Fahas v Council [2010] EUECJ T-49/07 (07 December 2010)

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(Common foreign and security policy – Restrictive measures with a view to combating terrorism – Freezing of funds – Action for annulment – Right to a fair hearing – Right to effective judicial protection – Statement of reasons – Action for damages)

Sofiane Fahas, residing in Mielkendorf (Germany), represented by F. Zillmer, lawyer,

Council of the European Union, represented initially by M. Bishop, E. Finnegan and S. Marquardt, and subsequently by M. Bishop, J.-P. Hix and E. Finnegan, acting as Agents,

Italian Republic, represented by I. Bruni, acting as Agent, and G. Albenzio, avvocato dello Stato,

1 On 28 September 2001, the United Nations Security Council (‘the Security Council’) adopted Resolution 1373 (2001) adopting strategies to combat, by all means, terrorism and, in particular, the financing of terrorism. Article 1(c) of the resolution provides, in particular, that all States are to freeze, without delay, funds and other financial assets or economic resources of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of such acts, of entities owned or controlled by such persons and of persons and entities acting on behalf of, or on the direction of, such persons and entities.

2 On 27 December 2001, considering that action was necessary on the part of the European Community in order to implement Security Council Resolution 1373 (2001), in accordance with the Member States’ obligations under the United Nations Charter, the Council of the European Union adopted, under Articles 15 EU and 34 EU, Common Position 2001/930/CFSP on combating terrorism (OJ 2001 L 344, p. 90) and Common Position 2001/931/CFSP on the application of specific measures to combat terrorism (OJ 2001 L 344, p. 93).

3 Article 1(1) of Common Position 2001/931 states that the Common Position applies ‘to persons, groups and entities involved in terrorist acts and listed in the Annex’.

4 Article 1(4) of Common Position 2001/931 provides that the list in the Annex is to be drawn up on the basis of precise information or material in the relevant file which indicates that a decision has been taken by a competent authority in respect of the persons, groups and entities concerned, irrespective of whether it concerns the instigation of investigations or prosecution for a terrorist act, an attempt to perpetrate, participate in or facilitate such an act based on ‘serious or credible evidence or clues, or condemnation for such deeds’. ‘Competent authority’ is defined as a judicial authority or, where judicial authorities have no competence in the matter, an equivalent competent authority in that area.

5 Article 1(6) of Common Position 2001/931 provides that the names of persons and entities on the list in the Annex are to be reviewed at regular intervals, at least once every six months, to ensure that there are grounds for keeping them on the list.

6 Under Articles 2 and 3 of Common Position 2001/931, the Community, acting within the limits of the powers conferred on it by the EC Treaty, is to order the freezing of the funds and other financial assets or economic resources of persons, groups and entities listed in the Annex and to ensure that funds, financial assets or economic resources or financial services are not made available for their benefit, directly or indirectly.

7 On 27 December 2001, on the view that a regulation was necessary in order to implement at Community level the measures described in Common Position 2001/931, the Council adopted Regulation No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism (OJ 2001 L 344, p. 70) on the basis of Articles 60 EC, 301 EC and 308 EC. That regulation provides that, except as otherwise permitted, all funds held by a natural or legal person, group or entity included in the list referred to in Article 2(3) thereof are to be frozen. Similarly, it is forbidden to make funds or financial services available to such persons, groups or entities. The Council, acting by unanimity, is to establish, review and amend the list of persons, groups and entities to which the regulation applies, in accordance with the provisions laid down in Article 1(4) to (6) of Common Position 2001/931.

8 The first list of persons, groups and entities to whom and to which Regulation No 2580/2001 applies was established by Council Decision 2001/927/EC of 27 December 2001 establishing the list provided for in Article 2(3) of Regulation No 2580/2001 (OJ 2001 L 344, p. 83).

9 Since that time, the Council has adopted various common positions and decisions updating the lists provided for by Common Position 2001/931 and Regulation No 2580/2001, respectively.

10 The applicant, Mr Sofiane Fahas, is an Algerian national who has lived in the Federal Republic of Germany since 1990 and married a German national on 18 September 2003.

11 The investigating judge of Naples (Italy) issued a provisional warrant for the applicant’s arrest on 9 October 2000. In the warrant, the applicant is accused of participating in a conspiracy with a view to establishing, in Italy, a cell forming part of the ‘Al'Takfir and Al'Hijra’ group (Al Takfir Wal Hijra), which has been operating in Algeria since 1992 and supporting terrorist activities, arms trafficking and falsification of documents for the benefit of terrorist groups in Algeria. By order of 30 May 2008, the Giudice dell’udienza preliminare del Tribunale di Napoli (the examining magistrate of the District Court, Naples) committed the applicant for trial before the Tribunale di Napoli, charged with four criminal offences, including three offences connected with the terrorist organisation in question.

