BSW - management company of "BMC" holding v Council (Common foreign and security policy - Restrictive measures taken in view of the situation in Belarus - Judgment) [2024] EUECJ T-258/22 (06 March 2024)

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(Common foreign and security policy – Restrictive measures taken in view of the situation in Belarus – Prohibitions on the import, purchase and transport of products as well as on the provision of services in the sector for iron and steel products originating from Belarus – Obligation to state reasons – Equal treatment – Misuse of powers – Proportionality – Right to property – Freedom to conduct a business)

AAT Byelorussian Steel Works – management company of ‘Byelorussian Metallurgical Company’ holding (BSW – management company of ‘BMC’ holding), established in Zhlobin (Belarus), represented by N. Tuominen and L. Engelen, lawyers,

Council of the European Union, represented by E. Rebasti and A. Boggio‑Tomasaz, acting as Agents,

European Commission, represented by M. Carpus Carcea and J. Norris, acting as Agents,

composed of S. Papasavvas, President, R. da Silva Passos, S. Gervasoni, N. Półtorak (Rapporteur) and T. Pynnä, Judges,

1 By its action under Article 263 TFEU, the applicant, AAT Byelorussian Steel Works – management company of ‘Byelorussian Metallurgical Company’ holding (BSW – management company of ‘BMC’ holding), seeks the annulment, first, of Council Decision (CFSP) 2022/356 of 2 March 2022 amending Decision 2012/642/CFSP concerning restrictive measures in view of the situation in Belarus (OJ 2022 L 67, p. 103; ‘the contested decision’), and second, of Council Regulation (EU) 2022/355 of 2 March 2022 amending Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus (OJ 2022 L 67, p. 1; ‘the contested regulation’) (together, ‘the contested acts’), in so far as they concern the applicant.

2 The applicant is a Belarusian company active in the field of iron and steel products.

3 On 24 February 2022, the Russian Federation launched a military attack on Ukraine.

4 On the same day, the High Representative of the Union for Foreign Affairs and Security Policy published a declaration on behalf of the European Union condemning in the strongest possible terms the invasion of Ukraine by armed forces of the Russian Federation.

5 At its special meeting on the same day, the European Council condemned the Russian Federation’s military aggression against Ukraine, while agreeing in principle to the adoption of restrictive measures and economic sanctions against the Russian Federation in the light of the proposals of the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy.

6 On 2 March 2022, in view of the gravity of the situation and in response to Belarus’ involvement in the Russian Federation’s aggression against Ukraine, the Council of the European Union adopted the contested acts in order to expand the scope of the sanctions previously imposed in view of the situation in Belarus, including restrictions related to the trade in iron and steel products.

7 On 3 August 2023, the Council adopted Implementing Decision (CFSP) 2023/1592 implementing Decision 2012/642/CFSP concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (OJ 2023 L 195 I, p. 31). On the same day, the Council adopted Implementing Regulation (EU) 2023/1591 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (OJ 2023 L 195 I, p. 1). By those acts, the applicant’s name was included in Annex I to Council Decision 2012/642/CFSP of 15 October 2012 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (OJ 2012 L 285, p. 1) and to Council Regulation (EC) No 765/2006 of 18 May 2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (OJ 2006 L 134, p. 1), respectively, in order to make the applicant subject to restrictive measures.

– annul Implementing Decision 2023/1592 and Implementing Regulation 2023/1591;

11 By the present action, the applicant seeks, as it confirmed at the hearing, the annulment of Article 2q inserted by the contested decision into Decision 2012/642 and of Article 1q inserted by the contested regulation into Regulation No 765/2006. Those provisions lay down, in almost identical terms, restrictions on the import, purchase and transport of products as well as on the provision of services in the sector for iron and steel products originating from Belarus.

12 Without raising a formal objection under Article 130(1) of the Rules of Procedure of the General Court, first, the Council claims that the Court has no jurisdiction to review the legality of the contested decision, since the measures provided for by Article 2q, inserted by the contested decision into Decision 2012/642, are of general application and do not constitute decisions providing for restrictive measures adopted against natural or legal persons, within the meaning of the second paragraph of Article 275 TFEU. Second, according to the Council, the action is inadmissible on the ground that the application for annulment does not meet the admissibility criteria laid down in the fourth paragraph of Article 263 TFEU.

13 The Council submits that the restrictions related to trade introduced by the contested decision apply to entities that might be involved in that trade and to an indefinite number of operators. In addition, the aim and effect of those measures is to apply economic sanctions against the Republic of Belarus in order to increase the cost of its actions in support of the aggression against Ukraine and to exert pressure on the Republic of Belarus to abide by its international obligations. Moreover, the fact that a measure may have repercussions on a natural or legal person does not mean that it is of individual application. Accordingly, in the light of the wording of Article 275 TFEU and in accordance with the case-law, the Court does not have jurisdiction to rule on the action in so far as that action is seeking the annulment of the contested decision.

14 The Commission, while stating that the limitations on the jurisdiction of the Court should be interpreted narrowly, submits that the Court has jurisdiction to review the legality of the restrictive measures covered by the present action, as set out in the contested decision. According to the Commission, since the Court has jurisdiction to review regulations adopted on the basis of Article 215(1) TFEU, it must also have jurisdiction to review common foreign and security policy (CFSP) decisions adopted on the basis of Article 29 TEU, which regulations adopted under Article 215 TFEU implement. The Commission also identifies a risk of lack of access to the courts.

