Contents
Judgment of the General Court (Sixth Chamber)6 June 2018note(Common foreign and security policy — Restrictive measures taken in view of the situation in Ukraine — Freezing of funds — List of persons, entities and bodies subject to the freezing of funds and economic resources — Maintenance of the applicant’s name on the list — Obligation to state reasons — Manifest error of assessment)In Case T‑258/17,Sergej Arbuzov, residing in Kiev (Ukraine), represented by M. Mleziva, lawyer,vCouncil of the European Union, represented by R. Pekař and J.‑P. Hix, acting as Agents,GENERAL COURT (Sixth Chamber),composed of G. Berardis (Rapporteur), President, D. Spielmann and Z. Csehi, Judges,Registrar: M.E. Coulon,gives the following
Judgment
Facts of the case
1The applicant, Mr Sergej Arbuzov, served, in particular, as Governor of the National Bank of Ukraine and as Prime Minister of Ukraine.
2On 5 March 2014, the Council of the European Union adopted, on the basis of Article 29 TEU, Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2014 L 66, p. 26). On the same date, the Council adopted, on the basis of Article 215(2) TFEU, Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2014 L 66, p. 1).
3Recitals 1 and 2 of Decision 2014/119 state the following:(1) On 20 February 2014, the Council condemned in the strongest terms all use of violence in Ukraine. It called for an immediate end to the violence in Ukraine, and full respect for human rights and fundamental freedoms. It called upon the Ukrainian Government to exercise maximum restraint and opposition leaders to distance themselves from those who resort to radical action, including violence.(2) On 3 March 2014, the Council agreed to focus restrictive measures on the freezing and recovery of assets of persons identified as responsible for the misappropriation of Ukrainian State funds and persons responsible for human rights violations, with a view to consolidating and supporting the rule of law and respect for human rights in Ukraine.’
4Article 1(1) and (2) of Decision 2014/119 provides as follows:1. All funds and economic resources belonging to, owned, held or controlled by persons having been identified as responsible for the misappropriation of Ukrainian State funds and persons responsible for human rights violations in Ukraine, and natural or legal persons, entities or bodies associated with them, as listed in the Annex, shall be frozen.2. No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of natural or legal persons, entities or bodies listed in the Annex.’
5The detailed rules governing that freezing of funds are laid down in the subsequent paragraphs of that article.
6In accordance with Decision 2014/119, Regulation No 208/2014 requires the adoption of the restrictive measures at issue and lays down the detailed rules governing those measures in terms which are identical, in essence, to those of that decision.
7The names of the persons covered by the restrictive measures appear on the identical list contained in the Annex to Decision 2014/119 and in Annex I to Regulation No 208/2014 (‘the list at issue’) along with, in particular, the reasons for their inclusion on the list. Initially, the applicant’s name did not appear on the list at issue.
8On 14 April 2014, the Council adopted Implementing Decision 2014/216/CFSP, implementing Decision 2014/119 (OJ 2014 L 111, p. 91), and Implementing Regulation (EU) No 381/2014, implementing Regulation No 208/2014 (OJ 2014 L 111, p. 33).
9By Implementing Decision 2014/216 and Implementing Regulation No 381/2014, the applicant’s name was added to the list, with the identifying information ‘Former Prime Minister of Ukraine’ and the following reason:‘Person subject to investigation in Ukraine for involvement in crimes in connection with the embezzlement of Ukrainian State funds and their illegal transfer outside Ukraine.’
10On 16 June 2014, the applicant brought an action for the annulment of Decision 2014/119, as amended by Implementing Decision 2014/216, in so far as it related to him. That action was registered at the Registry of the Court under number T‑434/14.
11On 29 January 2015, the Council adopted Decision (CFSP) 2015/143, amending Decision 2014/119 (OJ 2015 L 24, p. 16), and Regulation (EU) 2015/138, amending Regulation No 208/2014 (OJ 2015 L 24, p. 1).
12Decision 2015/143 clarified, with effect from 31 January 2015, the criteria for the designation of the persons subject to the freezing of funds and Article 1(1) of Decision 2014/119 was replaced by the following:1.All funds and economic resources belonging to, owned, held or controlled by persons having been identified as responsible for the misappropriation of Ukrainian State funds and persons responsible for human rights violations in Ukraine, and natural or legal persons, entities or bodies associated with them, as listed in the Annex, shall be frozen.For the purpose of this Decision, persons identified as responsible for the misappropriation of Ukrainian State funds include persons subject to investigation by the Ukrainian authorities:(a) for the misappropriation of Ukrainian public funds or assets, or being an accomplice thereto; or(b) for the abuse of office as a public office-holder in order to procure an unjustified advantage for him- or herself or for a third party, and thereby causing a loss to Ukrainian public funds or assets, or being an accomplice thereto.’