12 By Common Position 2002/976/CFSP of 12 December 2002 updating Common Position 2001/931 and repealing Common Position 2002/84/CFSP (OJ 2002 L 337, p. 93), the Council updated the list of persons, groups and entities to which Common Position 2001/931 applies. The first paragraph of the Annex to Common Position 2002/976 mentions for the first time the name of the applicant, who is identified as follows:

13 Since 12 December 2002, there have been numerous decisions including the name of the applicant in the list referred to in Article 2(3) of Regulation No 2580/2001 (‘the list at issue’) and providing, inter alia, that his funds are to be frozen. It is appropriate to refer to those decisions which have been addressed by the parties to the present proceedings in their pleadings.

14 On 12 December 2002, the Council adopted Decision 2002/974/EC implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2002/848/EC (OJ 2002 L 337, p. 85). In Article 1 of Decision 2002/974, the name of the applicant is included in the list at issue.

15 On 2 April 2004, the Council adopted Common Position 2004/309/CFSP updating Common Position 2001/931 and repealing Common Position 2003/906/CFSP (OJ 2004 L 99, p. 61). The applicant’s name is included in the annexed list. The same day, the Council adopted Decision 2004/306/EC implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2003/902/EC (OJ 2004 L 99, p. 28).

16 The applicant’s name remained in the list at issue in Decision 2006/379/EC of 29 May 2006 implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2005/930/EC (OJ 2006 L 144, p. 21).

17 In Decision 2006/1008/EC of 21 December 2006 implementing Article 2(3) of Regulation No 2580/2001 (OJ 2006 L 379, p. 123, corrigendum OJ 2007 L 150, p. 16), the Council determined that certain other persons, groups and entities should be added to the list at issue established by Decision 2006/379, without repealing that decision. The applicant’s name is not included in Decision 2006/1008.

18 The applicant’s name was once again in the list at issue in Council Decision 2008/583/EC of 15 July 2008 implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2007/868/EC (OJ 2008 L 188, p. 21) (‘the contested decision’).

19 By application lodged at the Court Registry on 20 February 2007, the applicant brought the present action.

20 The action was initially directed against Decision 2002/848 and all the decisions subsequently adopted, including Decision 2006/1008.

21 On 30 March 2007, the applicant remedied the defects which vitiated the application by directing his action solely at Decision 2006/1008.

22 By separate document lodged at the Court Registry on 20 June 2007, the Council raised an objection of inadmissibility, pursuant to Article 114(1) of the Rules of Procedure of the General Court. By order of the President of the Second Chamber of the General Court of 22 September 2007, the decision on the objection of inadmissibility was reserved for the final judgment.

23 On 1 October 2008, the Court asked the applicant, by way of measures of organisation of procedure under Article 64 of the Rules of Procedure, if he intended to amend the pleas in law relied on and the heads of claim, in the light of the adoption of the contested decision. On 17 October 2008, the applicant amended the heads of claim so as to direct his action solely against the contested decision.

24 By document lodged a the Court Registry on 2 April 2009, the Italian Republic sought leave to intervene in the present case in support of the forms of order sought by the Council. By order of 14 May 2009, after hearing the parties, the President of the Second Chamber of the General Court granted the application to intervene, in accordance with Article 116(6) of the Rules of Procedure.

28 The Council claims that the applicant’s application that it be ordered, essentially, not to include his name in any future list for so long as a final judicial decision establishing that he supports terrorism has not been handed down is inadmissible.

29 That application is to be interpreted as an application for directions to be issued to the Council. It should be recalled that, in an action based on Article 230 EC, the Court has no power to issue directions to the institutions (see, to that effect, the order in Case T-56/92 Koelman v Commission [1993] ECR II-1267, paragraph 18, and Joined Cases T-374/94, T-375/94, T-384/94 and T-388/94 European Night Services and Others v Commission [1998] ECR II-3141, paragraph 53).

30 The application for directions to be issued to the Council must therefore be rejected as inadmissible.

Whether the applicant has locus standi to bring an action against the decision initially contested

31 The Council is of the view that the action is inadmissible in so far as concerns the application for annulment of Decision 2006/1008, since, because his name does not appear in the Annex, the applicant is not individually concerned by that decision. According to the Council, Decision 2006/1008 does not repeal Decision 2006/379, but simply adds names to the list established by the latter decision, which remains in force. In its view, the fact that the heads of claim have been amended can have no bearing on the inadmissibility of the initial action.

32 The applicant maintains that the action brought against Decision 2006/1008 is admissible, since it concerns him individually, in spite of the absence of any express mention of his name. The applicant views Decision 2006/1008 as an extension of the list in the Annex to Decision 2006/379.