15 The applicant submits that the Court has jurisdiction to rule on the legality of the contested decision.

16 As a preliminary point, it should be recalled that, under the last paragraph of Article 40 of the Statute of the Court of Justice of the European Union, applicable to the procedure before the General Court by virtue of Article 53 thereof, an application to intervene is to be limited to supporting the form of order sought by one of the parties.

17 Furthermore, Article 142(1) of the Rules of Procedure provides that ‘the intervention shall be limited to supporting, in whole or in part, the form of order sought by one of the main parties’.

18 In that regard, in accordance with settled case-law, an intervener may, nevertheless, use arguments different from those used by the party it is supporting, on the condition that they do not alter the framework of the dispute and that the intervention is still intended to support the form of order sought by that party (see judgment of 12 April 2019, Deutsche Lufthansa v Commission, T‑492/15, EU:T:2019:252, paragraph 134 and the case-law cited).

19 In the present case, it must be noted that the Commission submits that the Court has jurisdiction to review the legality of the contested decision. As is apparent from paragraph 12 above and from the Council’s defence, the Council has claimed that the action should be dismissed in so far as the Court has no jurisdiction to rule on the contested decision. Therefore, in that regard, the Commission’s arguments do not support the form of order sought by the Council.

20 In those circumstances, the Commission’s arguments to the effect that the Court has jurisdiction to review the legality of the contested decision must be rejected as inadmissible.

21 As regards the Court’s jurisdiction to rule on the legality of the contested decision, it must be borne in mind that, under the second paragraph of Article 275 TFEU, the Court of Justice and, consequently, the General Court, have jurisdiction ‘to rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Article 263 [TFEU], reviewing the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of Chapter 2 of Title V [TEU]’.

22 By contrast, the first paragraph of Article 275 TFEU provides that ‘the Court of Justice of the European Union shall not have jurisdiction with respect to the provisions relating to the common foreign and security policy nor with respect to acts adopted on the basis of those provisions’.

23 As regards measures adopted on the basis of provisions relating to the CFSP, it is the individual nature of those measures which, in accordance with the second paragraph of Article 275 TFEU, permits access to the Courts of the European Union (judgments of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 103, and of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 53).

24 It is therefore necessary to ascertain whether Article 2q, inserted by the contested decision into Decision 2012/642, entails restrictive measures against natural or legal persons, within the meaning of the second paragraph of Article 275 TFEU.

25 In the present case, the restrictive measures provided for in Article 2q, inserted by the contested decision into Decision 2012/642, are measures of general application, since they apply to objectively determined situations and to a category of persons envisaged in general and in the abstract. In particular, that provision does not target identified natural or legal persons, but is applicable generally to all operators involved in the import, purchase and transport of products as well as the provision of services in the field of iron and steel products originating from Belarus. In those circumstances, the measures laid down in that provision of the contested decision do not constitute restrictive measures against natural or legal persons within the meaning of the second paragraph of Article 275 TFEU, but rather measures of general application, in respect of whose legality the Court has no jurisdiction to rule (see, to that effect, judgments of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraphs 97 to 99, and of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 60).

26 That conclusion is not called into question by the fact that the applicant is seeking the annulment of the contested decision only in so far as that decision concerns it. The fact that that provision can be applied to the applicant does not alter its legal nature as a measure of general application vis-à-vis the applicant, especially since the applicant’s name was not mentioned in the contested decision. Furthermore, the fact that an action against the contested decision may not be brought before the Courts of the European Union does not deprive the persons to whom that decision applies of all judicial protection. First, as the Council asserts, it is open to the applicant to challenge, as it has done in the present dispute, the provisions of the contested regulation, adopted on the basis of Article 215 TFEU, that give effect to the contested decision at EU level and that reproduce its content. Under Article 266 TFEU, in the event of the annulment of that regulation, it is for the Council to adopt the measures required by the ruling given by the Court. Second, it cannot be ruled out that the acts that might be adopted by the Member States pursuant to the contested decision may be challenged before the national courts, in accordance with the rules governing proceedings before those courts.

27 It must therefore be concluded that the Court does not have jurisdiction to hear and determine the present action in so far as it is directed against Article 2q inserted by the contested decision into Decision 2012/642.

28 The Council, supported by the Commission, claims that Article 1q inserted by the contested regulation into Regulation No 765/2006 (‘the contested provision’) is not of direct concern to the applicant because it does not directly affect its legal situation. According to the Council, supported by the Commission, although the case-law has previously recognised that an economic operator was directly affected by restrictive measures on trade in certain products, that was only on account of the fact that that operator had been included on the list accompanying those measures. The Council submits that, in the present case, the prohibitions laid down by that provision apply only to EU economic operators and not to the applicant, which is not prevented from carrying on with its economic activity in Belarus, or to the iron and steel products sector in that country. The applicant is neither mentioned nor identified in the contested regulation. Moreover, that regulation imposes prohibitions defined objectively in relation to certain categories of products, and does not include a prohibition vis-à-vis an identified operator.

29 Furthermore, the Council relies on the case which gave rise to the order of 6 September 2011, Inuit Tapiriit Kanatami and Others v Parliament and Council (T‑18/10, EU:T:2011:419), and submits that negative economic consequences are not relevant for the purpose of assessing whether the applicant is directly affected. In that regard, the Council submits that, in any event, the applicant has not even shown that the contested restrictive measures have had factual direct effects on its economic situation.

30 Lastly, the Council raises a plea of inadmissibility under Article 76 of the Rules of Procedure inasmuch as the application lacks clarity and precision in the event that the present action extends beyond the annulment of the contested provision and is seeking the annulment of the contested regulation in its entirety in so far as it concerns the applicant.

