Stavytskyi v Council (Ukraine - Freezing of funds - Judgment) [2018] EUECJ T-242/16 (22 March 2018)

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(Common foreign and security policy — Restrictive measures adopted in view of the situation in Ukraine — Freezing of funds — List of persons, entities and bodies covered by the freezing of funds and economic resources — Applicant’s name maintained on the list — Obligation to state reasons — Objection of illegality — Proportionality — Legal basis — Manifest error of assessment)

Edward Stavytskyi, residing in Brussels (Belgium), represented by J. Grayston, Solicitor, P. Gjørtler, G. Pandey and D. Rovetta, lawyers,

Council of the European Union, represented by V. Piessevaux and J.-P. Hix, acting as Agents,

European Commission, represented initially by E. Paasivirta and S. Bartelt, and subsequently by E. Paasivirta and L. Baumgart, acting as Agents,

APPLICATION brought pursuant to Article 263 TFEU and seeking the annulment of Council Decision (CFSP) 2016/318 of 4 March 2016 amending Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2016 L 60, p. 76), and Council Implementing Regulation (EU) 2016/311 of 4 March 2016 implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine (OJ 2016 L 60, p. 1), in so far as the applicant’s name was maintained on the list of persons, entities and bodies subject to those restrictive measures,

composed of G. Berardis (Rapporteur), President, D. Spielmann and Z. Csehi, Judges,

having regard to the written part of the procedure and further to the hearing on 20 September 2017,

1 The applicant, Edward Stavytskyi, is a former Minister for Energy and the Coal Industry of Ukraine.

2 On 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).

‘(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.’

‘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.’

5 The detailed rules for implementation of the restrictive measures at issue are defined in the subsequent paragraphs of that article.

6 On 5 March 2014, the Council also 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).

7 In accordance with Decision 2014/119, Regulation No 208/2014 requires the adoption of the restrictive measures at issue and lays down the detailed rules for implementation of those restrictive measures in terms which are essentially identical to those used in that decision.

8 The names of the persons covered by Decision 2014/119 and Regulation No 208/2014 appear on the list in the Annex to that decision and in Annex I to that regulation (‘the list at issue’) along with, in particular, a statement of the reasons for their listing. The applicant’s name does not appear on the list at issue.

9 Decision 2014/119 and Regulation No 208/2014 were amended by Council Implementing Decision 2014/216/CFSP of 14 April 2014 implementing Decision 2014/119 (OJ 2014 L 111, p. 91) and by Council Implementing Regulation (EU) No 381/2014 of 14 April 2014 implementing Regulation No 208/2014 (OJ 2014 L 111, p. 33) (‘the measures of April 2014’).

10 By the measures of April 2014 the applicant’s name was added to the list at issue with the identifying information ‘former Minister of Fuel and Energy of Ukraine’ and the following statement of reasons:

‘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.’

11 By application lodged at the Court Registry on 25 June 2014, the applicant brought an action seeking the annulment of the measures of April 2014, in so far as they related to him. That action was registered as Case T‑486/14.

12 Decision 2014/119 was also amended by Council Decision (CFSP) 2015/143 of 29 January 2015 (OJ 2015 L 24, p. 16), which entered into force on 31 January 2015. As to the criteria for the designation of persons covered by the restrictive measures at issue, according to Article 1 of Decision 2015/143, Article 1(1) of Decision 2014/119 is replaced by the following:

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.’

13 Council Regulation (EU) 2015/138 of 29 January 2015 amending Regulation No 208/2014 (OJ 2015 L 24, p. 1) amended the latter, in accordance with Decision 2015/143.

14 Decision 2014/119 and Regulation No 208/2014 were subsequently amended by Council Decision (CFSP) 2015/364 of 5 March 2015 amending Decision 2014/119 (OJ 2015 L 62, p. 25) and by Council Implementing Regulation (EU) 2015/357 of 5 March 2015 implementing Regulation No 208/2014 (OJ 2015 L 62, p. 1). In Decision 2015/364, Article 5 of Decision 2014/119 was replaced by new wording, extending the application of the restrictive measures at issue until 6 March 2016. In Implementing Regulation 2015/357, Annex I to Regulation No 208/2014 was replaced by new wording, amending the entries for 18 persons.

15 By Decision 2015/364 and Implementing Regulation 2015/357, the applicant’s name was maintained on the list at issue, with the identifying information ‘former Minister of Fuel and Energy’ and the following statement of reasons:

‘Person subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets.’

16 The applicant did not bring an action against Decision 2015/364 or Implementing Regulation 2015/357.

17 By letter of 6 November 2015, the Council forwarded to the applicant a letter from the Prosecutor General’s Office of Ukraine (‘the PGO’) to the High Representative of the European Union for Foreign Affairs and Security Policy, of 8 September 2015, concerning the criminal proceedings to which he was subject in Ukraine.

19 On 15 December 2015, the Council forwarded to the applicant a letter from the PGO of 30 November 2015 concerning the criminal proceedings relating to him.

20 The applicant made observations in this regard, once by letter of 5 January 2016 and a second time by letter of 24 February 2016. On the second occasion, the applicant indicated amongst other things that, by judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45), the General Court had annulled the measures of April 2014, holding essentially that the Council had not had sufficient evidence to include the applicant on the list at issue and, furthermore, that the letter from the PGO of 30 November 2015 did not constitute such evidence. Consequently, the applicant’s name should not have been maintained on that list.