33 The Council challenges the admissibility of the action brought against Decision 2006/1008 on the ground that the applicant is not referred to in the decision. It is to be noted that Decision 2006/1008 does not expressly mention the applicant’s name. It is therefore necessary to consider whether the applicant is directly and individually concerned by the decision. According to established case'law, persons other than those to whom an act is addressed can claim to be individually concerned within the meaning of the fourth paragraph of Article 230 EC only if the act affects them by reason of certain attributes peculiar to them or by reason of a factual situation which differentiates them from all other persons and thereby distinguishes them individually in the same way as the addressee (Case 25/62 Plaumann v Commission [1963] ECR 95, 107, p. 223)

34 First, it should be noted that Decision 2006/1008 does not repeal Decision 2006/379 but simply adds certain names and entities to the list established by the latter decision.

35 The assessment whether the action brought against Decision 2006/1008 is admissible must be made in the light of two principal considerations. First, the Council is required to review the list at issue at least once every six months, in accordance with Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931. Second, it is apparent from recital 2 in the preamble to Decision 2006/1008 that that decision supplements the list established by Decision 2006/379 but does not repeal that decision. That is a manifestation of the Council’s intention to maintain the applicant in the list at issue, the effect of which is that his funds remain frozen. Since the applicant was referred to in Decision 2006/379, he must also be regarded as being directly and individually concerned by Decision 2006/1008.

36 It follows from the foregoing that the Council’s objection of inadmissibility must be rejected and the action regarded as admissible in so far as it relates to Decision 2006/1008, in accordance with the Othman decision (Case T-318/01 Othman v Council and Commission [2009] ECR II-1627, paragraph 53). The application of 17 October 2008 to amend the heads of claim is therefore also be regarded as admissible and the present action as concerning the lawfulness of the contested decision, as accepted by the parties, formal note of which was taken in the minutes of the hearing.

37 It is appropriate to group the applicant’s complaints into two pleas, namely, first, a plea alleging infringement of his fundamental rights and the obligation to state reasons and, second, a plea alleging an error of assessment and misuse of power by the Council.

The first plea, alleging infringement of fundamental rights and the obligation to state reasons

38 The applicant considers that the purpose of safeguarding the right to a fair hearing is to ensure the due exercise of the right to effective judicial protection. Regulation No 2580/2001 and Common Position 2001/931, to which that regulation refers, do not lay down any procedure for the communication of the contested decision or the incriminating evidence which led to the applicant’s name being included in the list at issue. Nor does that regulation afford the party concerned an opportunity to be heard, before or after a decision is adopted, which could result in his name being removed from the list at issue. According to the applicant, at no time, therefore, was he given the opportunity to present his defence concerning the inclusion of his name of the list at issue. The applicant is of the view that, by freezing his funds, the contested decision imposed economic and financial sanctions on him. According to established case'law of the Court of Justice, the right to a fair hearing is a fundamental principle of Community law which must be ensured at all times.

39 Security Council Resolution 1373 (2001) does not lay down any procedure to enable measures freezing funds to be contested. It is for the Member States of the United Nations to identify specifically the persons, groups or entities whose funds are to be frozen in accordance with that resolution. Since the Community is required to make a discretionary assessment, the Community institutions concerned are in principle bound to observe the right to a fair hearing of the parties concerned (Case T-228/02 Organisation des Modjahedines du peuple d’Iran v Council [2006] ECR II-4665 (‘OMPI’), paragraphs 101 et seq.).

40 Moreover, the adoption of a decision implementing Article 2(3) of Regulation No 2580/2001 infringes the applicant’s right to effective judicial protection of the rights conferred on him by Community law. The specific grounds justifying the inclusion of his name in the list at issue were not communicated to him and he was thus prevented from properly preparing his case before the Court.

41 The applicant relies on Article 253 EC, which requires the Council to state the reasons on which the measures it adopts are based. No reasons are given for the contested decision. It is settled case-law that the purpose of the obligation to state the reasons on which acts adversely affecting an individual are based is to provide that person with sufficient information. Such a person should be able to ascertain whether the decision is well founded or whether it is vitiated by a defect. It is the only means available to the person concerned to determine whether he can contest the legality of the decision before the Community judicature and, for the latter, to review the legality of the decision (Case C-199/99 P Corus UK v Commission [2003] ECR I-11177, paragraph 145). Moreover, the applicant was not notified of the act adversely affecting him. Lastly, the applicant is of the view that the reference made by the Council to the fact that he was the subject of criminal proceedings instigated in Italy does not constitute a sufficient statement of reasons.

42 As a precautionary measure, the applicant claims that the reference to Article 2(3) of Regulation No 2580/2001 and Article 1(4) and (6) of Common Position 2001/931 does not constitute a sufficient statement of reasons for the contested decision.