13Regulation 2015/138 amended Regulation No 208/2014 in accordance with Decision 2015/143.
14In the context of a review of the situation of the persons whose names appeared on the list at issue, the Council adopted Decision (CFSP) 2015/364 of 5 March 2015, amending Decision 2014/119 (OJ 2015 L 62, p. 25), and Implementing Regulation (EU) 2015/357 of 5 March 2015, implementing Regulation No 208/2014 (OJ 2015 L 62, p. 1) (together ‘the acts of March 2015’).
15Decision 2015/364 amended Article 5 of Decision 2014/119, extending the restrictive measures, with regard to the applicant, until 6 March 2016.
16The acts of March 2015 essentially updated the list at issue. Following the resultant amendments to that list, the applicant’s name remained on it, with the identifying information ‘Former Prime Minister of Ukraine’ and the following new reason:‘Person subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets.’
17By its judgment of 28 January 2016, Arbuzov v Council (T‑434/14, not published, EU:T:2016:46), the Court annulled Decision 2014/119, as amended by Implementing Decision 2014/216, in so far as it covered the applicant.
18On 4 March 2016, following a review of the situation of the persons whose names appeared on the list at issue, the Council adopted Decision (CFSP) 2016/318, amending Decision 2014/119 (OJ 2016 L 60, p. 76), and Implementing Regulation (EU) 2016/311, implementing Regulation No 208/2014 (OJ 2016 L 60, p. 1) (together ‘the acts of March 2016’).
19In particular, Decision 2016/318 amended Article 5 of Decision 2014/119, extending the restrictive measures at issue until 6 March 2017. The reason relating to the applicant, set out in paragraph 16 above, was not amended either by Decision 2016/318 or by Implementing Regulation 2016/311.
20By application lodged at the Registry of the Court on 5 May 2015, the applicant brought an action for annulment of the acts of March 2015, in so far as they relate to him. That action was registered at the Registry of the Court under number T‑221/15. Thereafter, the applicant modified the application, in accordance with Article 86 of the Rules of Procedure of the General Court, in order to also seek the annulment of the acts of March 2016, in so far as they relate to him.
21On 28 April 2016, the applicant submitted a request to the Council concerning, in essence, the decision in terms of Decision 2016/318 to maintain the restrictive measures against him. On the basis of the applicant’s observations, the Council put questions to the Prosecutor General’s Office of Ukraine (‘the PGO’). The PGO’s responses were submitted to the Council on 16 June and 7 July 2016.
22By letter of 4 August 2016, the Council responded to the applicant’s request of 28 April 2016, rejecting his arguments and referring him to the observations submitted in Case T‑221/15. On that occasion, the Council also gave the applicant access to the additional information provided by the PGO.
23On 4 October 2016, the applicant submitted a further request to the Council for a review of the restrictive measures relating to him.
24By letter of 12 December 2016, the Council informed the applicant of its intention to maintain the restrictive measures against him, and provided him with the reasons for its decision, as well as two letters from the PGO — one of 25 July 2016 and another of 16 November 2016. It also invited him to submit any observations which he might have by 13 January 2017 at the latest.
25On 14 December 2016, the applicant made a further request of the Council for a review, which he supplemented by means of a letter of 13 January 2017.
26The Council put an additional question to the PGO. The PGO’s response was submitted to the Council on 11 January 2017. By letter of 27 January 2017, the Council communicated that response to the applicant, stating that he had until 10 February 2017 to make known any observations which he might have in this regard.
27By letter of 7 February 2017, the Council passed on to the applicant the PGO’s letter of 27 January 2017 which it had received in the meantime, containing updated information on the status of the criminal proceedings relating to him, and set a deadline of 13 February 2017 for him to submit any observations which he might have in this regard, which he did by letter of 10 February 2017.
28On 3 March 2017, following a review of the situation of the persons whose names appeared on the list, the Council adopted Decision (CFSP) 2017/381, amending Decision 2014/119 (OJ 2017 L 58, p. 34, ‘the contested decision’), and Implementing Regulation (EU) 2017/374, implementing Regulation No 208/2014 (OJ 2017 L 58, p. 1).