32 As a preliminary point, it must be noted that the plea of inadmissibility raised by the Council under Article 76 of the Rules of Procedure is based on the premiss that the present action is seeking the annulment of the contested regulation in its entirety. As stated in paragraph 11 above, the applicant has confirmed that, as regards the contested regulation, it is seeking solely the annulment of the contested provision. That plea of inadmissibility should therefore be rejected.

33 That said, as regards the applicant’s standing to bring proceedings, it must be borne in mind that, under the fourth paragraph of Article 263 TFEU, any natural or legal person may, under the conditions laid down in the first and second paragraphs, institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures. The second limb of the fourth paragraph of Article 263 TFEU specifies that if the natural or legal person who brings the action for annulment is not a person to whom the contested act is addressed, the admissibility of the action is subject to the condition that the act is of direct and individual concern to that person. By means of the Treaty of Lisbon, there was also added to the fourth paragraph of Article 263 TFEU a third limb which relaxed the conditions of admissibility of actions for annulment brought by natural and legal persons. Since the effect of that limb is that the admissibility of actions for annulment brought by natural and legal persons is not subject to the condition of individual concern, it renders possible such legal actions against ‘regulatory acts’ which do not entail implementing measures and are of direct concern to the applicant (see judgment of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 71 and the case-law cited).

34 In the first place, as regards the condition of the applicant being directly affected, it must be borne in mind that, according to settled case-law, the condition that the measure forming the subject matter of the proceedings must be of direct concern to a natural or legal person, as laid down in the fourth paragraph of Article 263 TFEU, requires the fulfilment of two cumulative criteria, that is to say, the contested measure should, first, directly affect the legal situation of that individual and, second, should leave no discretion to the addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from EU rules alone without the application of other intermediate rules (see judgment of 22 June 2021, Venezuela v Council (Whether a third State is affected), C‑872/19 P, EU:C:2021:507, paragraph 61 and the case-law cited).

35 It is appropriate, for the purpose of determining direct concern to a person, for consideration to be given not only to the effects of an EU act on a person’s legal situation, but also to its factual effects on that person, and such effects must be more than merely indirect. This must be determined specifically in each individual case having regard to the regulatory content of the EU act in question (judgment of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 97).

36 In the present case, it must be borne in mind that paragraph 1 of the contested provision lays down a prohibition extending to the European Union on the import, purchase and transport of products as well as on the provision of services, whether directly or indirectly, in the field of iron and steel products originating from Belarus. Under paragraph 2 of that provision, ‘the prohibitions in paragraph 1 shall be without prejudice to the execution until 4 June 2022 of contracts concluded before 2 March 2022, or ancillary contracts necessary for the execution of such contracts’. Thus, the Court finds that, for reasons similar to those set out in paragraph 25 above, that provision is of general application since it does not target identified natural or legal persons or, moreover, the applicant, but applies generally to all operators involved in the import, purchase and transport of products as well as the provision of services in the field of iron and steel products originating from Belarus.

37 That said, first, as regards the first criterion set out in paragraph 34 above, the restrictive measures resulting from the contested provision apply directly to the applicant as immediate consequence of the fact that it carries on an economic activity in the sector covered by those measures. At the hearing, the Council stated that it is not calling into question the fact that the applicant is active on the market in that sector. In addition, the applicant has provided the list of its European customers as well as evidence relating to cancellations of orders placed by European operators after and as a result of the introduction of the restrictive measures at issue. It is also apparent from paragraph 2 of the contested provision relating to restrictions on exports to the European Union that, on account of its adoption, the applicant was unable, in practice and in law, to conclude new contracts or to require the execution, after 4 June 2022, of contracts concluded with EU operators before 2 March 2022, or of ancillary contracts necessary for the execution of such contracts (see, to that effect, judgment of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraphs 88 and 89). Thus, the prohibitions contained in paragraph 1 of that provision, namely the prohibition on the import, purchase and transport of products as well as on the provision of services in the iron and steel products sector, have the immediate and automatic effect of preventing the applicant, inter alia, from exporting the products in question to the European Union (see, to that effect, judgment of 22 June 2021, Venezuela v Council (Whether a third State is affected), C‑872/19 P, EU:C:2021:507, paragraph 69).

38 It is of little importance, in that regard, that the contested provision does not prohibit the applicant from carrying out the transactions concerned outside the European Union, in particular in Belarus. It is common ground that that provision imposes restrictions on access to the EU market for iron and steel products and that the applicant is an economic operator active in that field. Thus, as regards prohibitions such as those laid down in that provision, the condition that such measures must be of direct concern to a legal person does not mean that it must be entirely impossible for that person to carry out its activities (see, to that effect, judgment of 22 June 2021, Venezuela v Council (Whether a third State is affected), C‑872/19 P, EU:C:2021:507, paragraphs 69 and 71).

39 Similarly, the Court rejects the argument of the Council and of the Commission that the applicant’s legal situation is not directly affected on the ground that the measures imposed by the contested provision relating to access to the market for iron and steel products apply solely to economic operators established in the European Union. While it is true that that provision lays down prohibitions which apply to economic operators established in the European Union, the purpose and effect of those prohibitions is directly to affect the entities, such as the applicant, whose economic activity is limited as a result of the measures applying to them. The fact of prohibiting EU operators from carrying out certain types of transaction with entities established outside the European Union, in the present case with an undertaking established in Belarus, amounts to prohibiting that undertaking from carrying out the transactions in question with EU operators (see, to that effect, judgment of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 75).