43 In his reply to a written question put by the Court, the applicant alleges infringement of the general principles of Community law deriving from the right to a fair hearing, the right to an impartial tribunal, the principle of presumption of innocence and the right to property, which are protected by the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed at Rome on 4 November 1950 (‘the ECHR’), without elaborating further. Lastly, in the reply, the applicant points out that he is prohibited from working.

44 The Council, supported by the intervener, takes issue with all the arguments raised by the applicant in support of the first plea.

45 According to established case'law, fundamental rights form an integral part of the general principles of law whose observance the Community judicature ensures. For that purpose, the Court of Justice and the General Court draw inspiration from the constitutional traditions common to the Member States and from the guidelines supplied by international instruments for the protection of human rights on which the Member States have collaborated or to which they are signatories. In that regard, the ECHR has special significance (see Case C-305/05 Ordre des barreaux francophones et germanophone and Others [2007] ECR I-5305, paragraph 29 and the case'law cited).

46 It is also established case'law that respect for human rights is a condition of the lawfulness of Community acts (Opinion 2/94 of the Court [1996] ECR I-1759, paragraph 34) and measures which are incompatible with observance of those rights are not acceptable in the Community (see Case C-112/00 Schmidberger [2003] ECR I-5659, paragraph 73 and the case'law cited).

47 As regards observance of the right to a fair hearing, it is established case'law that, in all proceedings initiated against a person which are liable to culminate in a measure adversely affecting that person, observance of that right is a fundamental principle of Community law which must be guaranteed even in the absence of any rules governing the procedure in question. That principle requires that any person on whom a penalty may be imposed must be placed in a position in which he can effectively make known his view of the evidence adduced (see OMPI, paragraph 91 and the case'law cited).

48 Where a decision is taken to freeze funds, the general principle of observance of the right to a fair hearing requires, unless precluded by overriding considerations concerning the security of the Community or its Member States, or the conduct of their international relations, that the evidence adduced against the party concerned should be notified to it, in so far as possible, either concomitantly with or as soon as possible after the adoption of an initial decision to freeze funds. Subject to the same reservations, any subsequent decision to freeze funds must, in principle, be preceded by notification of any new evidence adduced and a hearing (OMPI, paragraph 137).

49 In the present case, a statement of reasons was sent to the applicant by the Council on 3 January 2008, following the adoption of Council Decision 2007/868/EC implementing Article 2(3) of Regulation No 2580/2001and repealing Decision 2007/445/EC (OJ 2007 340, p. 100), the wording of which was identical to that of earlier decisions mentioning his name. The applicant submitted his comments in a letter of 14 March 2008. The Council considered the content of that letter before deciding to retain the applicant’s name in the list at issue in the contested decision. In the letter sent to the applicant on 15 July 2008, which enclosed both the contested decision and a statement of reasons which was identical to those for earlier decisions mentioning his name, the Council stated that, after considering the applicant’s letter of 14 March 2008, it had come to the view that there was no new evidence on the file to justify a change in its position and that the statement of reasons previously notified to the applicant remained valid. It follows that, as regards the right to be heard, the Council gave the applicant the opportunity to submit his comments on the statement of reasons.

50 It follows from the foregoing that the claim alleging infringement of the applicant’s right to a fair hearing, in particular the right to be heard, must be rejected.

51 As regards the infringement of the obligation to state reasons alleged by the applicant, that obligation is the corollary to the principle of observance of the right to a fair hearing. It should be recalled that the purpose of the obligation to state the reasons on which a measure adversely affecting an individual is based is, first, to provide that person with sufficient information to make it possible to ascertain whether the measure is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the Community judicature and, second, to enable the judicature to review the legality of the measure (Corus UK v Commission, paragraph 145, and Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I-5425, paragraph 462).

52 The purpose of the safeguard relating to the obligation to state reasons, in the context of the adoption of a decision to freeze funds taken pursuant to Article 2(3) of Regulation No 2580/2001, and the limitations of that safeguard which may lawfully be applied to the persons concerned, in such a context, have been defined by the Court in OMPI (paragraphs 138 to 151).

53 It follows in particular from paragraphs 143 to 146 and 151 of the judgment in OMPI that both the statement of reasons for an initial decision to freeze funds and the statement of reasons for subsequent decisions must refer not only to the legal conditions of application of Regulation No 2580/2001, in particular the existence of a national decision taken by a competent authority, but also to the actual and specific reasons why the Council considers, in the exercise of its discretion, that the person concerned must be made the subject of a measure freezing funds.

54 Furthermore, it is clear from both paragraph 145 of OMPI and Article 1(6) of Common Position 2001/931, to which Article 2(3) of Regulation No 2580/2001 also refers, that, while subsequent decisions to freeze funds must be preceded by ‘review’ of the situation of the person concerned, that is in order to ascertain whether continuing to include that person in the list at issue ‘remains justified’, where appropriate on the basis of new information or evidence.

