SOURCE: Monthly Case-law Digest - June 2021
Appeal – Common foreign and security policy (CFSP) – Restrictive measures taken with regard to the situation in Venezuela – Action for annulment brought by a third State – Admissibility – Fourth paragraph of Article 263 TFEU – Locus standi – Condition that the applicant must be directly concerned by the measure that forms the subject matter of the action – Concept of a ‘legal person’ – Interest in bringing proceedings – Regulatory act which does not entail implementing measures
In 2017, the Council of the European Union adopted restrictive measures against the Bolivarian Republic of Venezuela (‘Venezuela’), in view of the deterioration of democracy, the rule of law and human rights in that country. Articles 2, 3, 6 and 7 of Regulation 2017/2063 laid down, inter alia, a prohibition on selling or supplying military equipment and related technology which might be used for internal repression to any natural or legal person, entity or body in Venezuela, and a prohibition on providing certain technical, brokering or financial services connected with the supply of such equipment to those natural or legal persons, entities or bodies in Venezuela.
On 6 February 2018, Venezuela brought an action for annulment of Regulation 2017/2063, in so far as its provisions concern Venezuela. It subsequently adapted its application so that it also referred to Decision 2018/1656 and Implementing Regulation 2018/1653, by which the Council had extended the restrictive measures adopted. By judgment of 20 September 2019, the General Court of the European Union dismissed that action as inadmissible, on the ground that the legal situation of Venezuela was not directly affected by the contested provisions.
The Court of Justice, before which Venezuela lodged an appeal, rules on the application of the criteria for admissibility laid down in the fourth paragraph of Article 263 TFEU in relation to an action for annulment brought by a third State against restrictive measures adopted by the Council in view of the situation in that State. It sets aside the judgment of the General Court in so far as the latter had declared inadmissible the action brought by Venezuela for annulment of Articles 2, 3, 6 and 7 of Regulation 2017/2063 and refers the case back to the General Court for judgment on the merits of that action.
Findings of the Court
As a preliminary point, the Court notes that, since Venezuela’s appeal does not relate to the part of the judgment under appeal in which its action for annulment of Implementing Regulation 2018/1653 and Decision 2018/1656 was dismissed as inadmissible, the General Court has given a final ruling in that respect. Next, the Court points out that, according to settled case-law, it may rule, if necessary of its own motion, whether there is an absolute bar to proceeding arising from disregard of the conditions as to admissibility laid down in Article 263 TFEU.
In the present case, it raises of its own motion the question whether Venezuela may be regarded as a ‘legal person’ within the meaning of the fourth paragraph of Article 263 TFEU. In that regard, it observes that it does not follow from that provision that certain categories of legal persons cannot avail themselves of the possibility of bringing an action for annulment provided for in that article. Nor, moreover, does it follow from its earlier case-law that the concept of a ‘legal person’, used in the fourth paragraph of Article 263 TFEU, is to be interpreted restrictively. The Court then points out that the principle that one of the European Union’s founding values is the rule of law follows from both Article 2 TEU and Article 21 TEU, to which Article 23 TEU, relating to the CFSP, refers. In those circumstances, it considers that, under the fourth paragraph of Article 263 TFEU, read in the light of the principles of effective judicial review and the rule of law, a third State should have standing to bring proceedings as a ‘legal person’, within the meaning of the fourth paragraph of Article 263 TFEU, where the other conditions laid down in that provision are satisfied. It states in that regard that the European Union’s obligations to ensure respect for the rule of law are not subject to a condition of reciprocity. Accordingly, Venezuela, as a State with international legal personality, must be regarded as a ‘legal person’ within the meaning of the fourth paragraph of Article 263 TFEU.
Next, the Court holds that the General Court erred in law in considering that the restrictive measures at issue did not directly affect the legal situation of Venezuela. In that regard, it notes that the restrictive measures at issue were adopted against Venezuela. Prohibiting EU operators from carrying out certain transactions amounted to prohibiting Venezuela from carrying out those transactions with those operators. Furthermore, since the entry into force of Regulation 2017/2063 had the effect of immediately and automatically applying the prohibitions laid down in Articles 2, 3, 6 and 7 thereof, those prohibitions prevented Venezuela from obtaining numerous goods and services. The Court concludes from this that those provisions directly affect the legal situation of that State. It considers, in that regard, that it is not necessary to draw a distinction according to whether the commercial transactions of that State constitute acts carried out in a private capacity (iure gestionis) or acts carried out in the exercise of State sovereignty (iure imperii). Similarly, it notes that the fact that the restrictive measures at issue do not constitute an absolute obstacle preventing Venezuela from procuring the goods and services in question is irrelevant in that respect.
Subsequently, the Court of Justice gives final judgment on the other grounds of inadmissibility initially raised by the Council before the General Court. As regards the ground alleging that Venezuela has no interest in bringing proceedings, the Court considers that, since the prohibitions laid down in Articles 2, 3, 6 and 7 of Regulation 2017/2063 are liable to harm the interests, in particular the economic interests, of Venezuela, their annulment is, by itself, capable of procuring an advantage for it. As regards the ground that Venezuela is not directly concerned by the contested provisions, the Court considers that the prohibitions laid down by the articles of Regulation 2017/2063 at issue apply without leaving any discretion to the addressees responsible for implementing them and without requiring the adoption of implementing measures. Since it had already found that those provisions affect the legal situation of Venezuela, the Court rejects that ground.