21 On 4 March 2016, 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) (‘the contested measures’), by which it extended until 6 March 2017 the application of the restrictive measures at issue, without altering the reasons given with regard to the applicant, as set out in paragraph 15 above.

22 By letter of 7 March 2016, the Council notified the contested measures to the applicant and replied, by way of a combined response, to his letters of 11 December 2015, 5 January 2016 and 24 February 2016.

23 By application lodged at the Court Registry on 17 May 2016, the applicant brought the present action.

24 On 16 August 2016, the Council lodged its defence, followed on 20 September 2016 by a reasoned application, pursuant to Article 66 of the Rules of Procedure of the General Court, for the content of certain documents annexed to the application and defence to be omitted from the documents relating to that case to which the public has access.

25 On 13 September 2016, the European Commission applied for leave to intervene in the case, in support of the form of order sought by the Council. By decision of 25 October 2016, the President of the Sixth Chamber of the General Court granted that application pursuant to Article 144(4) of the Rules of Procedure, the main parties not having raised any issue of confidentiality.

26 The written part of the procedure was closed on 30 January 2017, after a reply, a statement in intervention, observations of the applicant on that statement and a rejoinder (which included the Council’s observations on the statement in intervention) had been filed.

27 The main parties did not make a request for a hearing within the time limit laid down in Article 106(2) of the Rules of Procedure. A request to that effect which was lodged by the applicant after the time limit had expired was not placed on the file, by decision of the President of the Sixth Chamber of the General Court of 5 April 2017.

28 On the proposal of the Judge-Rapporteur, the General Court (Sixth Chamber) decided to open of its own motion the oral part of the procedure and, by way of a measure of organisation of procedure pursuant to Article 89(3) of the Rules of Procedure, put a question to the main parties for a written response. The Council replied to the Court’s question by document lodged at the Court Registry on 28 July 2017, followed, on 3 August 2017, by an application, based on Article 66 of the Rules of Procedure, for the content of certain documents annexed to that document to be omitted from the documents relating to that case to which the public has access. The applicant’s response to this question was lodged at the Court Registry on 3 August 2017.

29 The parties presented oral argument and answered the questions put to them by the Court at the hearing on 20 September 2017. On that occasion, the Court requested the applicant to produce its letter to the Council of 27 August 2014, an extract of which it had cited, with the incorrect date of 28 August 2014, in its written response to the Court’s question referred to in paragraph 28 above. On the same day, the applicant lodged at the Court Registry the document in question.

30 By decision of the President of the Sixth Chamber of the Court of 27 September 2017, the oral part of the procedure was closed.

33 At the hearing, the Council added a further head of claim, stating that, in the alternative, should the Court annul the contested measures, it asked the Court, in essence, to maintain the effects of Decision 2014/119, as last amended by Decision 2016/318, until the annulment of Regulation No 208/2014, as last amended by Regulation 2016/311, had taken effect.

34 In support of his action, the applicant raises four pleas in law, the first alleging that the listing criterion contained in Article 1(1) of Decision 2014/119, as amended by Decision 2015/143, and in Article 3(1a) of Regulation No 208/2014, as amended by Regulation 2015/138 (‘the relevant criterion’), is illegal, the second alleging infringement of the obligation to state reasons, the third alleging a manifest error of assessment, in that the fact that the applicant is subject to criminal proceedings before the Ukrainian authorities is not a sufficiently solid factual basis, and the fourth alleging an error as to legal basis, in that the restrictive measures concerning him are not a matter of common foreign and security policy (CFSP), but of international cooperation in criminal proceedings.

35 Given the way in which certain arguments raised in relation to different pleas are linked, it is convenient to proceed on the basis that the applicant essentially relies, first, on infringement of the obligation to state reasons, second, on the illegality, disproportionality and lack of legal basis of the relevant criterion, and third, on manifest errors of assessment in applying that criterion to his case.

36 In the first place, the applicant argues that the statement of reasons on the basis of which his name was maintained on the list at issue by the contested measures, which was that set out in paragraph 15 above, is general and stereotypical, merely reproducing the definition of the relevant criterion.

37 In the second place, the applicant maintains that the Council cannot supplement those reasons through the information contained in the letter of 7 March 2016 (see paragraph 22 above), on the basis that a legal act must itself contain a sufficient statement of reasons. In any event, the applicant argues that the supplementary information contained in that letter, like that provided by the Council to the applicant in the course of the procedure which led to the adoption of the contested measures, would not constitute a sufficient statement of reasons.

38 The Council, supported by the Commission, disputes the applicant’s arguments.

39 Under the second paragraph of Article 296 TFEU, ‘legal acts shall state the reasons on which they are based’.

40 Under Article 41(2)(c) of the Charter of Fundamental Rights of the European Union (‘the Charter’), which Article 6(1) TEU recognises as having the same legal value as the Treaties, the right to good administration includes, inter alia, ‘the obligation of the administration to give reasons for its decisions’.