55 In this regard, the Court has, however, stated that, where the grounds of a subsequent decision to freeze funds are in essence the same as those already relied on when a previous decision was adopted, a mere statement to that effect may suffice, particularly where the person concerned is a group or entity (Case T-341/07 Sison v Council [2009] ECR I-3625, paragraph 62 and the case'law cited).

56 In the present case, it is apparent from the statement of reasons accompanying the letter of notification of the contested decision that the applicant’s name was included in the list at issue because the investigating judge of Naples issued a provisional warrant for his arrest on 9 October 2000. The applicant is charged with participating in a conspiracy with a view to establishing, in Italy, a cell forming part of the ‘Al Takfir and Al Hijra’ group (Al Takfir Wal Hijra), which has been operating in Algeria since 1992 and supporting terrorist activities, arms trafficking and falsification of documents for the benefit of terrorist groups in Algeria. That judicial investigation was under way in Italy, which justified the inclusion of the applicant’s name in the list at issue, which was annexed to Common Position 2001/931.

57 As to the remainder, it must be recalled that the Council enjoys broad discretion with regard to the matters to be taken into consideration for the purpose of adopting or of maintaining in force a measure freezing funds. In those circumstances, the Council cannot be required to state with greater precision in what way freezing the applicant’s funds may in concrete terms contribute to the fight against terrorism or to produce evidence to show that the applicant might use his funds to commit or facilitate acts of terrorism in the future (OMPI, paragraph 159, and Sison v Council, paragraphs 65 and 66).

58 Having regard to those factual elements, the claim alleging infringement of the obligation to state reasons must be rejected.

59 Moreover, the applicant claims that he did not enjoy effective judicial protection. According to established case'law, the principle of effective judicial protection is a general principle of Community law stemming from the constitutional traditions common to the Member States, which has been enshrined in Articles 6 and 13 of the ECHR and has also been reaffirmed by Article 47 of the Charter of fundamental rights of the European Union, proclaimed on 7 December 2000 at Nice (OJ 2000 C 364, p. 1) (Case C-432/05 Unibet [2007] ECR I-2271, paragraph 37).

60 Furthermore, in the light of the case'law of the Court of Justice in other fields (Case 222/86 Heylens and Others [1987] ECR 4097, paragraph 15, and Dansk Rørindustri and Others v Commission, paragraphs 462 and 463), it must be concluded in the present case that if judicial review – which must be able to have regard, in particular, to the legality of the grounds on which, in the circumstances of the case, the decision to include the name of a person or entity in the list annexed to Common Position 2001/931 is based, that decision entailing a series of restrictive measures being imposed on the person concerned – is to be effective, the Community authority in question must communicate those grounds to the person or entity concerned, so far as possible, either when that inclusion is decided on or, at the very least, as swiftly as possible after that decision, in order to enable its addressees to exercise, within the periods prescribed, their right to bring an action. As regards subsequent decisions to freeze funds adopted by the Council in the context of the review conducted at regular intervals, at least every six months, of the justification for maintaining the parties concerned in the disputed list, required under Article 1(6) of Common Position 2001/931, it is no longer necessary to ensure a surprise effect in order to guarantee the effectiveness of the sanctions. Any subsequent decision to freeze funds must therefore be preceded by the possibility of a further hearing and, where appropriate, notification of any new evidence (OMPI, paragraph 131; see also in that regard Joined Cases C-402/05 P and C-415/05 P Kadi and Al Barakaat International Foundation v Council and Commission [2008] ECR I-6351, paragraph 338, and Case T-47/03 Sison v Council [2007], not published in the ECR, paragraphs 212 and 213).

61 It is clear from paragraphs 55 and 56 above that the applicant received the contested decision and a statement of case by letter the same day on which that decision was adopted. The Council thereby enabled the applicant to defend his rights and to decide, with full knowledge of the relevant facts, whether it was appropriate to refer the matter to the Community judicature and to put the latter fully in a position to enable it to carry out its review of the lawfulness of the contested decision.

62 It follows from the foregoing that, in the circumstances, the claim alleging infringement of the right to effective judicial protection must be rejected.

63 It should be noted that the principle of presumption of innocence enshrined in Article 6(2) of the ECHR and Article 48(1) of the Charter of Fundamental Right of the European Union is a fundamental right which confers rights on individuals which are enforced by the Community judicature (Case T-193/04 Tillack v Commission [2006] ECR II-3995, paragraph 121, and Case T-474/04 Pergan Hilfsstoffe für industrielle Prozesse v Commission [2007] ECR II-4225, paragraph 75).