29In particular, the contested decision amended Article 5 of Decision 2014/119, extending the restrictive measures at issue until 6 March 2018. The reason relating to the applicant, set out in paragraph 16 above, was not amended either by the contested decision or by Implementing Regulation 2017/374.
30On 6 March 2017, the Council sent the applicant a letter in which it rejected the arguments which he had put forward, in his letters of 14 December 2016, and 13 January and 10 February 2017, against the renewal of the restrictive measures against him. The Council referred the applicant, in particular, to the documents which it had made available to him in its earlier letters, as well as to its observations submitted in Case T‑221/15. The Council attached a copy of the contested decision to its letter and indicated to the applicant that he had until 1 December 2017 to submit his observations in relation to a possible extension of those measures beyond 6 March 2018.
31By its judgment of 7 July 2017, Arbuzov v Council (T‑221/15, not published, EU:T:2017:478), the Court dismissed the applicant’s action, in respect of the acts of both March 2015 and March 2016.
Procedure and forms of order sought
32By application lodged at the Registry of the Court on 3 May 2017, the applicant brought the present action.
33On 14 July 2017, the Council lodged its defence. On the same date, it also made a reasoned application in accordance with Article 66 of the Rules of Procedure, seeking that the contents of certain documents annexed to its defence not be mentioned in those documents relating to this case to which the public has access.
34By document lodged at the Registry of the Court on 27 July 2017, the applicant submitted new evidence, within the meaning of Article 85 of the Rules of Procedure, relating to the fact that his name had, in the meantime, been removed from the international wanted persons list drawn up by INTERPOL, the International Criminal Police Organization.
35The Council lodged its observations on the new evidence at the Registry of the Court on 25 August 2017.
36As the applicant did not lodge a reply within the period of time which he had been given for that purpose, the written part of the procedure was closed on 28 September 2017.
37On 11 December 2017, the Court (Sixth Chamber) decided to put questions to the parties for written reply, by way of measures of organisation of procedure as provided for in Article 89 of the Rules of Procedure. The parties responded to those questions within the period of time allowed, producing supporting documentation.
38Under Article 106(3) of the Rules of Procedure, if no request for a hearing is submitted by the main parties within 3 weeks of notification of the close of the written part of the procedure, the Court may decide to rule on the action without an oral part of the procedure. In the present case, the Court considered that it had sufficient information available to it from the material in the case file and decided, in the absence of such a request, to rule without an oral part of the procedure.
39The applicant claims that the Court should:– annul the contested decision, in so far as it relates to him;– order the Council to pay the costs.
40The Council contends, in essence, that the Court should:– dismiss the action;– alternatively, if the contested decision is annulled, order that its effects be maintained until the expiry of the period of time allowed for bringing an appeal and, in the event that an appeal is lodged, until the decision ruling on that appeal;– order the applicant to pay the costs.
Law
41In support of its action, the applicant puts forward, in essence, four pleas in law, the first alleging a breach of the obligation to state reasons, the second a breach of the right to be heard, the third a manifest error of assessment and the fourth a breach of the right to property.
First plea in law, alleging a breach of the obligation to state reasons
42By reference to Article 41(2)(c) of the Charter of Fundamental Rights of the European Union (‘the Charter’), the applicant argues, in essence, that the Council could not rely merely on the reason set out in paragraph 16 above to maintain his name on the list at issue by adopting the contested decision.
43The Council challenges the applicant’s arguments.
44In this regard, it should be recalled that, under the second paragraph of Article 296 TFEU, ‘legal acts shall state the reasons on which they are based’.
45Under Article 41(2)(c) of the Charter, which Article 6(1) TEU recognises as having the same legal value as the Treaties, the right to good administration includes the ‘obligation of the administration to give reasons for its decisions’.
46It is settled case-law that the statement of reasons required by the second paragraph of Article 296 TFEU and Article 41(2)(c) of the Charter must be appropriate to the nature of the contested act and to the context in which it was adopted. It must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure, in such a way as to enable the person concerned to ascertain the reasons for the measure and to enable the competent court to exercise its power of review. The obligation to state reasons depends on the circumstances of each case (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 63 and the case-law cited).
47It 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 meets the requirements of the second paragraph of Article 296 TFEU and Article 41(2)(c) of the Charter 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. Accordingly, the reasons given for a measure adversely affecting a person are sufficient if that measure was adopted in a context which was known to that person and which enables him to understand the scope of the measure concerning him. Moreover, the degree of precision of the statement of the reasons for a measure must be weighed against practical realities and the time and technical facilities available for taking the measure (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 64 and the case-law cited).