41 It 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 measure 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 requirements to be satisfied by the statement of reasons depend on the circumstances of each case (see judgment of 14 April 2016, Ben Ali v Council, T‑200/14, not published, EU:T:2016:216, paragraph 94 and the case-law cited).

42 It 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 14 April 2016, Ben Ali v Council, T‑200/14, not published, EU:T:2016:216, paragraph 95 and the case-law cited).

43 In particular, the statement of reasons for an asset-freezing measure cannot, in principle, consist solely of a general, stereotypical formulation. Subject to the qualifications stated in paragraph 42 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 14 April 2016, Ben Ali v Council, T‑200/14, not published, EU:T:2016:216, paragraph 96 and the case-law cited).

44 Finally, 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 that measure 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 (judgment of 22 March 2001, France v Commission, C‑17/99, EU:C:2001:178, paragraph 35; see also, to that effect, judgment of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraphs 60 and 61).

45 In the present case, it must be noted that the statement of reasons given for maintaining the applicant’s name on the list at issue (see paragraph 15 above) is specific and concrete and sets out the factors which constitute the basis for that decision, namely that he was subject to criminal proceedings brought by the Ukrainian authorities for the misappropriation of public funds or assets.

46 In addition, the decision to maintain the restrictive measures at issue occurred in a context known to the applicant, who had been informed, during the exchanges with the Council, inter alia of the letters from the PGO of 8 September and of 30 November 2015 (see paragraphs 17 and 19 above), on which it is common ground between the parties that the Council based its decision to maintain those measures (see, to that effect and by analogy, judgments of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraphs 53 and 54 and the case-law cited, and of 6 September 2013, Bank Melli Iran v Council, T‑35/10 and T‑7/11, EU:T:2013:397, paragraph 88). Those letters specify the name of the authority responsible for the investigation, the case numbers of the criminal proceedings brought against the applicant, amongst others, the dates on which those proceedings were opened, the offences which he is alleged to have committed, the names of the other persons and bodies concerned, and the amount of public funds allegedly misappropriated, the relevant articles of the Ukrainian Criminal Code and the fact that the applicant was informed in writing that he was a suspect. In particular, the letter of 30 November 2015 states as follows:

47 In addition, the contested measures were adopted in a context which also includes the exchanges between the applicant and the Council in the context of the case which gave rise to the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45).

48 As regards the details provided by the Council in the letter of 7 March 2016, it must be pointed out that, as the Council rightly submits, that letter, which contains additional reasons, sent in the context of correspondence between the Council and the applicant, may be taken into account in the examination of those measures (see, to that effect and by analogy, judgment of 15 June 2017, Kiselev v Council, T‑262/15, EU:T:2017:392, paragraph 47 and the case-law cited).

49 Accordingly, it is necessary to assess the contested measures also in the light of the details which the Council provided in the letter of 7 March 2016, in response to the applicant’s letter (see paragraphs 20 to 22 above), relating, in essence, to the differences between the contested measures and the measures which were at issue in the case that gave rise to the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45), and to the fact that the applicant’s complaints, relating to the manner in which the proceedings in Ukraine were conducted, should have been dealt with by the authorities of that country, rather than by the Council. In any event, it must be noted that, with the exception of those two points, the content of the letter of 7 March 2016 essentially coincides with that of the contested measures and of the correspondence exchanged previously between the Council and the applicant (see, to that effect and by analogy, judgment of 15 June 2017, Kiselev v Council, T‑262/15, EU:T:2017:392, paragraphs 48 and 49).

50 In the light of all the foregoing, it must be concluded that the contested measures, taken in their context, state to the requisite legal standard the matters of fact and law on which, according to the Council, those measures are based.

51 That conclusion cannot be called into question by the applicant’s argument concerning the allegedly stereotypical nature of the statement of reasons concerning him.

52 In that respect, it must be observed that, while the considerations within that statement of reasons are the same as those on the basis of which restrictive measures were imposed on the other natural persons who are included in the list at issue, they are nonetheless designed to describe the particular situation of the applicant, who, no less than other individuals, has been, according to the Council, subject to judicial proceedings linked to investigations concerning the misappropriation of Ukrainian public funds (see, to that effect, judgment of 27 February 2014, Ezz and Others v Council, T‑256/11, EU:T:2014:93, paragraph 115).

53 The applicant’s other arguments, concerning inter alia the fact that no Ukrainian court has endorsed the ongoing proceedings against him and that the misappropriation of which he is accused relates to real property, which by definition cannot be moved outside of Ukraine, concerns the merits of the reasons set out in paragraph 15 above. It follows that, in accordance with the case-law referred to in paragraph 44 above, those reasons should not be examined in the context of the applicant’s complaints relating to the infringement of the obligation to state reasons, but rather in the context of his complaints contesting the merits of the decision to maintain his name on the list at issue.

54 In the light of the foregoing considerations, it is necessary to reject the applicant’s complaints relating to the infringement of the obligation to state reasons.