64 Observance of the presumption of innocence requires that any person charged with a criminal offence is to be presumed innocent until proved guilty according to law. However, that principle does not preclude the adoption of precautionary measures which do not constitute sanctions or prejudge in any way the innocence or guilt of the person at whom those measures are directed. Such precautionary measures must, inter alia, be laid down by law, be adopted by a competent authority and be limited in time (see, to that effect, judgment in Joined Cases T-37/07 and T-323/07 El Morabit v Council [2009], not published in the ECR, paragraph 40).

65 Article 2 of Common Position 2001/931 provides that the Community is to order the freezing of funds of the persons, groups and entities in the list provided for by Article 1(4) thereof. On that basis, the freezing of funds to which the applicant is subject is provided for by Community law.

66 In accordance with Article 1(6) of Common Position 2001/931, the Council is required to review the list at regular intervals, at least every six months, in order to ensure that there are grounds for keeping the names of the persons and entities in question in the list. On that basis, the freezing of funds to which the applicant is subject was adopted by a competent authority and is limited in time.

67 Moreover, the restrictive measures in question adopted by the Council with a view to combating terrorism do not entail confiscation of the assets of the persons concerned as the proceeds of crime but a freezing of such assets as a precautionary measure. Such measures do not therefore constitute criminal sanctions and, what is more, do not imply any accusation of a criminal nature (see, to that effect, Case T-47/03 Sison v Council, paragraph 101).

68 The Council’s decision, which is the result of, inter alia, the decision of a competent national authority, does not constitute a finding that a criminal offence has in fact been committed but is adopted within the framework and for the purpose of an administrative procedure which has a precautionary function and the sole purpose of which is to enable the Council to combat the funding of terrorism in an effective manner.

69 In that connection, it should be noted that, in a case of application of Article 1(4) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001, provisions which introduce a specific form of cooperation between the Council and the Member States in the context of combating terrorism, that principle entails, for the Council, the obligation to defer as far as possible to the assessment conducted by the competent national authority, at least where it is a judicial authority, in respect of, inter alia, the issue of whether there are ‘serious and credible evidence or clues’ on which its decision is based (OMPI, paragraph 124).

70 It is apparent from the facts of the case that the Council acted in accordance with Article 1(4) of Common Position 2001/931 and Regulation 2580/2001. By justifying its action by reference to a decision of an investigating judge of a Member State and informing the applicant, by the letter of 15 July 2008, of the grounds for including him in the list at issue, the Council fulfilled its obligations under Community law.

71 It follows from the foregoing that, in the present case, the claim alleging infringement of the principle of presumption of innocence must be rejected.

72 With regard to the claim alleging infringement of the right to an impartial tribunal and the right to a fair hearing, the applicant has failed to adduce sufficient evidence to substantiate his arguments. Those claims must be rejected on the basis of Article 44(1)(c) of the Rules of Procedure of the General Court. In any event, it should be noted that the General Court does not have the power to review compliance with national criminal procedure. Such review may be carried out only by the Italian authorities or, if the party concerned brings an action, the competent national court. Likewise, in principle, it is not for the Council to decide whether the proceedings opened against the party concerned and resulting in such a decision, as provided for by the law of the relevant Member State, were conducted correctly, or whether the fundamental rights of the party concerned were observed by the national authorities. That power belongs exclusively to the competent national courts or, as the case may be, to the European Court of Human Rights (see OMPI, paragraph 121, and, by analogy, Case T-353/00 Le Pen v Parliament [2003] ECR II-1729, paragraph 91, upheld on appeal in Case C-208/03 P Le Pen v Parliament [2005] ECR I-6051).

73 As regards the restrictions on the right to property and the right to carry on an economic activity alleged by the applicant, it should be observed that, according to settled case'law, fundamental rights are not absolute and their exercise may be subject to restrictions justified by objectives of public interest pursued by the Community. Accordingly, any restrictive economic or financial measure has, by definition, consequences which affect the right to property and the freedom to pursue a trade or business, thereby causing harm, in particular to the entities carrying on the activities which the restrictive measures in question are intended to prevent. The importance of the aims pursued by the legislation at issue is such as to justify negative consequences, even of a substantial nature, for some operators (see, to that effect, Case C-84/95 Bosphorus [1996] ECR I-3953, paragraphs 21 to 23, and Kadi and Al Barakaat International Foundation v Council and Commission, paragraphs 355 and 361).

74 In the present case, the applicant’s freedom to carry on an economic activity and his right to property are restricted to a considerable degree as a result of the adoption of the contested decision, since he cannot dispose of his funds situated within the Community, unless given special authorisation. However, given the prime importance of the preservation of international peace and security, the difficulties caused are not excessive or disproportionate to the ends sought, especially since Article 5 of Regulation No 2580/2001 provides for certain exceptions which enable the persons affected by measures freezing funds to cover essential expenses (see, to that effect, El Morabit v Council, paragraph 62).

