The EU can adopt restrictive measures – popularly known as sanctions – in three different situations. It implements all sanctions imposed by the UN; it may reinforce UN sanctions by applying stricter and additional measures, and third, the EU may decide to impose autonomous sanctions in other cases. Sanctions may include travel bans, asset freezes and export bans, for instance. They may target governments of third countries, non-state entities or private individuals such as terrorist groups or terrorists. All sanctions must be subject to due process and the EU must provide evidence to explain why the specific person is the subject of sanctions.
Challenges to sanctions: some statistics
Adopted under the Common Foreign and Security Policy (CFSP), sanctions may be challenged before the General Court of the EU. In 2011, 93 such applications were made, in 2012 – 59, and in 2013 – 41. In total on 31 December 2013 there were 107 cases regarding restrictive measures pending at the General Court. The majority of these challenges concern autonomous sanctions (about 40% of the individual listings).
While the proceedings may take on average about two years, only a few applications for interim measures – i.e. to (part)-suspend the sanctions until a judgment is delivered – are made and granted. In 2012, four new applications for interim measures were brought, and six applications were concluded (two removed from the registry and four dismissed). In 2013, three new applications were introduced while three were dismissed.
Applicants are increasingly bringing actions in Member States’ courts rather than before the General Court. This is because the process in the EU Courts may be very long, and the EU Courts do not tend to grant either interim measures or damages.
Evidence the Court requires to uphold sanctions: recent case law
Two recent cases underline the requirement that the EU institutions have to provide enough evidence for the addressees of the sanctions to be able to challenge them and for the Courts to review them.
Bank Mellat (Iran)
In 2013, the General Court delivered its judgment in the Bank Mellat case. The Bank had been subject to an asset freeze on the basis of its alleged links to nuclear proliferation. The Court annulled the placing of Bank Mellat on the EU asset-freeze list, ruling that unless there are compelling reasons touching on the security of the European Union or of its Member States, or the conduct of their international relations, which prevent the disclosure of certain information, the Council is obliged to inform the entity covered by the restrictive measure of the actual and specific reasons why it considers that those measures had to be adopted. The Court decided that some of the reasons cited for applying sanctions to Bank Mellat were excessively vague and did not give details of the alleged actions or of the entities and transactions concerned. As a result, the Court ruled that the EU had not provided evidence that the Bank was linked to Iran’s nuclear programme or was state owned. The Council has appealed the case to the Court of Justice of the European Union (CJEU).
Mr Kadi had been included in a UN sanctions list for allegedly financing al Qaeda. In 2013 the CJEU decided that the EU had not provided enough evidence to prove its allegations and had violated Mr Kadi’s right to property, a fair hearing and an independent judicial review, thus confirming the judgment of the General Court. The General Court had concluded that the summary sent to Mr Kadi contained general, unsubstantiated, vague and non-particular allegations therefore infringing his rights of defence.
The two rulings combined lead to a higher threshold regarding the evidence to be submitted and the obligation to inform the entities concerned by the restrictive measures. Some fear that the recent developments in case law and the increasing risk of a high damages award might reduce the EU’s will to adopt restrictive measures. More than 100 lawsuits have been launched against restrictive measures. However, in the light of the recent case law, Article 105 of the new Draft rules of procedure of the General Court currently in preparation will introduce a procedure allowing the EU institutions to rely on undisclosed evidence.
Sanctions as an EU foreign policy instrument / Gisela Grieger, 22.05.2013.
Being Bound / Niamh Nic Shuibhne, E.L.Rev. 2013, 38 (4), 435-436, available via Westlaw.