SOURCE: Monthly Case-law Digest - July 2021
Common foreign and security policy – Restrictive measures taken with regard to the situation in Venezuela – Freezing of funds – Lists of persons, entities and bodies covered by the freezing of funds and economic resources – Inclusion of the applicant’s name on the lists – Retention of the applicant’s name on the lists – Obligation to state reasons – Rights of the defence – Principle of sound administration – Right to effective judicial protection – Error of assessment – Freedom of expression
The Council of the European Union adopted, on 13 November 2017, Decision (CFSP) 2017/2074 and Regulation (EU) 2017/2063 54 concerning restrictive measures in view of the situation in Venezuela characterised by the continuing deterioration of democracy, the rule of law and human rights. Those acts provide, inter alia, for the freezing of funds and economic resources belonging to persons whose actions, policies or activities otherwise undermine democracy or the rule of law in Venezuela.
By Decision (CFSP) 2018/90 and Implementing Regulation 2018/88 of 22 January 2018, 55 the Council included the applicant, Mr Cabello Rondòn, on the lists of persons and entities covered by those acts due to his involvement, as a member of the Constituent Assembly and as the First Vice-President of the United Socialist Party, in undermining democracy and the rule of law in Venezuela, including by using the media to publicly attack and threaten other media and civil society. The applicant lodged, on 16 April 2018, an action for the annulment of those acts and then modified his application so that it also covered Decision 2018/1656 and Implementing Regulation 2018/1653 56 by which the Council had extended the restrictive measures adopted against him by updating, in the grounds justifying those measures, the reference to the role of the applicant, who had become the President of the Constituent Assembly. The General Court dismisses the applicant’s action, holding, inter alia, that the restrictive measures to which he was subject do not infringe his freedom of expression.
Findings of the Court
At the outset, the Court recalls that, in accordance with Articles 21 and 23 TEU, respect for fundamental rights, including the freedom of expression and to information guaranteed by Article 11 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and, by Article 10 of the Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR), is required of all actions of the European Union. In that regard, the Court states that, while the ECHR is not a legal instrument which has been formally incorporated into the EU legal order, the fundamental rights that it recognises form part of EU law, by virtue of Article 6(3) TEU, as general principles.
In addition, it follows from Article 52(3) of the Charter that the rights it contains, which correspond to rights guaranteed by the ECHR, have the same meaning and scope as those laid down by the ECHR. Against that background, the Court recalls that the European Court of Human Rights (‘the ECtHR’) has already held that the freedom of expression is one of the essential foundations of a democratic society. Attaching particular weight to the role played by journalists as ‘watchdogs’ of democracy, the ECtHR recommends ‘the greatest care’ when it is necessary to assess the validity of restrictions on their freedom of expression. It nevertheless finds, a fortiori in the case of audiovisual media, that their right to impart information on issues of general interest is protected on condition that they act in good faith and on an accurate factual basis and provide ‘reliable and precise’ information in accordance with the ethics of journalism. Furthermore, according to the ECtHR, the ECHR allows little scope for restrictions on the freedom of expression in political debate or on issues of general interest.
The principles that it upholds call for strong protection, except in situations where political debate degenerates into a call for violence, hated or intolerance. However, the Court observes that, by contrast with those cases in which the ECtHR developed its case-law, the applicant does not rely on the freedom of expression as a defence against the Venezuelan State, but in order to protect himself against the restrictive measures, which are of a precautionary, rather than penal, nature, which the Council adopted against him. In the first place, as regards the applicant’s status as a journalist, the Court stresses that his weekly television programme, which is the sole evidence of his status as a journalist, appears to be an extension of his political activities. It observes that his media interventions, on which the Council relied in order to justify the contested acts, disclose, inter alia, his political acts.
The Court recalls in that regard that it follows from the case-law of the ECtHR that the principles relating to journalists’ good faith and ethical duties apply equally to other persons who engage in public debate. However, the applicant used the media freely in order to publicly threaten and intimidate the political opposition, other media and civil society. Therefore, the Court finds that the acts of the applicant examined by the Council in its file constitute an incitement to violence, hatred and intolerance such that those acts cannot benefit from the enhanced freedom of expression which protects, in principle, statements made in a political context. Therefore, the Court rejects the applicant’s arguments based on his role as a journalist and relying on the freedom of expression that journalists enjoy. In the second place, after recalling that ‘everyone’ enjoys freedom of expression, the Court observes that the restrictive measures at issue may lead to restrictions on the applicant’s freedom of expression.
The Court notes however that the freedom of expression does not constitute an unfettered prerogative and that its exercise may, under certain conditions, be limited. A restriction on the freedom of expression is permitted only if it is provided for by law, intended to achieve an objective of general interest and is not excessive. The Court finds that those conditions are fulfilled in the present case and therefore holds that the restrictive measures at issue do not infringe the applicant’s freedom of expression.