Illegality, disproportionality and lack of legal basis of the relevant criterion

55 In the first place, the applicant maintains that the relevant criterion, as provided for by Decision 2015/143 and Regulation 2015/138 (‘the measures of January 2015’) is illegal for the purposes of Article 277 TFEU, in that, by the measures of January 2015, the Council made it possible for restrictive measures to be adopted in relation to persons ‘subject to investigation by the Ukrainian authorities’, when the case-law of the General Court requires the investigation to have been endorsed by a criminal court. Against that background, the applicant states that the decision of the District Court of [confidential] (‘the District Court’) of 3 October 2014 (‘the District Court decision of 3 October 2014’), mentioned in the letter from the PGO of 30 November 2015 and produced by the Council as an annex to the defence, is limited to ordering the seizure [confidential] and it contains no statement of reasons other than the one concerning the fact that a criminal investigation relating to him had been opened. Accordingly, the applicant argues that the decision cannot be regarded as endorsement by a court.

57 In that regard, first, it should be noted, as the Council submits, that the applicant’s arguments are based on a misinterpretation of the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45). In that judgment, the Court, referring inter alia to the judgment of 27 February 2014, Ezz and Others v Council (T‑256/11, EU:T:2014:93, paragraphs 57 to 61), observed that identification of a person as responsible for an offence of misappropriation of Ukrainian State funds did not necessarily imply that that person had been convicted of that offence. It is true that the Court upheld the action. However, in order to reach that result, it did not rely on the fact that the evidence on which the Council had relied in order to include the applicant’s name on the list at issue did not emanate from a criminal court, as was the situation in the case which gave rise to the judgment of 27 February 2014, Ezz and Others v Council (T‑256/11, EU:T:2014:93). On the contrary, the Court drew attention to the fact that, although that evidence was sent by a high judicial body in a third country, that is to say, the OPG, it contained only a general and generic statement linking the applicant’s name, among those of other former senior officials, to an investigation which essentially sought to establish that misappropriation of funds had in fact occurred. The Court’s reason for annulment did not therefore lie in the source of the evidence used by the Council, but in the content of that evidence, which did not yield any concrete and specific factual elements on the acts or conduct attributed to the applicant by the Ukrainian authorities (see, to that effect, judgment of 28 January 2016, Stavytskyi v Council, T‑486/14, not published, EU:T:2016:45, paragraphs 44 to 47).

58 Therefore, the applicant is wrong to rely on the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45), in order to seek to establish a general rule, that the measures of January 2015 allegedly infringed by introducing the relevant criterion, according to which, in order for the Council to be able to adopt restrictive measures against a person who is the subject of criminal investigations by the Ukrainian authorities for misappropriation of public funds, this investigation must necessarily have been endorsed by a criminal court.

59 Second, the case-law subsequent to the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45), has confirmed that the PGO is one of the highest judicial authorities in Ukraine, since, in that State, it acts as the public prosecutor’s office in the administration of criminal justice and conducts pre-trial investigations in the context of criminal proceedings (see, to that effect, judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraphs 41 and 93). Similarly, it has already been held that evidence from the OPG, provided that its content is sufficiently precise, may justify the adoption of restrictive measures against persons who are the subject of criminal proceedings for misappropriation of public funds (see, to that effect, judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 114), as the Council correctly observes.

60 Third, for the sake of completeness, it should be pointed out, as the Council observes, that the District Court, by its decision of 3 October 2014 to seize [confidential], found that the evidence which justified the opening of an investigation against the applicant was also capable of justifying the seizure of assets belonging to the applicant. In so doing, the District Court essentially endorsed the results of the investigation.

61 In the light of all those considerations, it must be held that the applicant’s arguments do not show that the relevant criterion is illegal for the purposes of Article 277 TFEU. Similarly, it is necessary to reject the applicant’s first argument referred to in paragraph 53 above.

62 In the second place, the applicant argues that, in the light of the case-law and in particular the judgment of 15 September 2016, Yanukovych v Council (T‑348/14, EU:T:2016:508), if it is not to infringe the principle of proportionality, the Council can only use the relevant criterion to adopt measures with regard to persons suspected of having misappropriated public funds such as to undermine the legal and institutional foundations of Ukraine, having regard to the amount and type of funds or assets misappropriated and to the context in which the offence took place. In other cases, according to the applicant, any action taken by the EU institutions in connection with criminal proceedings ongoing in a third country does not fall within the CFSP, but judicial cooperation in criminal matters or police cooperation, such that, if Article 40 TEU is not to be infringed, such action requires a legal basis other than Article 29 TEU and Article 215 TFEU, bearing in mind that the latter is only available where a CFSP decision has already been adopted.

64 As a preliminary point, it must be observed that the parties agree on the fact that the case-law has recognised that restrictive measures taken under the relevant criterion may be legitimately adopted on the basis of Article 29 TEU and Article 215 TFEU, provided that the misappropriation of public funds or assets of which the relevant persons are suspected is such that it is liable to undermine the legal and institutional foundations of the country concerned, having regard to the amounts concerned, the type of funds or assets misappropriated or to the context in which the offence took place.

65 In that context, it must be recalled that the objectives of the EU Treaty concerning the CFSP are stated, in particular, in Article 21(2)(b) TEU, as follows:

‘The Union shall define and pursue common policies and actions, and shall work for a high degree of cooperation in all fields of international relations in order to: … consolidate and support democracy, the rule of law, human rights and the principles of international law.’

