which benefit the applicant

90 It is apparent from the letter of 8 June 2015 that the Council considered that the Belarusian Government had, through the Belarusian Ministry of Defence, facilitated cooperation between the Russian and Belarusian companies, including the applicant, in the areas of repair, modernisation and creation of automatic control systems, aviation and defence equipment.

91 It should first be noted that the applicant does not dispute that the Belarusian Ministry of Defence facilitated cooperation between it and the Russian companies. The applicant merely asserts, on the basis of the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), that, taking into account the regulated nature of the relevant sector of activity, the Council should have submitted evidence that the Belarusian Ministry of Defence had provided it with a ‘particular advantage’, which it did not do.

92 In that regard, it should be noted that, in the judgment of 9 December 2014, Peftiev v Council (T‑441/11, not published, EU:T:2014:1041), the General Court held that the fact that the trade in defence products is a regulated sector, in which it is inherent that there are relations between the applicant and the State authorities, cannot demonstrate, as such, that it supported the regime of President Lukashenko financially. ‘Support’ for that regime is a criterion for inclusion on the lists that is separate from the criterion of ‘benefit’ from that regime, as is apparent both from Article 2(1)(b) of Council Decision 2010/639/CFSP of 25 October 2010, concerning restrictive measures against certain officials of Belarus (OJ 2010 L 280, p. 18), as amended by Council Decision 2011/69/CFSP of 31 January 2011 (OJ 2011 L 28, p. 40), applicable in the case which gave rise to the judgment referred to above, and from Article 4(1)(b) of Decision 2012/642, applicable in the present case. The applicant cannot, therefore, rely on the abovementioned judgment in order to claim, in the present case, that it does not benefit from the regime in question.

93 It should also be noted that, contrary to the applicant’s claims, the Council did not merely infer from the fact that the applicant operated in a regulated sector the conclusion that it benefited from the regime of President Lukashenko. Moreover, the regulated nature of the sector in which the applicant operates, taken in isolation, cannot suffice to establish that it benefits from that regime (see, by analogy, judgment of 12 May 2015, Ternavsky v Council, T‑163/12, not published, EU:T:2015:271, paragraphs 120 and 121). As the Council pointed out in response to a question from the Court at the hearing, it must be held, in the present case, that, in a country such as Belarus, activities of the magnitude of those of the applicant, which is presented by the contested decision as ‘a main exporter of arms and military equipment in Belarus’, and sustained over time, as is the case for the applicant, are not possible without the endorsement of that regime.

94 In those circumstances, it must be held that the Council has established, to the requisite legal standard, facilitation by the regime of President Lukashenko, through the Belarusian Ministry of Defence, of transactions which benefit the applicant.

95 That conclusion is not called into question by the applicant’s argument that the evidence provided by the Council relates to cooperation which goes back to 2005. The Council has produced several documents showing the existence of longer-term cooperation. First, a copy of the website of a Russian industrial investment group in the sectors of engineering and advanced technology, dated 5 September 2005, shows, it is contended, that the Republic of Belarus and the Russian Federation established joint ventures for the repair, modernisation and construction of automatic control systems, aviation equipment and air defence equipment. Next, it is apparent from a copy of the website of the Russian agency responsible for exports of defence-related products, dated 8 July 2014, that that agency intended to examine with its Belarusian partners future projects on behalf of third countries and, in particular, that discussions were foreseen with representatives of the Belarusian Military-Industrial Committee, special exporters such as the applicant and other companies, concerning current projects as well as on promising areas of cooperation in foreign markets. However, neither in its pleadings nor at the hearing was the applicant able to establish that this evidence submitted by the Council, which shows that cooperation still existed at the date of adoption of the contested decision, was incorrect.

96 Finally, the fact that the names of other Belarusian companies participating in cooperation projects with Russian companies were not included on the lists cannot cast doubt on the facilitation by the regime of President Lukashenko, through the Belarusian Ministry of Defence, of transactions for the benefit of the applicant, since the principle of equal treatment must be reconciled with the principle of legality, according to which no one may rely, to his own benefit, on an unlawful act committed in favour of another (see judgment of 14 October 2009, Bank Melli Iran v Council, T‑390/08, EU:T:2009:401, paragraph 59 and the case-law cited).