48In particular, the statement of reasons for an asset-freezing measure cannot, in principle, consist merely of a general, stereotypical formulation. Subject to the qualifications stated in paragraph 47 above, such a measure must, on the contrary, indicate the actual and specific reasons why the Council considers that the relevant legislation is applicable to the person concerned (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 65 and the case-law cited).
49Finally, it must be borne in mind that the obligation to state reasons is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure. The reasoning in a measure consists in a formal statement of the grounds on which it is based. If those grounds are vitiated by errors, the latter will vitiate the substantive legality of the measure, but not the statement of reasons in it, which may be adequate even though it sets out reasons which are incorrect (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 66 and the case-law cited).
50In the present case, it should be noted that the reason given when the applicant’s name was maintained on the list at issue by the contested decision (see paragraph 16 above) is actual and specific and sets out the considerations forming the basis of the decision to so maintain it, namely the fact that he is the subject of criminal proceedings brought by the Ukrainian authorities for the misappropriation of public funds or assets.
51Moreover, the decision to maintain the measures against the applicant was made in a context that was known to him, in that he had, in exchanges with the Council, been informed, in particular, of the PGO’s letters of 25 July and 16 November 2016 and 27 January 2017, as well as of the PGO’s responses to the Council’s questions (see paragraphs 21, 22, 24, 26 and 27 above) (together ‘the new documents from the PGO’), on the basis of which the Council maintained those restrictive measures (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 68 and the case-law cited).
52The new documents from the PGO reveal the investigating authority, the number and commencement date of the relevant criminal proceedings brought against the applicant, the acts of which he is accused, the other persons and bodies concerned, the amount of the public funds alleged to have been misappropriated, the relevant articles of the Ukrainian Criminal Code and the fact that the applicant was informed in writing of the suspicions which existed against him (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 69) and state that the [confidential]note District Court (‘the District Court’) adopted a decision of 15 February 2016 (‘the decision of 15 February 2016’), authorising the PGO to proceed in absentia.
53Consequently, the reason given by the Council cannot be considered to merely reproduce the wording of the designation criteria or to not indicate the actual and specific reasons for the decision to maintain the applicant’s name on the list at issue (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 70).
54As the statement of reasons for the contested decision is adequate with regard to the applicant, the first plea in law must be rejected and the third plea in law must be examined, in order to establish whether the grounds on which the Council relied to maintain the applicant’s name on the list at issue are affected by a manifest error of assessment, as the applicant claims.
Third plea in law, alleging a manifest error of assessment
55The applicant argues, in essence, that when the Council maintained the restrictive measures against him by adopting the contested decision, it committed a manifest error of assessment in relying on the brief summary of his situation prepared by the PGO, without asking for additional information and without examining with due diligence the exculpatory evidence which he had submitted to it.
56The Council argues in response that the contested decision has a sufficiently sound factual basis, consisting, in particular, of the new documents from the PGO.
Preliminary observations
57It should be recalled, on one hand, that the designation criterion provided for in Article 1(1) of Decision 2014/119, as amended by Decision 2015/143 (‘the relevant criterion’), by virtue of which the applicant’s name was maintained on the list at issue by the contested decision, applies to persons who have been ‘identified as responsible’ for acts of misappropriation of public funds — which includes persons ‘subject to investigation by the Ukrainian authorities’ for the misappropriation of Ukrainian public funds or assets — and, on the other, that the relevant criterion must be interpreted as meaning that it does not concern in abstract terms any act classifiable as misappropriation of State funds, but rather acts classifiable as misappropriation of State funds or public assets which are such as to undermine respect for the rule of law in Ukraine (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 97 and the case-law cited).
58The applicant’s name was maintained on the list at issue by the contested decision on the grounds that he was a ‘person subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets’.
59On that basis, it is necessary to determine whether the Council’s decision to maintain the applicant’s name on the list was made impartially and fairly, in view of an assessment of the evidence in its possession, the grounds on which that decision was based and the relevant criterion.
60It should be recalled that, while the Council has a broad discretion with regard to the general criteria to be taken into consideration with a view to the adoption of restrictive measures, the effectiveness of the judicial review guaranteed by Article 47 of the Charter requires that, as part of the review of the lawfulness of the grounds which are the basis of the decision to include or maintain a specific person’s name on a list of persons subject to restrictive measures, the Courts of the European Union ensure that that decision, which affects that person individually, is taken on a sufficiently solid factual basis. That entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that the 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 or are substantiated in a sufficiently precise and concrete manner (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 100 and the case-law cited).