75 It follows from the foregoing that the plea alleging infringement of fundamental rights and of the obligation to state reasons must be rejected.

76 According to the applicant, the Council’s reference to the legal proceedings in Italy, suspended since 2001, is not a sufficient justification for keeping his name in the list at issue. He considers that those proceedings have been terminated and that he has been proved innocent.

77 The applicant therefore alleges an error of assessment, as regards his involvement in terrorist activities, and misuse of power on the part of the Council.

78 The Council, supported by the intervener, disputes all the arguments raised by the applicant in support of the second plea.

79 With regard to the error of assessment alleged by the applicant, as the Court stated at paragraphs 115 and 116 of the judgment in OMPI, the elements of fact and law liable to determine whether a measure freezing funds can be applied to a person, group or entity are laid down in Article 2(3) of Regulation No 2580/2001.

80 In the present case, the relevant rules are laid down in Article 2(3) of Regulation No 2580/2001, according to which the Council, acting by unanimity, is to establish, review and amend the list of persons, groups and entities to which that regulation applies, in accordance with the provisions laid down in Article 1(4) to (6) of Common Position 2001/931. Thus, in accordance with Article 1(4) of Common Position 2001/931, the list is to be drawn up on the basis of precise information or material in the relevant file which indicates that a decision has been taken by a competent authority in respect of the persons, groups and entities concerned, irrespective of whether it concerns the instigation of investigations or prosecution for a terrorist act, an attempt to perpetrate, participate in or facilitate such an act based on ‘serious and credible evidence or clues, or condemnation for such deeds’. ‘Competent authority’ is understood to mean a judicial authority, or, where judicial authorities have no jurisdiction in the relevant area, an equivalent competent authority in that area. Moreover, the names of persons and entities in the list are to be reviewed at regular intervals, at least once every six months, to ensure that there are grounds for keeping them in the list, as provided for by Article 1(6) of Common Position 2001/931 (OMPI, paragraph 116).

81 At paragraph 117 of OMPI and paragraph 131 of the judgment in Case T-256/07 People’s Mojahedin Organization of Iran v Council [2008] ECR II-3019 (‘PMOI’), the Court inferred from those provisions that the procedure which may culminate in a measure to freeze funds under the relevant rules takes place at two levels, one national, the other Community. In the first phase, a competent national authority, in principle judicial, must take in respect of the party concerned a decision complying with the definition in Article 1(4) of Common Position 2001/931. If it is a decision to instigate investigations or to prosecute, it must be based on ‘serious and credible evidence or clues’. In the second phase, the Council, acting by unanimity, must decide to include the party concerned in the disputed list, on the basis of precise information or material in the relevant file which indicates that such a decision has been taken. Next, the Council must, at regular intervals, and at least once every six months, ensure that there are grounds for keeping the party concerned in the list. Verification that there is a decision of a national authority meeting that definition is an essential precondition for the adoption, by the Council, of an initial decision to freeze funds, whereas verification of the consequences of that decision at national level is imperative in the context of the adoption of a subsequent decision to freeze funds.

82 As the Court ruled in paragraph 134 of PMOI, although it is indeed for the Council to prove that freezing of the funds of a person, group or entity is or remains legally justified, in the light of the relevant legislation, that burden of proof has a relatively limited purpose in respect of the Community procedure for freezing funds. In the case of a subsequent decision to freeze funds, after review, the burden of proof essentially relates to whether the freezing of funds remains justified, having regard to all the relevant circumstances of the case and, most particularly, to the action taken following that decision of the competent national authority.

83 As regards the review carried out by the Court, it was recognised, at paragraph 159 of OMPI, that the Council enjoys broad discretion in its assessment of the matters to be taken into consideration for the purpose of adopting economic and financial sanctions on the basis of Articles 60 EC, 301 EC and 308 EC, consistent with a common position adopted on the basis of the Common foreign and security policy. That discretion concerns, in particular, the assessment of the considerations of appropriateness on which such decisions are based. However, although the Court acknowledges that the Council possesses some latitude in that sphere, that does not mean that the Court is not to review the interpretation made by the Council of the relevant facts. The Community judicature must not only establish whether the evidence relied on is factually accurate, reliable and consistent, but must also ascertain whether that evidence contains all the relevant information to be taken into account in order to assess the situation and whether it is capable of substantiating the conclusions drawn from it. However, when conducting such a review, it must not substitute its own assessment of what is appropriate for that of the Council (PMOI, paragraph 138; see also, by analogy, Case C-525/04 P Spain v Lenzing [2007] ECR I-9947, paragraph 57 and the case-law cited).