40 Furthermore, the Council cannot reasonably rely on the order of 6 September 2011, Inuit Tapiriit Kanatami and Others v Parliament and Council (T‑18/10, EU:T:2011:419), in support of its argument. In that case, the Court held that Regulation (EC) No 1007/2009 of the European Parliament and of the Council of 16 September 2009 on trade in seal products (OJ 2009 L 286, p. 36) affected only the legal situation of the applicants that were active in the placing on the market of the European Union of seal products and that were therefore concerned by the general prohibition of the placing on the market of those products, unlike the applicants intervening upstream or downstream of that placing on the market (see, to that effect, order of 6 September 2011, Inuit Tapiriit Kanatami and Others v Parliament and Council, T‑18/10, EU:T:2011:419, paragraphs 75 and 79). In the present case, as the applicant has demonstrated and as the Council confirmed at the hearing, the applicant is active on the market for iron and steel products in Belarus, covered by the contested provision, and not on any upstream or downstream market. It is because of that provision relating to access to the EU market as regards iron and steel products originating from Belarus that it was impossible for the applicant to carry out transactions in the sector for those products with bodies or entities established in the European Union, although it would have been entitled to carry out such transactions in the absence of that provision (see, to that effect, judgment of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 76).

41 Second, as regards the second criterion set out in paragraph 34 above, it is apparent from the wording of the contested provision that the prohibitions laid down leave no discretion to its addressees who are entrusted with its implementation. Those prohibitions are purely automatic and result from the rules at issue alone, without the application of other intermediate rules. The contested provision does not leave any discretion to the national authorities, since it prohibits, in the European Union, the import, purchase and transport of iron and steel products originating from Belarus as well as the provision of related services, whether directly or indirectly.

42 It must be concluded, therefore, that the prohibitions laid down by the contested provision are of direct concern to the applicant.

43 In the second place, it must be noted that the contested regulation, which, as stated in paragraph 36 above, is of general application and which, since it was adopted on the basis of Article 215 TFEU and, accordingly, under the non-legislative procedure laid down in that provision, cannot be regarded as a legislative act, constitutes a ‘regulatory act’, within the meaning of the third limb of the fourth paragraph of Article 263 TFEU (see, to that effect, judgment of 22 June 2021, Venezuela v Council (Whether a third State is affected), C‑872/19 P, EU:C:2021:507, paragraph 92 and the case-law cited).

44 Furthermore, it must be recalled that, according to the case-law, the question whether a regulatory act entails implementing measures should be assessed by reference to the position of the person pleading the right to bring proceedings under the final limb of the fourth paragraph of Article 263 TFEU. It is therefore irrelevant whether the act in question entails implementing measures with regard to other persons (see, to that effect, judgment of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 99 and the case-law cited).

45 In the present case, it follows from the very wording of the contested provision that the prohibitions laid down by that provision apply without leaving any discretion to the addressees entrusted with the task of implementing them. Those prohibitions are moreover applicable without requiring the adoption of implementing measures, either by the European Union or by the Member States (see, to that effect, judgment of 22 June 2021, Venezuela v Council (Whether a third State is affected), C‑872/19 P, EU:C:2021:507, paragraph 90).

46 The Court therefore finds that the contested provision relating to access to the EU market as regards iron and steel products originating from Belarus is a regulatory provision which does not entail implementing measures, within the meaning of the third limb of the fourth paragraph of Article 263 TFEU. Consequently, in addition to the condition relating to the absence of implementing measures, which is satisfied, it is sufficient that the applicant be directly affected by that provision, which is the case here.

47 It follows from all the foregoing considerations that the applicant has standing to bring proceedings against the contested provision and that the present action is admissible in so far as it is seeking the annulment of that provision.

48 In its statement of modification, the applicant is seeking the annulment of Implementing Decision 2023/1592 and of Implementing Regulation 2023/1591.

49 In its observations on the statement of modification, the Council, supported by the Commission, raises a plea of inadmissibility alleging that the request for modification is inadmissible in so far as it is seeking the annulment of that implementing decision and of that implementing regulation. According to the Council, the subject matter of those acts is different from that of the contested acts. The Council submits that the modification of the application is not in the interests of the sound administration of justice.

50 In that regard, it must be recalled that Article 86(1) of the Rules of Procedure provides that where a measure the annulment of which is sought is replaced or amended by another measure with the same subject matter, the applicant may, before the oral part of the procedure is closed, or before the decision of the Court to rule without an oral part of the procedure, modify the application to take account of that new factor.

51 It must be borne in mind that, according to the case-law, the forms of order sought by the parties may not, in principle, be altered. Article 86 of the Rules of Procedure is a codification of pre-existing case-law on the admissible exceptions to the principle that the forms of order sought by the parties are unalterable (judgment of 9 November 2017, HX v Council, C‑423/16 P, EU:C:2017:848, paragraph 18). Thus, as an exception to the principle of unalterability of proceedings, that provision must be interpreted strictly (judgment of 20 September 2018, Spain v Commission, C‑114/17 P, EU:C:2018:753, paragraph 54).

52 Furthermore, according to the case‑law, 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 its original pleadings to the later measure or of submitting supplementary pleadings directed against that measure (see judgment of 6 September 2013, Bank Melli Iran v Council, T‑35/10 and T‑7/11, EU:T:2013:397, paragraph 53 and the case-law cited).