61Moreover, according to the case-law on decisions maintaining a person’s name on a list of persons covered by restrictive measures, when comments are made by the individual or entity concerned on the summary of reasons, the competent European Union authority is under an obligation to examine, carefully and impartially, whether the alleged reasons are well founded, in the light of those comments and any exculpatory evidence provided with those comments. Furthermore, in the context of the adoption of restrictive measures, the Council is under an obligation to observe the principle of good administration, enshrined in Article 41 of the Charter, which, according to settled case-law, entails the obligation for the competent institution to examine, carefully and impartially, all the relevant aspects of the individual case (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 101 and the case-law cited).
62It is also apparent from the case-law that, in order to assess the nature, form and degree of the proof that the Council may be required to provide, it is necessary to take account of the specific nature and scope of the restrictive measures, as well as of their objective (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 102 and the case-law cited).
63As is apparent from recitals 1 and 2 of Decision 2014/119, that decision forms part of a more general EU policy of support for the Ukrainian authorities, intended to promote the political stability of Ukraine. It thus satisfies the objectives of the common foreign and security policy, which are defined, in particular, in Article 21(2)(b) TEU, pursuant to which the European Union is to engage in international cooperation with a view to consolidating and supporting democracy, the rule of law, human rights and the principles of international law (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 103 and the case-law cited).
64It is against that background that the restrictive measures at issue provide for the freezing of the funds and economic resources of, amongst others, persons who have been identified as being responsible for the misappropriation of Ukrainian State funds. The facilitation of the recovery of those funds consolidates and supports the rule of law in Ukraine (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 104).
65It follows that the restrictive measures at issue are not intended to penalise any misconduct in which the persons concerned may have engaged, or to deter them, by coercion, from engaging in such conduct. The sole purpose of those measures is to facilitate the Ukrainian authorities’ identification of any misappropriation of State funds that has taken place and to protect the possibility of the authorities’ recovering misappropriated public funds. They are, therefore, purely precautionary (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 105 and the case-law cited).
66Thus, the restrictive measures at issue, imposed by the Council on the basis of the powers conferred on it by Articles 21 and 29 TEU, have no criminal-law aspect. They cannot, therefore, be treated in the same way as a decision to freeze assets that has been taken by a national judicial authority of a Member State in the relevant criminal proceedings, respecting the safeguards provided by those proceedings. Consequently, the requirements the Council must fulfil with regard to the evidence underpinning the entry of a person’s name on the list of persons whose assets are to be frozen cannot be exactly the same as those which apply to the national judicial authority in the abovementioned case (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 106 and the case-law cited).
67It should also be recalled that the Council is not required to carry out, systematically and on its own initiative, its own investigations or checks for the purpose of obtaining additional information when it already has information provided by the authorities of a third country, in taking restrictive measures against nationals of that country who are subject to judicial proceedings in that country (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 107 and the case-law cited).
68In the present case, the Council must ascertain, first, to what extent the new documents from the PGO, on which it intends to rely, prove that, as indicated by the grounds for including the applicant’s name on the list at issue, referred to in paragraph 58 above, the applicant is subject to criminal proceedings by the Ukrainian authorities in respect of actions that may be characterised as the misappropriation of State funds, and, second, whether those proceedings are such that his actions can be characterised as satisfying the relevant criterion. Only if those investigations were not successful would it, in the light of the case-law referred to in paragraph 61 above, be incumbent on the Council to investigate further (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 108 and the case-law cited).
69Furthermore, in the context of the cooperation governed by the restrictive measures at issue (see paragraph 63 above), it is not, in principle, for the Council itself to examine and assess the accuracy and relevance of the information relied on by the Ukrainian authorities in conducting criminal proceedings in respect of the applicant for conduct that could be characterised as misappropriation of State funds. As explained in paragraph 65 above, in adopting the restrictive measures at issue, the Council does not seek itself to punish the misappropriation of State funds being investigated by the Ukrainian authorities, but to protect the possibility of the authorities’ identifying such misappropriation and recovering the funds thus misappropriated. It is, therefore, for those authorities, in the context of those proceedings, to verify the information on which they are relying and, where appropriate, to draw the appropriate conclusions as regards the outcome of those proceedings (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 109 and the case-law cited).
70That interpretation is confirmed by the case-law to the effect that it is not for the Council to verify whether the investigations to which the person concerned is subject are well founded, but only to verify whether that is the case as regards the decision to freeze funds in the light of those investigations (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 110 and the case-law cited).