66 That objective was mentioned in recital 2 of Decision 2014/119, which is set out in paragraph 3 above.

67 In that regard, it must be observed that the case-law has established that objectives such as that mentioned in Article 21(2)(b) TEU are intended to be achieved by an asset-freeze the scope of which is, as in this case, restricted to the persons identified as being responsible for misappropriation of State funds and to persons, entities or bodies associated with them, that is to say, to the persons whose actions are liable to have jeopardised the proper functioning of public institutions and bodies linked to them (see, to that effect, judgments of 27 February 2014, Ezz and Others v Council, T‑256/11, EU:T:2014:93, paragraph 44; of 14 April 2016, Ben Ali v Council, T‑200/14, not published, EU:T:2016:216, paragraph 68; and of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 85).

68 Similarly, it must be recalled that respect for the rule of law is one of the primary values on which the European Union is founded, as is stated in Article 2 TEU, and in the preambles of the EU Treaty and of the Charter. Respect for the rule of law constitutes, moreover, a prerequisite of accession to the European Union, pursuant to Article 49 TEU. The concept of the rule of law is also enshrined in the preamble of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 87).

69 The case-law of the Court of Justice and of the European Court of Human Rights, and the work of the Council of Europe, by means of the European Commission for Democracy through Law, provide a non-exhaustive list of principles and standards which may fall within the concept of the rule of law. That list includes: the principles of legality, legal certainty and the prohibition on arbitrary exercise of power by the executive; independent and impartial courts; effective judicial review, extending to respect for fundamental rights and equality before the law (see, in that regard, the rule of law checklist adopted by the European Commission for Democracy through Law at its 106th Plenary Session (Venice, 11-12 March 2016)). Further, in the context of European Union external action, a number of legal instruments include reference to the fight against corruption as a principle within the scope of the concept of the rule of law (see, for example, Regulation (EC) No 1638/2006 of the European Parliament and of the Council of 24 October 2006 laying down general provisions establishing a European Neighbourhood and Partnership Instrument (OJ 2006 L 310, p. 1)) (judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 88).

70 Furthermore, it must be observed that the prosecution of economic crimes, such as 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 within the scope of the rule of law (judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 116).

71 However, while it is conceivable that certain conduct pertaining to acts classifiable as misappropriation of public funds may be capable of undermining the rule of law, it cannot be accepted that any act classifiable as misappropriation of public funds, committed in a third country, justifies European Union action with the objective of consolidating and supporting the rule of law in that country, using the powers of the Union under the CFSP. Before it can be established that a misappropriation of public funds is capable of justifying European Union action under the CFSP, based on the objective of consolidating and supporting the rule of law, it is, at the very least, necessary that the disputed acts should be such as to undermine the legal and institutional foundations of the country concerned (judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 89).

72 It follows that the relevant criterion can be considered to be compatible with the European Union legal order only to the extent that it is possible to attribute to it a meaning that is compatible with the requirements of the higher rules with which it must comply, and more specifically with the objective of consolidating and supporting the rule of law in Ukraine. Further, a consequence of that interpretation is that the broad discretion enjoyed by the Council in relation to the definition of the general listing criteria can be respected, while review, in principle full review, of the lawfulness of European Union acts in the light of fundamental rights is ensured (see judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 90 and the case-law cited).

73 Consequently, the relevant criterion must be interpreted as meaning that it does not concern, in abstract terms, any act classifiable as misappropriation of public funds, but rather that it concerns the misappropriation of public funds or assets which, having regard to the amount or the type of funds or assets misappropriated or to the context in which the offence took place, are, at the very least, such as to undermine the legal and institutional foundations of Ukraine, and in particular the principles of legality, the prohibition of arbitrary exercise of power by the executive, effective judicial review and equality before the law and, ultimately, to undermine respect for the rule of law in that country. As thus interpreted, that criterion is compatible with and proportionate to the relevant objectives of the EU Treaty (judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 91).

74 In the light of that case-law, which the parties do not call into question, it must be concluded that the relevant criterion, thus interpreted, is not illegal and could be introduced by measures based on Article 29 TEU and Article 215 TFEU, which therefore constitute appropriate legal bases.

75 It follows also that, by providing for the relevant criterion, the Council did not infringe the first paragraph of Article 40 TEU, which states that the implementation of the CFSP is not to affect the application of the procedures and the extent of the powers of the institutions laid down by the Treaties for the exercise of the Union competences referred to in Articles 3 to 6 TFEU.

76 In the light of the foregoing considerations, it is necessary to reject in their entirety the applicant’s complaints of illegality, disproportionality and lack of legal basis of the relevant criterion.

77 It is necessary, however, to examine whether the Council, when applying to the applicant’s case the relevant criterion, interpreted in the manner described in paragraph 73 above, made manifest errors of assessment.

Manifest errors of assessment in applying the relevant criterion to the applicant’s case

78 The applicant points out that the Council bears the burden of proof as regards the listing of a person and that any decision taken in that regard must have a sufficiently solid factual basis. He argues that, in the present case, the latter requirement is not met.

79 More specifically, the applicant claims, first, that the information which the Council possessed regarding the acts of misappropriation of Ukrainian public funds or assets alleged against him is insufficient, second, that the legal and institutional foundations of Ukraine have not been undermined and, third, the existence of irregularities in the criminal proceedings relating to him.