53 In the present case, it should be noted that the contested acts and, in particular, Article 2q inserted by the contested decision into Decision 2012/642 and the contested provision contain, as found in paragraphs 25 and 36 above, measures of general application, namely sectoral restrictive measures. By contrast, Implementing Decision 2023/1592 and Implementing Regulation 2023/1591, in so far as they provide for the inclusion of the applicant on the lists of restrictive measures, are of individual application vis-à-vis the applicant.

54 Furthermore, those acts have no bearing on the contested acts. The contested acts are not the basis for or acts prior to the adoption of Implementing Decision 2023/1592 and Implementing Regulation 2023/1591 and have no connection with those acts. Moreover, they make no reference to the contested acts.

55 It follows that Implementing Decision 2023/1592 and Implementing Regulation 2023/1591 do not have the same subject matter as the contested acts. Consequently, in the present case, an exception to the principle that the forms of order sought by the parties may not be altered is not justified.

56 It follows from the foregoing that the request to modify the application is inadmissible.

57 In support of its action, the applicant relies on three pleas in law, alleging (i) failure to state reasons and infringement of the right to effective judicial protection and of the right to a fair hearing, (ii) failure to observe the principle of equal treatment and a misuse of powers, and (iii) disproportionality of the restrictive measures provided for by the contested provision and infringement of the applicant’s fundamental rights.

The first plea in law, alleging failure to state reasons and infringement of the right to effective judicial protection and of the right to a fair hearing

58 The applicant claims that the contested regulation is not adequately reasoned inasmuch as it does not contain a similar degree of reasoning to that applied in the context of restrictive measures relating to asset freezing.

59 The applicant submits that, so far as it is concerned, the contested provision imposes individual restrictive measures.

60 The applicant states that the Council was required to demonstrate that the factual allegations were supported by evidence. Furthermore, it should also be verified that the justification for the restrictions is correct. According to the applicant, the Council, with which the burden of proof lies, failed to provide sufficient evidence.

61 The applicant further submits that no explanation is provided as to the need to impose restrictions on its products and as to why the criteria for listing were fulfilled. Nor has the Council indicated whether the applicant was controlled by the Belarusian Government, or the reasons for concluding that it has a significant role in the economy of the Republic of Belarus. Moreover, the contested regulation does not state how the restrictions imposed on the applicant might help achieve their aims.

62 Furthermore, at the hearing, the applicant raised the inadmissibility of Annex C.1 to the rejoinder, which seeks to demonstrate that the iron and steel products sector ranks foremost among the categories of products most exported by Belarus.

63 The Council, supported by the Commission, disputes the applicant’s line of argument.

64 In the first place, it must be noted, as the applicant confirmed at the hearing, that it does not put forward any argument relating to the complaint alleging infringement of the right to a fair hearing.

65 In that regard, it should be recalled that, under Article 76(d) of the Rules of Procedure, the application must contain a summary of each plea in law relied on. In addition, it is settled case-law that that summary must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action, if necessary without having to seek further information. It is also settled case-law that any plea which is not adequately articulated in the application initiating the proceedings must be held inadmissible. Similar requirements apply where a submission is made in support of a plea in law. That objection constitutes an absolute bar to proceedings which must be raised by the Court of its own motion (see judgment of 15 June 2017, Kiselev v Council, T‑262/15, EU:T:2017:392, paragraph 138 and the case-law cited).

66 Consequently, since it is not substantiated by any argument whatsoever, that complaint must be rejected as inadmissible.

67 In the second place, it must be borne in mind that the right to effective judicial protection, which is affirmed in Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter), requires that the person concerned must be able to ascertain the reasons upon which the decision taken in relation to him or her is based, inter alia by reading the decision itself, so as to make it possible for that person to defend his or her rights in the best possible conditions and to decide, with full knowledge of the relevant facts, whether there is any point in his or her applying to the court having jurisdiction, and in order to put the latter fully in a position to review the lawfulness of the decision in question (see judgment of 22 September 2021, Al-Imam v Council, T‑203/20, EU:T:2021:605, paragraph 128 (not published) and the case-law cited).

68 It must be stated that, in the present case, the applicant complains that the contested regulation is not reasoned.

69 In those circumstances, it is necessary to examine whether the restrictive measures provided for by the contested provision are adequately reasoned.

70 As concluded in paragraph 36 above, the restrictive measures provided for by the contested provision are measures of general application.

71 It must therefore be recalled that the statement of reasons required by Article 296 TFEU must show clearly and unequivocally the reasoning of the Council, so as to enable the persons concerned to ascertain the reasons for the measures and to enable the EU judicature to exercise its powers of review. In addition, the question whether a statement of reasons satisfies the requirements must be assessed with reference not only to the wording of the measure but also to its context and to the whole body of legal rules governing the matter in question. Furthermore, it is settled case-law that the extent of the requirement to state reasons depends on the nature of the measure in question, and that, in the case of measures intended to have general application, as in the present case, the statement of reasons may be limited to indicating the general situation which led to the measure’s adoption, on the one hand, and the general objectives which it is intended to achieve, on the other (see judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 120 and the case-law cited; judgment of 31 January 2007, Minin v Commission, T‑362/04, EU:T:2007:25, paragraph 80).

72 In the present case, it is apparent from recitals 3 to 5 of the contested regulation that that regulation was adopted in order to give effect, at EU level, to the contested decision. Furthermore, recital 4 of that regulation refers to the restrictive measures laid down in the contested decision, reproduced in the contested regulation. Therefore, the reasons stated in the contested decision in support of the introduction of those measures form part of the context in which they were adopted, which the applicant could understand from reading the contested regulation.