71Admittedly, the Council cannot, in all circumstances, adopt the findings of the Ukrainian authorities contained in the documents provided by them. Such conduct would not be consistent with the principle of good administration nor, generally, with the obligation on the part of the EU institutions to respect fundamental rights in the application of EU law, under the combined provisions of the first subparagraph of Article 6(1) TEU and Article 51(1) of the Charter (see judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 111 and the case-law cited).
72However, it is for the Council to assess, on the basis of the circumstances of the case, whether it is necessary to investigate further, in particular to seek the disclosure of additional evidence from the Ukrainian authorities if it transpires that the evidence already supplied is insufficient or inconsistent. Information communicated to the Council, either by the Ukrainian authorities themselves or in some other way, might conceivably lead that institution to doubt the adequacy of the evidence already supplied by those authorities. Furthermore, when availing themselves of the opportunity which the persons concerned must be given to submit their comments on the reasons which the Council intends to use to maintain their names on the list at issue, those persons may submit such information, or even exculpatory evidence, which would require the Council to investigate further. In particular, while it is not for the Council to take the place of the Ukrainian judicial authorities in assessing whether the criminal proceedings mentioned in the PGO’s letters are well founded, it is not inconceivable that, in the light, in particular, of the applicant’s observations, the Council might be obliged to seek clarification from those Ukrainian authorities with regard to the material on which those proceedings are based (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 112 and the case-law cited).
73It is in light of those considerations that it is necessary to examine the applicant’s more specific arguments, which relate, in essence, to the subject of the proceedings relating to him and the progress of those proceedings.
Subject of the criminal proceedings in respect of the applicant
74The applicant, relying on a number of documents, argues that the offence of which he is accused and which forms the basis of the restrictive measures at issue did not cause any loss of funds for the National Bank of Ukraine, and thus for the Ukrainian State. Consequently, no misappropriation of funds can be attributed to the applicant.
75The Council maintains, in essence, that the acts which the applicant is alleged to have committed fall within the concept of ‘the misappropriation of public funds’, regardless of whether it was the applicant or a third party who benefited from that misappropriation. The evidence adduced by the applicant does not demonstrate that the Ukrainian State did not suffer damage as a result of such acts.
76In the present case, it should be noted that the Council’s decision to maintain the restrictive measures against the applicant is based primarily on the PGO’s letters of 25 July and 16 November 2016 and 27 January 2017.
77In the letter of 25 July 2016, the PGO recalls the following:– [confidential];– [confidential];– [confidential];– [confidential];– [confidential];– [confidential].
78In the letter of 16 November 2016, the PGO indicated that there was no additional information concerning the proceedings [confidential].
79In the letter of 27 January 2017, the PGO supplied essentially the same information as that appearing in the letter of 25 July 2016, adding that [confidential] the misappropriation of that sum of money had reduced the ability of the National Bank of Ukraine to ensure the stability of the national currency and had thus caused damage to the Ukrainian State. In its letter, the PGO mentioned the decision of 15 February 2016 and indicated that the pre-trial investigation in question was still pending.
80Moreover, it should be observed that when the Council adopted the contested decision, it also had at its disposal the information which it had received from the PGO in response to its questions.
81Thus, in its responses submitted to the Council on 7 July 2016, firstly, the PGO, in essence, indicated [confidential].
82[confidential].
83[confidential].
84It follows that the decision to maintain the restrictive measures against the applicant was based on evidence which allowed the Council to make an unequivocal finding that proceedings had been initiated by the Ukrainian judicial authorities against the applicant in relation to an offence of misappropriation of public funds.
85It should be observed that, by consulting the new documents from the PGO, the Council had at its disposal the number of the relevant proceedings, their commencement date, the offence of which the applicant was suspected, the corresponding article of the Ukrainian Criminal Code, the relevant factual circumstances and the date on which a notice of suspicions was sent to the applicant. Those documents confirm that those proceedings are being conducted in respect of actions which are described in a sufficiently concrete and precise manner, so that they leave no doubt as to the applicant’s alleged involvement, and all the more so given that the facts describing the offence are consistent and coherent and are classified in law by the Ukrainian authorities as the misappropriation of public funds, which meets the relevant criterion.
86Moreover, the documents communicated to the Council are acts emanating from the PGO, one of Ukraine’s highest judicial authorities. It acts, in that State, as the public prosecutor’s office in the administration of criminal justice and it conducts pre-trial investigations in the context of criminal proceedings in respect of, inter alia, the misappropriation of public funds (see, to that effect, judgment of 19 October 2017, Yanukovych v Council, C‑598/16 P, not published, EU:C:2017:786, paragraph 53). In this regard, the Council cannot, therefore, be criticised for having regarded the information provided by the PGO as correct and substantiated.