80 Before considering in detail the applicant’s arguments, it is necessary to recall certain principles on the judicial review carried out by the Court in the context of disputes relating to restrictive measures and on the obligations on the Council.

81 According to the case-law, the Courts of the European Union must, in their judicial review of restrictive measures, allow the Council a broad discretion in establishing the general criteria defining the category of persons that could be made subject to such measures (see, to that effect, judgments of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 120, and of 21 April 2015, Anbouba v Council, C‑605/13 P, EU:C:2015:248, paragraph 41).

82 However, 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 person’s name on the list of persons subject to restrictive measures, the Courts of the European Union are to ensure that that decision, which affects that person individually, is taken on a sufficiently solid factual basis. This entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that 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, are substantiated by sufficiently specific and concrete evidence (see judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 36 and the case-law cited).

83 According to the case-law, 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 the subject of judicial proceedings in that country (judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 57).

84 In that regard, as was observed in paragraph 59 above, the PGO is one of the highest Ukrainian judicial authorities.

85 It may, admittedly, be inferred by analogy from the case-law on restrictive measures adopted with a view to combating terrorism that it fell, in the present case, to the Council to examine carefully and impartially the evidence provided to it by the Ukrainian authorities, in particular the letters from the PGO of 8 September and of 30 November 2015, in the light, in particular, of the observations and any exculpatory evidence that may have been submitted by the applicant. Moreover, 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 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 58 and the case-law cited).

86 However, it 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 asked to provide, the nature, specific scope and the objective of the restrictive measures must be taken into account (see judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 59 and the case-law cited).

87 In that regard, as is apparent from recitals 1 and 2 of Decision 2014/119 (see paragraph 3 above), that decision forms part of a more general EU policy of support for the Ukrainian authorities which is intended to promote the political stability of Ukraine. It thus satisfies the objectives of the CFSP, 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 and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 60 and the case-law cited).

88 It is within that context that the restrictive measures at issue provide for the funds and economic resources of, in particular, persons who have been identified as responsible for the misappropriation of Ukrainian State funds to be frozen. Facilitating the recovery of those funds consolidates and supports the rule of law in Ukraine (see paragraphs 69 to 73 above).

89 It 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 public 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 and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 62 and the case-law cited).

90 Thus, the restrictive measures at issue, which were 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 a person’s entry 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 and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 64 and the case-law cited).

91 In the present case, what the Council must ascertain is, first, to what extent the letters from the PGO on which it relied prove that, as indicated by the grounds for including the applicant’s name on the list at issue, the applicant is the subject of criminal proceedings brought by the Ukrainian authorities in respect of acts that may be characterised as the misappropriation of State funds, and, secondly, whether those proceedings are such that the applicant’s 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 85 above, be incumbent on the Council to investigate further (see, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 65 and the case-law cited).

92 Furthermore, in the context of the cooperation governed by the contested measures (see paragraph 87 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 public funds. As explained in paragraph 89 above, in adopting the contested measures, the Council does not seek itself to punish the misappropriation of public 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. Furthermore, as is apparent from paragraph 90 above, the Council’s obligations under the contested measures cannot be treated in the same way as those of a national judicial authority of a Member State in the context of asset-freezing criminal proceedings initiated, in particular, in the context of international cooperation in criminal matters (see, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 66).

93 That interpretation is confirmed by paragraph 77 of the judgment of 5 March 2015, Ezz and Others v Council (C‑220/14 P, EU:C:2015:147), in which the Court of Justice held, in circumstances similar to those of the present case, that it was not for the Council or the General Court to verify whether the investigations to which the appellants were subject were well founded, but only to verify whether that was the case as regards the decision to freeze funds in the light of the Egyptian authorities’ request for assistance.

94 It is true that the Council cannot adopt, in all circumstances, the findings made by the Ukrainian judicial authorities in the documents provided by those authorities. 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, to that effect and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 67).

95 However, 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. 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 letters from the PGO 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 and by analogy, judgment of 30 June 2016, Al Matri v Council, T‑545/13, not published, EU:T:2016:376, paragraph 68).

96 It is in the light of those considerations that the applicant’s specific arguments must be assessed (see paragraph 79 above).

Whether the information which the Council possessed regarding the acts of misappropriation of Ukrainian public funds or assets alleged against the applicant is sufficient

97 The applicant claims that, as in the case that gave rise to the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45), the letters from the PGO on which the Council relied, in particular the letter of 30 November 2015, do not provide enough detail concerning the misappropriation of funds alleged against him and do not explain how he could have obtained the sum of UAH [confidential] which is referred to therein. Moreover, the applicant observes that that alleged misappropriation relates to real property which, by its very nature, remains in Ukraine and cannot be moved abroad. Accordingly, only the Ukrainian authorities could take measures to recover the property in question, whereas the freezing of the applicant’s funds decided upon by the Council has no impact on the alleged misappropriation. The applicant further submits that the goods referred to in the OPG’s letter of 30 November 2015 are assumed to have been transferred [confidential] in 2006 and 2007 and that, during the period following that transfer, various Ukrainian authorities having had to assess the legality of that commercial transaction found that the complaints in that regard were unfounded. That letter does not make clear whether it is in fact the same transaction, or on what grounds it is currently claimed that the applicant is alleged to have misappropriated the real estate concerned.