– The licences granted to the applicant to import and export weapons, including complex weapons, and to sell state-owned arms

97 It is apparent from the letter of 8 June 2015 that the Council considered that the applicant was licensed to import and export weapons, including complex weapons, and to sell arms owned by the Belarusian State.

98 It is clear that the applicant does not dispute the existence of the licences in question. It merely notes that it obtained those licences before Mr Lukashenko was inaugurated as President of the Republic of Belarus, that it has no special association with the ruling personalities, that other companies also obtained such licences, that its activities consisted mainly of exports and that it merely complied with Belarusian law which makes the exercise of particular business activities subject to licensing. However, those circumstances are not such as to call into question the existence of licences in favour of the applicant.

99 First, as the Council states, even if the applicant had obtained the licences before Mr Lukashenko came to power, it should be noted that those licences continued for more than 20 years after Mr Lukashenko took up office and served as President of the Republic of Belarus, which the applicant does not dispute in the reply. Secondly, even assuming that, as the applicant observes, 90% of its activities were in exports, that does not in any way contradict the continued listing of its name on the ground that it ‘benefits from the regime as a main exporter of arms and military equipment in Belarus’. Thirdly, for the same reasons as those given in paragraph 96 above, the fact that the names of other companies which had obtained the same licences as the applicant do not appear on the lists cannot call into question the licences granted to the applicant to import and export arms, including complex weapons, and to sell arms belonging to the Belarusian State.

100 However, in view of the regulated nature of the sector in which the applicant operated, it must be noted that licences were required for it to carry out its activities. As such, the fact that the applicant was licensed to import and export weapons, including complex weapons, and to sell arms belonging to the Belarusian State does not establish that it benefited from the regime of President Lukashenko. That ground must be considered in the light of the applicant’s specific characteristics, which is presented by the contested decision as one of the principal exporters of arms and military equipment, and of its activities, the magnitude and continuity of which would not have been possible in a country such as Belarus without the endorsement of the regime of President Lukashenko (see paragraph 93 above).

101 In the light of the considerations set out in paragraphs 90 to 100 above, it must be concluded that, by the contested decision, the Council maintained the applicant’s name on the lists without making an error of assessment.

103 The applicant claims that the contested decision, which was adopted without compelling evidence and in breach of its rights of defence infringe its right to property provided for under Article 17 of the Charter of Fundamental Rights and Article 1 of Protocol No 1 of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950.

104 The freezing of funds constitutes a restriction on the right to property which must be justified and which, it is claimed, has not been justified in the present case. Even assuming that that restriction may be justified, the applicant claims that that restriction can only be applied if the applicant is given a guarantee that it can present its case to the competent authorities, which is also not the case in this instance.

105 The Council contends, in essence, that the applicant’s right to property was in no way limited by the contested decision, as the restrictive measures were suspended in respect of the applicant.

106 It should be noted that the applicant establishes a connection between the present plea and the pleas alleging ‘manifest error of assessment’ and infringement of its rights of defence. As is apparent from paragraphs 61 to 68 and from paragraphs 80 to 102 above, however, those pleas must be rejected as unfounded.

107 In any event, it must be recalled that, although the Council, by the contested decision, extended the inclusion of the applicant’s name on the lists, it also decided to suspend application of the restrictive measures against it. Accordingly, as the Council points out, the applicant’s allegation that the restrictive measures prevented it from using European Union financial instruments or making payments via euro accounts is incorrect, which, moreover, the applicant did not deny either in the reply or at the hearing.

108 Consequently, the applicant cannot validly claim that its right to property was infringed.

109 It follows that the fourth plea must be rejected and, consequently, the action must be dismissed in its entirety.

110 Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the Council.

111 In accordance with Article 138(1) of the Rules of Procedure, the institutions which have intervened in the proceedings are to bear their own costs. The Commission must therefore bear its own costs.

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

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> BelTechExport v Council (Common foreign and security policy - Restrictive measures against Belarus : Judgment) [2017] EUECJ T-765/15 (27 September 2017) URL: http://www.bailii.org/eu/cases/EUECJ/2017/T76515.html Cite as: EU:T:2017:669, [2017] EUECJ T-765/15, ECLI:EU:T:2017:669

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