73 First, as regards the general situation which led to the adoption of the contested regulation, it is apparent from recital 3 thereof that the Council adopted the contested decision in order to ‘implement the conclusions of the European Council of 24 February 2022 following the involvement of [the Republic of] Belarus in the unacceptable and illegal Russian military aggression against Ukraine, which under international law qualifies as an act of aggression’. In recital 4 of that regulation, it is stated that the contested decision introduced further restrictions related inter alia to the iron and steel products sector.

74 Furthermore, in recital 3 of the contested decision, reference is made to the conclusions of the European Council and to the fact that, by those conclusions, the Council condemned, first, ‘the Russian Federation’s unprovoked and unjustified military aggression against Ukraine’, which thus ‘grossly [violated] international law and the principles of the United Nations Charter’, and second, ‘the involvement of Belarus in this aggression’, calling on it ‘to refrain from such action and to abide by its international obligations’. In that context, the European Council called for ‘the urgent preparation and adoption of a package of further individual and economic sanctions, also covering Belarus’. Thus, in recital 4 of that decision, it is stated that, ‘in view of the gravity of the situation, and in response to Belarus’s involvement in Russia’s aggression against Ukraine, it is appropriate … to introduce further restrictive measures’.

75 It is apparent from paragraphs 72 to 74 above that the contested regulation, read in conjunction with the contested decision which forms part of the context known to the applicant and to which that regulation gives effect at EU level, contains an adequate statement of reasons as regards the general situation which led to its adoption and, in particular, that of the contested provision.

76 Second, as regards the general objectives which the contested regulation is intended to achieve, it follows from recital 3 of the contested regulation and recital 3 of the contested decision that the restrictive measures were imposed, first, on account of the involvement of the Republic of Belarus in the aggression against Ukraine, and second, in order for the Republic of Belarus to refrain from ‘such action’ and in order to incentivise it to ‘abide by its international obligations’.

77 It is apparent also from the conclusions of the European Council of 24 February 2022, referred to in recital 3 of the contested regulation and recital 3 of the contested decision, that that institution ‘agrees on further restrictive measures that will impose massive and severe consequences on Russia for its action’ and ‘calls for the urgent preparation and adoption of a further individual and economic sanctions package that will also cover Belarus’.

78 It follows from that that the objective of the restrictive measures imposed by the contested regulation is to put pressure on the Republic of Belarus to refrain from any involvement in the aggression against Ukraine and to incentivise it to abide by its international obligations. In that regard, the applicant cannot claim that those efforts are aimed at removing the current Belarusian regime. It is clear from the considerations set out in paragraphs 73, 74 and 76 above and from the title of Regulation No 765/2006, as amended by the contested regulation, that the latter was adopted in view of the involvement of the Republic of Belarus in the Russian aggression against Ukraine.

79 Furthermore, even if, in accordance with the case-law cited in paragraph 71 above, the Council was not required to provide a specific statement of reasons regarding the choice of the iron and steel products sector, having regard to the political context prevailing at the date of adoption of the restrictive measures at issue, its choice to adopt measures concerning that sector can readily be understood in the light of the declared objective of the contested acts, which is to incentivise the Republic of Belarus to refrain from any involvement in the Russian Federation’s aggression against Ukraine and to abide by its international obligations (see, to that effect and by analogy, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 124). It follows also that the annex referred to in paragraph 62 above, even supposing it were admissible, is not, in any event, relevant for the purpose of analysing the present plea in law.

80 It follows that, in accordance with the case-law cited in paragraph 71 above, the contested regulation is adequately reasoned, which enabled the applicant to ascertain the general situation which led to the adoption of the restrictive measures provided for in the contested provision and their general objectives, and the EU judicature to exercise its power of review.

81 As regards the applicant’s arguments relating to insufficient evidence and justification of the alleged facts, it should be pointed out that those allegations concern the merits of the contested regulation.

82 It must be borne in mind that the duty to state reasons on which an act is based is an essential procedural requirement which must be distinguished from the question whether the reasoning is well founded, which is concerned with the substantive legality of the act in question. The reasoning of an act consists in a formal statement of the grounds on which that act is based. If those grounds are unsupported or are vitiated by errors, that will vitiate the substantive legality of the decision, but not the statement of reasons in it (see judgment of 6 October 2020, Bank Refah Kargaran v Council, C‑134/19 P, EU:C:2020:793, paragraph 64 and the case-law cited).

83 Moreover, since the restrictive measures provided for by the contested provision are measures of general application, in accordance with the case-law cited in paragraph 71 above, the Council was not required to provide a specific statement of reasons relating to the individual situation of the applicant, which was not individually targeted by those measures. Contrary to what the applicant claims, it is not included on a list of persons subject to restrictive measures, at the very least in the contested regulation.

84 The first plea in law must therefore be rejected, without it being necessary to rule on the admissibility of Annex C.1, as is apparent from paragraph 79 above.

The second plea in law, alleging failure to observe the principle of equal treatment and a misuse of powers

85 The second plea is divided into two parts, the first alleging failure to observe the principle of equal treatment and the second a misuse of powers.

– The first part, alleging failure to observe the principle of equal treatment

86 The applicant submits that the Council has not shown that it is in a position that is any different than any other business that is economically important to the Republic of Belarus. According to the applicant, the declared objective of the contested restrictive measures does not justify the difference in treatment between the different national economic sectors. The applicant also submits that the principle of equal treatment was not observed on the ground that it does not enjoy the rights afforded to persons who are individually targeted by restrictive measures.