87Furthermore, it is important to note that the documents at issue indicate that the applicant is suspected of having committed an economic offence relating to a very large sum of money, [confidential].
88In this regard, it should be noted that the restrictive measures at issue facilitate and complement the efforts made by the Ukrainian authorities to recover the misappropriated public funds, which falls within the objective of consolidating the rule of law, as indicated in paragraphs 64 and 65 above.
89On that point, it is apparent from the PGO’s letter of 25 July 2016 that [confidential], on several occasions during the investigation, the District Court, acting on a proposal from the investigator, adopted protective measures relating to the applicant (see the final indent of paragraph 77 above). Consequently, the decision taken by the Council, to freeze funds throughout the European Union, enhances the effectiveness of the initiative taken at national level.
90Finally, it is also appropriate to observe that the prosecution of economic crimes, such as the misappropriation of public funds, is an important means of combating corruption, and that the fight against corruption constitutes, in the context of the external action of the European Union, a principle falling within the concept of the rule of law. It must further be observed that the offence which the applicant is alleged to have committed has a wider context, in that a significant part of the former Ukrainian leadership is suspected of having committed serious crimes in the management of public resources, thereby seriously threatening the legal and institutional foundations of the country and undermining, inter alia, the principles of legality, prohibition on arbitrary exercise of power by the executive, effective judicial review and equality before the law. It follows that, taken as a whole and taking into consideration the role occupied by the applicant within the former Ukrainian leadership and his position as head of the National Bank of Ukraine at the time of the offence of which he is suspected, the restrictive measures at issue contribute, in an effective manner, to facilitating the prosecution of crimes of misappropriation of public funds that were to the detriment of the Ukrainian institutions and ensure that the Ukrainian authorities can more easily secure restitution of the profits of such misappropriation. That facilitates, in the event that the prosecutions are successful, the punishment, through the courts of law, of alleged acts of corruption committed by members of the former regime, and thereby contributes to the support of the rule of law in that country (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 128 and the case-law cited).
91Thus, in adopting the contested decision, in so far as it relates to the applicant, the Council did not commit a manifest error of assessment with regard to the subject of the criminal proceedings relating to the applicant and the relevance of those proceedings to the relevant criterion.
92The applicant’s arguments seeking to challenge that conclusion cannot succeed.
93Firstly, the notice of suspicions of 18 May 2017, on which the applicant relies as exculpatory evidence, merely confirms that conclusion, in so far as it is apparent from that notice, in essence, that the applicant is suspected of having misappropriated funds by abusing his position as Governor of the National Bank of Ukraine [confidential].
94Secondly, with regard to the claim that the National Bank of Ukraine has not suffered any damage, it should be observed that that argument is unfounded, since it is apparent from a number of new documents from the PGO that the applicant is suspected of having illegally transferred funds for purposes other than those to which they were allocated. Such a finding satisfies the definition of the concept of ‘the misappropriation of public funds’ given by case-law, according to which that concept covers any act consisting in the unlawful use of resources belonging to public authorities, or which are placed under their control, for purposes which run counter to those planned for the resources, in particular for private purposes. To fall within the scope of that concept, that use must have been prejudicial to the financial interests of these authorities, and must, therefore, have caused damage which can be assessed in financial terms (see, to that effect, judgment of 7 July 2017, Arbuzov v Council, T‑221/15, not published, EU:T:2017:478, paragraph 138 and the case-law cited).
95[confidential].
Progress of the criminal proceedings in respect of the applicant
96The applicant emphasises that when the contested decision was adopted, more than a year had passed since the District Court, by the decision of 15 February 2016, had authorised the PGO to proceed in absentia, during which the PGO had, nevertheless, not brought the case to court. According to the applicant, the investigation is being conducted in a purely formal manner, in particular so that the Council can extend the restrictive measures in respect of the applicant for an unlimited period.
97The Council is of the opinion that the duration of the criminal proceedings relating to the applicant does not, in itself, have a direct impact on the question of whether he continues to fulfil the necessary conditions for his name to remain on the list at issue. However, the Council takes the time factor into consideration when it reviews that list and regularly asks the PGO for information on the conduct of ongoing proceedings.