84 It follows that it is necessary to examine whether the decision of the investigating judge of Naples satisfies the conditions laid down in Article 1(4) of Common Position 2001/931. Under that provision, the Council must decide whether a person, group or entity is to be included on the list ‘on the basis of precise information or material in the relevant file which indicates that a decision has been taken by a competent authority in respect of the persons, groups and entities concerned, irrespective of whether it concerns the instigation of investigations or prosecution for a terrorist act, an attempt to perpetrate, participate in or facilitate such an act based on “serious and credible evidence or clues, or condemnation for such deeds”. … For the purposes of this paragraph “competent authority” shall mean a judicial authority, or, where judicial authorities have no competence in the area covered by this paragraph, an equivalent competent authority in that area’.

85 In the present case, a judicial authority of a Member State, namely the investigating judge of Naples, issued a provisional warrant for the arrest of the applicant, charged with participation in terrorist activities within the meaning of Article 1(3) of Common Position 2001/9361.

86 In that regard, it should be recalled that, in a case of application of Article 1(4) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001, provisions which introduce a specific form of cooperation between the Council and the Member States in the context of combating terrorism, that principle entails, for the Council, the obligation to defer as far as possible to the assessment conducted by the competent national authority, at least where it is a judicial authority, in respect of, inter alia, the issue of whether there are ‘serious and credible evidence or clues’ on which its decision is based (OMPI, paragraph 124).

87 It is clear from the facts of the case that the Council acted in accordance with Article 1(4) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001. By justifying its action by reference to a decision adopted by a national judge and informing the applicant, by its letter of 15 July 2008, of the grounds for including his name in the list at issue, the Council complied with its obligations under Community law. The claim alleging an error of assessment must therefore be rejected.

88 As regards the claim alleging misuse of power, the applicant has failed to adduce any specific evidence to substantiate that claim or to demonstrate that, in adopting the contested decision, the Council used its powers for a purpose other than that for which they were conferred on it (see, to that effect, Case 817/79 Buyl and Others v Commission [1982] ECR 245, paragraph 28). In any event, it follows from all the foregoing considerations that the Council acted within the framework of the competences and powers conferred on it by the Treaty and relevant European Union legislation, so that the claim alleging misuse of power must be rejected.

90 With regard to the claim for damages, the applicant considers that he has suffered considerable harm to his career and personal harm as a result of the inclusion of his name in the list at issue. He and his wife have suffered from ‘stigmatisation’, which has harmed his private and social life. He can no longer obtain a visa or work in Germany. Given that no specific allegation has been made against him, it is not possible for him to defend himself. The applicant therefore claims compensation for non'material damage, in an amount to be assessed at the discretion of the Court. He considers EUR 2 000 to be the minimum appropriate amount.

91 The Council takes the view that the claim for damages is inadmissible in the absence of any adequate reasoning in support of the claim. In the alternative, the Council, supported by the intervener, disputes all the arguments raised by the applicant in support of his claim for damages.

92 It is appropriate to examine, first, whether the claim for damages is well founded. According to established case'law, in order for the Community to incur non'contractual liability under the second paragraph of Article 288 EC for unlawful conduct on the part of its institutions, a number of conditions must be satisfied: the institutions’ conduct must be unlawful, actual damage must have been suffered and there must be a causal link between the conduct and the damage pleaded (see Case T-69/00 FIAMM and FIAMM Technologies v Council and Commission [2005] ECR II-5393, paragraph 85 and the case'law cited).

93 Since those three conditions for the incurring of liability are cumulative, failure to meet one of them is sufficient for an action for damages to be dismissed, without it being necessary to examine the other conditions (see Case T-226/01 CAS Succhi di Frutta v Commission [2006] ECR II-2763, paragraph 27 and the case'law cited).

94 In the present case, all the arguments relied on by the applicant in order to demonstrate that the contested decision is unlawful have been examined and rejected. The European Union cannot therefore incur liability on the basis of a claim that that decision is unlawful.

95 Accordingly, without there being any need to examine the objection of inadmissibility raised by the Council, the applicant’s claim for damages must be rejected in any event as unfounded.

96 It follows from all the foregoing considerations that the action must be dismissed in its entirety.

97 Under Article 87(2) 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. Since the applicant has been unsuccessful, he must be ordered to pay the costs in accordance with the form of order sought by the Council.

98 Under the first subparagraph of Article 87(4) of the Rules of Procedure, Member States intervening in the proceedings are to bear their own costs. The Italian Republic must therefore be ordered to bear its own costs.

2. Orders Mr Sofiane Fahas, in addition to bearing his own costs, to pay those incurred by the Council of the European Union.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Fahas v Council [2010] EUECJ T-49/07 (07 December 2010) URL: http://www.bailii.org/eu/cases/EUECJ/2010/T4907.html Cite as: [2010] EUECJ T-49/7, [2010] EUECJ T-49/07

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