98 The Council, supported by the Commission, disputes the applicant’s arguments.

99 It should be recalled that, in the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45), the applicant was successful, in particular on the ground that the Council had adopted restrictive measures against him without knowing the acts of misappropriation of public funds which the Ukrainian authorities specifically alleged against him. Indeed, the letter from the PGO on which the Council had relied contained only a general and generic statement linking the applicant’s name, among those of other former senior officials, to an investigation which essentially sought to establish that misappropriation of public funds had in fact occurred. Even though the letter identified the nature of the offence which the applicant was suspected of having committed under the Ukrainian Criminal Code, that is to say, the appropriation of Ukrainian State funds, penalised under Article 191 of that code, it did not provide any details as to confirmation of the acts which the investigation conducted by the Ukrainian authorities was in the process of verifying and, still less, as to the applicant’s individual liability, even if presumed, in respect of those acts. Thus, that letter could not constitute a sufficiently solid factual basis to enable the Council to conclude that the acts alleged against the applicant were capable, first, of being categorised as misappropriation of public funds and, secondly, of undermining the rule of law in Ukraine (see, to that effect, judgment of 28 January 2016, Stavytskyi v Council, T‑486/14, not published, EU:T:2016:45, paragraphs 41, 44, 47 and 48).

100 It must be held that the letters from the PGO which constitute the basis of the contested measures in the present case, in particular the letter of 30 November 2015, provide more information than that in the letter which was at issue in the case that give rise to the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45).

102 It is also stated that those acts correspond to the criminal offence defined in Article 191(5) of the Ukrainian Criminal Code, which concerns the misappropriation of somebody else’s property when committed by a group of persons by prior conspiracy, in relation to a particularly large amount.

103 Similarly, it is specified that a notification of suspicion of the applicant was issued [confidential] and that the applicant was put on the international wanted list [confidential].

104 Moreover, it is stated that, during the investigation, property belonging to the applicant and his family was seized at the investigator’s request, by the decision of the District Court of 3 October 2014.

105 Accordingly, it must be held that the Council possessed sufficiently precise information when it adopted the contested measures.

106 As regards the applicant’s argument relating to the fact that, in the present case, misappropriation of real property is alleged, which cannot, by its very nature, be moved outside of Ukraine, it should be observed that the relevant criterion does not provide that, for a person to be listed, there must be a risk that the public funds that that person is suspected of having misappropriated are moved abroad. Thus, the reference to the misappropriation of public funds, if it is well founded, is sufficient, in itself, to justify the restrictive measures against the applicant (see, to that effect, judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 129).

107 In that regard, it follows from the case-law that the concept of misappropriation of public funds 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 therefore have caused damage which can be assessed in financial terms (see, to that effect and by analogy, judgment of 30 June 2016, CW v Council, T‑224/14, not published, EU:T:2016:375, paragraph 89).

108 Moreover, it should be pointed out that this interpretation of the concept in question leads to a definition analogous to that of the concept of misappropriation of European Union funds referred to in Article 4(3) of Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law (OJ 2017 L 198, p. 29). In accordance with that article, ‘“misappropriation” means the action of a public official who is directly or indirectly entrusted with the management of funds or assets to commit or disburse funds or appropriate or use assets contrary to the purpose for which they were intended in any way which damages the Union’s financial interests’ (see, to that effect and by analogy, judgment of 30 June 2016, CW v Council, T‑224/14, not published, EU:T:2016:375, paragraph 90).

109 That broad interpretation of the concept at issue is necessary in order to ensure the full effectiveness of Decision 2014/119 with a view to achieving its objectives of consolidating the rule of law in Ukraine. Taking into account, moreover, the purely precautionary nature of the measure at issue, the general principle of European Union law of the legality of offences and penalties, enshrined in the first sentence of Article 49(1) of the Charter, and that of the presumption of innocence, enshrined in Article 48(1) of the Charter, are not applicable in the present case and cannot, therefore, preclude such a broad interpretation (see, to that effect and by analogy, judgment of 30 June 2016, CW v Council, T‑224/14, not published, EU:T:2016:375, paragraph 91 and the case-law cited).

110 In the present case, as the Council correctly observes, the misappropriation of public funds or assets described in the letter of 30 November 2015, as long as it lasts and has not been undone, for example pursuant to a court decision which has become final, causes a loss to the Ukrainian State which is deprived of the ownership of the misappropriated funds or assets and of the use and enjoyment thereof, including possible revenue generated thereby.

111 The fact that, as a result of the restrictive measures provided for in the contested measures, the applicant’s funds in the EU are provisionally frozen helps to facilitate the Ukrainian authorities’ task of recovering misappropriated public funds and assets, in the event that the applicant is found guilty, and supplements the measures adopted at the national level, such as the seizure of the property ordered by the District Court (see paragraph 104 above).

112 Indeed, in the event that the accusations against the applicant are recognised as well founded by the Ukrainian courts and that those courts order the recovery of the misappropriated funds, such recovery could be effected, in particular, by using the funds that the applicant might have placed in the EU. In that regard, it is irrelevant whether those possible funds originate in the transaction which is the subject of the investigation relating to the applicant, given that what matters is to facilitate the Ukrainian State’s recovery of funds from which it should never have been separated.