98It is not disputed that, by the decision of 15 February 2016, the District Court authorised the PGO to proceed in absentia with the proceedings [confidential]. It is also not disputed that, more than a year after the adoption of that decision, the Council extended the restrictive measures in respect of the applicant, having been informed by the PGO that those proceedings were still at the pre-trial investigation stage, in so far as the case had not yet been brought before a Ukrainian criminal court.
99First, it should be noted that the reference made by the Council to the fact that proceedings can be delayed by the absence of the person concerned is entirely irrelevant in the present case, given that the decision of 15 February 2016 specifically allowed the PGO to proceed in absentia.
100Second, as is apparent from the documents lodged by the Council in response to a written question from the Court (see paragraph 37 above), during the proceedings before the Council, the applicant raised the issue of the lack of progress in the proceedings [confidential], despite the adoption of the decision of 15 February 2016, which allowed the PGO to proceed in absentia. Thus, firstly, in his letter of 4 October 2016, the applicant suggested that the Council ask the PGO why, if the investigators maintained that they had proved that he was guilty, they had not yet brought the case before a court, when the investigation had been ongoing for nearly 2½ years. Secondly, in his letter of 14 December 2016 to the Council, just after having referred to the existence of the decision of 15 February 2016, the applicant again emphasised the lack of progress in the proceedings in question and argued that the Ukrainian authorities were seeking to keep those proceedings pending for as long as possible, in order to provide the Council with a basis on which to extend the restrictive measures in respect of him. Thirdly, in his letter of 13 January 2017 to the Council, the applicant clearly pointed out that it was very surprising that the PGO had not yet brought the case relating to the proceedings [confidential] before a court, in view, in particular, of the fact that the use of proceedings in absentia had been authorised, albeit unlawfully, in his opinion.
101In light of the applicant’s observations summarised in paragraph 100 above and of the fact that, at the very least since the PGO’s letter of 25 July 2016 (see paragraph 77 above), the Council had been aware of the existence of the decision of 15 February 2016, the Council’s contention that the applicant had not expressed in a sufficiently precise manner his argument based on the lack of progress in the proceedings relating to him, notwithstanding the adoption of that decision, must be rejected.
102In those circumstances, it must be held that the Council should have sought clarification from the Ukrainian authorities as to the possible reasons for the lack of progress in the proceedings [confidential], despite the adoption of the decision of 15 February 2016, as it did with regard to other elements of those proceedings which it did not consider to be sufficiently clear, in particular following the observations submitted by the applicant.
103It follows that the Council failed to fulfil its duty of diligence, given that the applicant’s comments should have raised legitimate questions on its part, justifying its making further enquiries of the Ukrainian authorities.
104In this regard, it should be made clear that the question is not whether, in view of the information communicated to the Council, it was obliged to remove the applicant’s name from the list, but simply whether it was obliged to take that information into account and to investigate further or to seek clarification from the Ukrainian authorities. Consequently, it is sufficient for that information to be, as it is in the present case, such as to raise legitimate questions regarding the conduct of the investigation and the adequacy of the information provided by the PGO.
105It follows from all of the foregoing that the Council committed a manifest error of assessment in taking the view that the applicant’s observations regarding the lack of progress in the proceedings [confidential] did not justify its making further enquiries of the Ukrainian authorities, when those observations were such as to raise legitimate questions as to the adequacy of the information supplied by the PGO with regard to the proceedings [confidential] against the applicant.
106Consequently, the third plea in law must be upheld and the contested decision must be annulled, without it being necessary to rule on the second and fourth pleas in law or on the new evidence (see paragraph 34 above).
107With regard to the Council’s alternative claim, seeking that the effects of the contested decision be maintained until the expiry of the period of time allowed for bringing an appeal and, in the event that an appeal is lodged, until the decision ruling on that appeal, it is sufficient to observe that the contested decision was effective only until 6 March 2018. Consequently, the annulment of that decision by this judgment has no effect on the period after that date, so that it is not necessary to rule on the question of maintaining the effects of that decision (see, to that effect and by analogy, judgment of 28 January 2016, Azarov v Council, T‑331/14, EU:T:2016:49, paragraphs 70 to 72).
Costs
108Under Article 134(1) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Council has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.
Operative part
On those grounds,THE GENERAL COURT (Sixth Chamber)hereby:
1.Annuls Council Decision (CFSP) 2017/381 of 3 March 2017 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, in so far as Mr Sergej Arbuzov’s name was maintained on the list of persons, entities and bodies subject to those restrictive measures;
2.Orders the Council of the European Union to pay the costs.
Delivered in open court in Luxembourg on 6 June 2018.
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