SOURCE: Monthly Case-law Digest – May 2021
Law governing the institutions – European citizens’ initiative – Trade with territories under military occupation – Refusal of registration – Manifest lack of powers of the Commission – Article 4(2)(b) of Regulation (EU) No 211/2011 – Common commercial policy – Article 207 TFEU – Common foreign and security policy – Article 215 TFEU – Obligation to state reasons – Article 4(3) of Regulation No 211/2011
On 5 July 2019 Mr Tom Moerenhout and six other citizens communicated to the European Commission, in accordance with the regulation on the citizens’ initiative, a proposed citizens’ initiative entitled ‘Ensuring Common Commercial Policy conformity with EU Treaties and compliance with international law’ (‘the proposed ECI’).
In accordance with the requirements laid down in that regulation, 8 the subject matter and the objectives of the proposed initiative, along with the provisions of the Treaties considered relevant by the citizens for the proposed action, were provided. In accordance with its subject matter, the proposed initiative sought the adoption of provisions regulating commercial transactions with an Occupant’s entities based or operating in occupied territories by withholding products originating from there from entering the EU market.
In that regard, the applicants referred to various provisions of the Treaties, the Charter of Fundamental Rights of the European Union, several regulations and Court of Justice judgments, and provisions and sources of international law. By decision of 4 September 2019 (‘the contested decision’), the Commission refused to register the proposed ECI. The reason it gave for that refusal was that a legal act covering the subject matter of the proposed ECI could be adopted only on the basis of Article 215 TFEU, which requires that a decision be adopted which provides for the interruption or reduction, in part or completely, of economic and financial relations with the third country concerned. However, the Commission found that it did not have the power to submit a proposal for a legal act on that basis. By its judgment, delivered in extended composition, the General Court annuls the contested decision because it does not contain enough information to make it possible for the applicants to know the reasons for the refusal to register the proposed ECI and for the General Court to exercise its power of review of the lawfulness of that refusal. That decision does not comply with the duty to state reasons arising from the Treaty and the regulation on the citizens’ initiative. The General Court accordingly explains the extent of the Commission’s duty to state reasons when it refuses to register a proposed ECI which has been submitted under that regulation.
The General Court’s assessment
The General Court notes that the objectives of the regulation on the citizens’ initiative are to reinforce European citizenship, enhance the democratic functioning of the European Union, encourage the participation of citizens in democratic life, and make the European Union more accessible. It states that the attainment of those objectives would be seriously compromised if a decision refusing a proposed ECI does not have a full statement of reasons. Under that regulation, a proposed citizens’ initiative is to be registered by the Commission provided that that proposed initiative does not manifestly fall outside the framework of the Commission’s powers to submit a proposal for a legal act of the European Union for the purpose of implementing the Treaties.
In the present case, the General Court finds that the contested decision does not state sufficient reasons for the Commission’s lack of competence to submit a proposal able to respond to the subject matter and objectives of the proposed ECI. After reiterating the principles of the duty to state reasons for acts of the institutions, the General Court describes the factors which had to be taken into consideration in order for the contested decision to have an sufficient statement of reasons concerning the Commission’s lack of competence for the purpose of the regulation on the citizens’ initiative.
In the first place, the General Court observes that simply referring to Article 215 TFEU, on restrictive measures, does not make it possible to understand why the Commission considered that the proposed action came exclusively within the scope of the Common Foreign and Security Policy (CFSP). The Commission did not explain why it considered that the measure envisaged by the proposed ECI had to be categorised as aiming at an act providing for the interruption or reduction of commercial relations with one or more third countries for the purposes of Article 215(1) TFEU.
In the second place, it observes that the assessment of whether the statement of reasons is sufficient must take account of the relevant context. In their proposed ECI, the applicants referred, explicitly and repeatedly, to the common commercial policy and to provisions relating to that area, such as Article 207 TFEU. In the present case, it was therefore for the Commission to explain the reasons which led it to conclude, implicitly in the contested decision, that the measure aimed at by the proposed ECI, in the light of its subject matter and objectives, did not fall within the scope of the common commercial policy and could not, therefore, be adopted on the basis of Article 207 TFEU. That assessment was of fundamental importance in the Commission decision refusing to register the proposed ECI since, unlike the CFSP, the common commercial policy is an area in which the Commission has the power to draw up a proposal for an EU act on the basis of Article 207 TFEU. In the third place, the General Court states that the adequacy or otherwise of the statement of reasons for the contested decision must also be assessed in the light of the objectives of the provisions of the Treaties 13 and the regulation on the citizens’ initiative, consisting in encouraging the participation of citizens in democratic life and making the European Union more accessible. On account of those objectives, the Commission was obliged to make clear the reasons justifying the refusal to register the proposed ECI. In the absence of a full statement of reasons, the Commission’s objections to the admissibility of the proposed ECI could seriously compromise the possible submission of a new proposed ECI. Consequently, the General Court annuls the contested decision owing to an inadequate statement of reasons.