Summaries of judgments: Fridman and Others v Council and T-644/22 – Cyber Tech

Summaries of judgments made in collaboration with the Portuguese judges and référendaire of the Common Court docket (Maria José Costeira, Ricardo Silva Passos and Esperança Mealha)

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Judgment of the Common Court docket (Eighth Chamber, Prolonged Composition) 17 July 2024, Circumstances T-635/22 | Fridman and Others v Council and T-644/22 | Timchenko and Timchenko v Council

Widespread international and safety coverage – Restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine – Freezing of funds – Obligation to report funds or financial assets belonging to or owned, held or managed by the candidates – Obligation to cooperate with the competent nationwide authority – Participation in actions the item or impact of which is to avoid restrictive measures – Article 9(2) and (3) of Regulation (EU) No 269/2014.

Details

In view of the rising complexity of sanction evasion schemes, on 21 July 2022 the Council adopted a regulation laying down obligations to report funds and to cooperate with the competent authorities. Failure to adjust to these obligations is handled as a circumvention of fund-freezing measures. In sensible phrases, the purpose is to forestall use being fabricated from complicated authorized and monetary preparations able to making it, if not simpler to avoid measures, then a minimum of tougher for the competent nationwide authorities to determine the funds or financial assets topic to restrictive measures.

The events involved introduced actions earlier than the Common Court docket of the European Union searching for the annulment of these obligations to declare their funds or financial assets earlier than 1 September 2022 and to cooperate with the competent nationwide authorities. They submit that, since these obligations usually are not laid down in a call taken by the Council within the subject of the widespread international and safety coverage (CFSP), they can’t be considered measures vital for the implementation of such a call. Specifically, they argue that the Council regulation quantities to a misuse of powers, for the reason that adoption of the obligations in query ought to fall inside the implementing powers of the Member States.

The Common Court docket dismisses the actions of their entirety.

In its judgments, the Common Court docket recollects that EU legislation permits the adoption of laws by the Council so as to implement or give impact to restrictive measures in order to make sure their uniform software in all Member States.

The measures offered for by EU legislation usually are not restricted to obligations to not act and the Council was entitled to undertake reporting and cooperation obligations, though they weren’t expressly offered for within the resolution to which they relate.

The Common Court docket additionally takes the view that the Council didn’t act within the stead of the Member States in deciding how the restrictive measures needs to be applied and what penalties ought to apply of their territory. Quite the opposite, the nationwide authorities retain their energy to determine whether or not the offence of participation in circumvention actions and the penalties connected thereto are to be of a felony, civil or administrative nature.