87 The Council, supported by the Commission, disputes the applicant’s line of argument.

88 In the present case, it must be recalled that, according to the case-law, the principle of equal treatment, which constitutes a fundamental principle of law, prohibits comparable situations from being treated differently or different situations from being treated in the same way, unless such difference in treatment is objectively justified (see judgment of 31 May 2018, Kaddour v Council, T‑461/16, EU:T:2018:316, paragraph 152 and the case-law cited).

89 In the first place, as regards the alleged difference in treatment between the applicant and any other business that is economically important for the Republic of Belarus, the applicant does not provide any specific example of other undertakings which are in a situation comparable to its own and which are treated differently. In those circumstances, the Court is not in a position to ascertain whether its allegations are in fact well founded (see, to that effect, judgment of 30 November 2016, Export Development Bank of Iran v Council, T‑89/14, not published, EU:T:2016:693, paragraph 120).

90 In the second place, as regards the argument relating to the difference in treatment between the different economic sectors, the applicant does not refer to any other sector that might be in a situation comparable to that of the iron and steel products sector. Furthermore, it should be borne in mind that the Council has a broad discretion when it determines the purpose of restrictive measures, particularly where such measures prescribe, in accordance with Article 215(1) TFEU, the interruption or reduction, in whole or in part, of economic and financial relations with one or more third countries. As regards the restrictive measures at issue aimed at the iron and steel products sector, it was, inter alia, open to the Council to impose, if it deemed it appropriate, restrictions which targeted specific sectors of the economy of the Republic of Belarus in order to exert pressure on that third State to refrain from involvement in the aggression against Ukraine (see, to that effect, judgments of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 132, and of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 144).

91 In any event, even assuming that the Council had failed to adopt restrictive measures against other undertakings or other economic sectors, that fact could not reasonably be relied on by the applicant, since the principle of equal treatment must be interpreted in the light of the broad discretion enjoyed by the Council when it determines on a case-by-case basis whether the legal criteria on which the measures at issue are based are satisfied. In the present case, by choosing to target the iron and steel products sector rather than another sector of the Belarusian economy, it does not appear that the Council exceeded its broad discretion having regard to the general objective which it intends to achieve or that it failed to observe the principle of equal treatment (see, to that effect, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 132).

92 In the third place, the applicant does not specify what rights it is referring to that, in its submission, it does not enjoy, unlike persons individually targeted by restrictive measures.

94 The applicant claims that the contested restrictive measures are vitiated by a misuse of powers. In the first place, the applicant submits that its ties with the Belarusian Government are insufficient. In the second place, the contested regulation does not set out the connection between the entities targeted by those measures and the objective of those measures, that is to say, that of increasing the costs for the Republic of Belarus with a view to removing the current regime. Such an objective is inconsistent with the objective of maintaining peace and international security, in accordance with the objectives of the European Union’s external action laid down in Article 21 TEU. In the third place, the applicant claims that it has never had any involvement with the Belarusian army or contributed to or profited from the conflict in Ukraine.

96 In that regard, it must be recalled that, according to the case-law, a measure is vitiated by misuse of powers only if it appears, on the basis of objective, relevant and consistent evidence, to have been taken solely, or at the very least chiefly, for ends other than those for which the power in question was conferred or with the aim of evading a procedure specifically prescribed by the Treaties for dealing with the circumstances of the case (see judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 135 and the case-law cited).

97 In the present case, first of all, by merely stating that it had no ties with the actions of the Belarusian Government or army, the applicant has not demonstrated that the contested restrictive measures were adopted for a purpose other than that apparent from the contested regulation, that is to say, that of exerting pressure on the Republic of Belarus to refrain from involvement in the aggression against Ukraine, let alone provided objective, relevant and consistent evidence in that regard.

98 Furthermore, the restrictive measures provided for by the contested provision are of general application, covering certain economic sectors instead of certain entities identified by name. Therefore, the Council was not required to show a link between the entities that could be affected by the contested restrictive measures and the objective of those measures.

99 Next, in view of the objective of the contested restrictive measures, it was not required that the undertakings liable to be affected by those measures have ties with the Belarusian Government or contribute to or benefit from the war in Ukraine.

100 Lastly, the objective of the contested restrictive measures, that is to say, that of exerting pressure on the Republic of Belarus to refrain from involvement in the aggression against Ukraine, corresponds to the objectives set out in Article 21(2)(c) TEU, aimed at preserving peace, preventing conflicts and strengthening international security.

101 Consequently, the second part of the second plea in law must be rejected and, therefore, that plea must be rejected in its entirety.

The third plea in law, alleging disproportionality of the contested restrictive measures and infringement of fundamental rights

102 The applicant alleges an infringement of its freedom to conduct a business and of its right to property inasmuch as the contested restrictive measures prevent it from freely pursuing an economic activity. According to the applicant, the conditions for limiting its fundamental rights are not satisfied in the present case.

103 Furthermore, in the applicant’s submission, there is a failure to observe the principle of proportionality, too, since the objective of removing the current Belarusian regime by means of economic pressure is not consistent with Article 21 TEU and that objective is not attained by disproportionately obstructing its access to an entire market. Moreover, the contested restrictive measures are neither necessary nor appropriate.

104 The applicant submits that it has no connection with the events in Ukraine or with the Belarusian regime.

105 In addition, in its observations on the Commission’s statement in intervention, the applicant submits that the Council has provided neither the criteria nor the reasons for its inclusion among the addressees of the restrictive measures. The applicant does not meet any criterion since it has no link with the Belarusian and Russian military. The applicant asserts that, in accordance with Article 47 of the Charter, the decision to impose restrictive measures on a person or entity concerned individually should be taken on a sufficiently solid factual basis, which entails a verification of the allegations 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.

106 The Council, supported by the Commission, disputes the applicant’s line of argument.

107 In that regard, in so far as the applicant is challenging the proportionality of the restrictive measures laid down by the contested provision, which, as concluded in paragraph 36 above, are of general application, it should be borne in mind that, according to the case-law, the EU legislature must be allowed a broad discretion in areas which involve political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Thus, the legality of a measure adopted in those areas can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue (see judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 146 and the case-law cited).

108 Contrary to what the applicant claims, there is a reasonable relationship between those restrictive measures and the objective they pursue. In so far as that objective is to exert pressure on the Republic of Belarus to refrain from any involvement in the aggression against Ukraine, the approach of targeting the Belarusian iron and steel products sector in which, according to the applicant, the Republic of Belarus is among the top five exporters to the European Union, is consistent with that objective and cannot, in any event, be regarded as manifestly inappropriate in the light of the objective pursued.

109 Furthermore, as regards the argument that there is no link between the applicant and the events in Ukraine or the Belarusian regime, it must be noted that, given that the restrictive measures provided for in the contested provision do not individually target the applicant, but relate generally to the iron and steel products sector, it is not necessary for a link between the applicant and the events in Ukraine or the Belarusian regime to be established. Contrary to what is claimed by the applicant, and as stated in paragraph 83 above, it is not included on a list of persons subject to restrictive measures, at the very least in the contested regulation. Therefore, the contested provision cannot be treated in the same way as a decision imposing restrictive measures on the applicant individually.

110 Consequently, the Court holds that the restrictive measures provided for by the contested provision are not disproportionate, especially since paragraph 2 of that provision provides for certain safeguards in respect of contracts that are in force as at the date of adoption of the contested regulation.

111 As regards the fundamental rights relied on by the applicant, namely the freedom to conduct a business and the right to property, it should be pointed out that those fundamental rights are not absolute and may therefore be subject to limitations, as provided in Article 52(1) of the Charter (see judgment of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 161 and the case-law cited).

112 In that regard, it must be borne in mind that, according to Article 52(1) of the Charter, first, ‘any limitation on the exercise of the rights and freedoms recognised by [the] Charter must be provided for by law and respect the essence of those rights and freedoms’, and second, ‘subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the [European] Union or the need to protect the rights and freedoms of others’.

113 Thus, in order to comply with EU law, a limitation on the exercise of the fundamental rights concerned must satisfy three conditions. First, the limitation must be provided for by law. In other words, the measure in question must have a legal basis. Second, the limitation must refer to an objective of general interest, recognised as such by the European Union. Third, the limitation may not be excessive. It must be necessary and proportional to the aim sought, and the ‘essential content’, that is the substance, of the right or freedom at issue must not be impaired (see judgment of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 163 and the case-law cited).

115 In the first place, the contested restrictive measures are ‘provided for by law’, since they are set out in an act which is, in particular, of general application, namely the contested regulation, has a clear legal basis in EU law, namely Article 215 TFEU, and has an adequate statement of reasons, as is apparent from paragraphs 70 to 84 above.

116 In the second place, as stated in paragraphs 76 to 78 above, the objective of the contested regulation is to exert pressure on the Republic of Belarus to refrain from any involvement in the aggression against Ukraine. That objective is consistent with the objective of maintaining peace, preventing conflicts and strengthening international security, in accordance with the objectives of the European Union’s external action set out in Article 21(2)(c) TEU (see, to that effect, judgments of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 115, and of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 166).

117 In the third place, as regards the principle of proportionality, reference should be made to the reasons set out in paragraphs 107 to 110 above and it must be added that restrictive measures, by definition, have consequences which affect rights to property and the freedom to pursue a trade or business, thereby causing harm to persons who are in no way responsible for the situation which led to the adoption of the sanctions (judgments of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 149, and of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 170).

118 However, the importance of the objective pursued by the contested restrictive measures, which is intended to exert pressure on the Republic of Belarus to refrain from any involvement in the aggression against Ukraine, the achievement of which, as is apparent from paragraph 100 above, is part of the objective of maintaining peace, preventing conflicts and strengthening international security, is such as to justify the possibility that, for certain operators, which are in no way responsible for the situation which led to the adoption of the sanctions, the consequences may be negative, even significantly so (judgment of 13 September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph 171; see also, to that effect, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 150).

119 In those circumstances, the interference with the applicant’s freedom to conduct a business and its right to property cannot be regarded as disproportionate.

121 Since all the pleas in law have been rejected, the action must be dismissed.

122 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

123 Since the Council has applied for costs and the applicant has been unsuccessful, the latter must be ordered to bear its own costs and to pay those incurred by the Council.

124 The Commission is to bear its own costs, in accordance with Article 138(1) of the Rules of Procedure.

2. Orders AAT Byelorussian Steel Works – management company of ‘Byelorussian Metallurgical Company’ holding (BSW – management company of ‘BMC’ holding) to pay, in addition to its own costs, 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) >> BSW - management company of "BMC" holding v Council (Common foreign and security policy - Restrictive measures taken in view of the situation in Belarus - Judgment) [2024] EUECJ T-258/22 (06 March 2024) URL: http://www.bailii.org/eu/cases/EUECJ/2024/T25822.html Cite as: EU:T:2024:150, [2024] EUECJ T-258/22, ECLI:EU:T:2024:150

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