113 As regards the applicant’s argument by which he claims, in essence, that the Council failed to carry out further investigations on the facts alleged against him in the letter of 30 November 2015, which allegedly date back to 2006-2007 and on which, subsequently, several Ukrainian authorities allegedly adjudicated, dismissing as unfounded the complaints which had been made in that regard (‘the argument at issue’), it should be noted that the applicant has been unable to show that he put forward the argument at issue before the Council, prior to the adoption of the contested measures.

114 First, in his written reply to the Court’s question requesting that he specify when and in what terms he had raised the argument at issue before the Council, the applicant did not submit any document capable of establishing that he had put forward such an argument before the adoption of the contested measures. Thus, in the letter of 27 August 2014 that he mentions in his reply and which was submitted following the hearing (see paragraph 29 above), only vague references are to be found to the fact that the applicant was included in ‘the [confidential] investigation’ and that he ‘was however shortly thereafter removed from the investigation and since then has no longer been part of the [confidential] investigation’. The applicant has not provided any details on the subject matter of that investigation and the reasons for his removal from that investigation.

115 Second, the Council, in its written reply to the Court’s question referred to in paragraph 114 above, confirmed that it became aware of the argument at issue only when the Court Registry notified to it the application in the present case. Moreover, the Council specified that, after learning of the existence of that argument, it carried out further investigations, asking for explanations from the Ukrainian authorities, which replied to it in identical terms in the Council Working Party document of 18 November 2016 submitted before the Court. However, that action taken by the Council and the reply of the Ukrainian authorities are not relevant for the purposes of the present case, since the legality of the contested measures must be assessed in the context which existed at the time of their adoption (see, to that effect, judgment of 4 September 2015, NIOC and Others v Council, T‑577/12, not published, EU:T:2015:596, paragraph 112 and the case-law cited).

116 Third, during the hearing, in reply to a question put by the Court, the applicant conceded that he raised the argument at issue for the first time in the application by which the present case was brought, whilst underlining the obligation that lies on the Council to verify in a proactive way that the facts on which it relies are correct. That reply was noted in the minutes of the hearing.

117 Fourth, in reply to other questions put by the Court at the hearing, the applicant also conceded that, in his letter of 5 January 2016 (see paragraph 20 above), containing his observations on the letter from the PGO of 30 November 2015, he had not put forward the argument at issue, since his lawyers had not yet been informed by him that the facts mentioned in the letter of 30 November 2015 dated back to 2006-2007 and had already been examined by several Ukrainian authorities.

118 Accordingly, it must be concluded that the applicant had not provided the Council with material capable of triggering the obligation for the latter to carry out further investigations, in accordance with the case-law recalled in paragraph 95 above. The Council was therefore properly entitled to confine itself to relying on the material that the Ukrainian authorities had already provided to it.

119 In the light of the foregoing considerations, the applicant’s present arguments must be rejected, as must his second argument set out in paragraph 53 above.

The undermining of the legal and institutional foundations of the Ukrainian State

120 The applicant maintains that the Council has never explained how the facts alleged against him could undermine the legal and institutional foundations of Ukraine.

121 In the first place, the Council raises an objection of inadmissibility against the applicant’s present arguments, which were advanced only in the reply and do not meet the conditions for introducing new arguments. In the second place, the Council, supported by the Commission, contests the substance of those arguments.

122 With regard to the plea of inadmissibility raised by the Council, it should be borne in mind that, under Article 84 of the Rules of Procedure, no new plea in law may be introduced in the course of the proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure.

123 However, the case-law has made clear that a plea in law which constitutes an amplification of a plea made previously, whether directly or by implication, in the original application, and which is closely connected therewith, must be declared to be admissible. Moreover, arguments which in substance have a close connection with a plea raised in the application initiating the proceedings cannot be considered new pleas and they may be raised at the stage of the reply or the hearing (see judgment of 12 September 2012, Italy v Commission, T‑394/06, not published, EU:T:2012:417, paragraph 48 and the case-law cited).

124 In the present case, the applicant, in the application, had quoted verbatim paragraph 48 of the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45), in which the question was raised whether the Council had sufficient evidence to enable it to establish that certain acts were capable of undermining the rule of law in Ukraine.

125 In the reply, the applicant developed that argument, in the light in particular of the principles laid down in subsequent case-law, which were recalled in paragraphs 71 to 73 above. In that regard, it must be observed that, admittedly, case-law which merely confirms law which ought to have been known to the applicant when it brought an action cannot be regarded as a new matter allowing a fresh plea to be raised (see, to that effect, judgments of 12 June 2014, Deltafina v Commission, C‑578/11 P, EU:C:2014:1742, paragraphs 75 and 76, and of 12 July 2001, Banatrading v Council, T‑3/99, EU:T:2001:187, paragraph 49 and the case-law cited). However, the position is otherwise with case-law which provides clarifications such as those referred to in those paragraphs.

126 It follows that the plea of inadmissibility raised by the Council must be rejected.

127 As regards the merits of the applicant’s present arguments, it should be pointed out that the acts for which the applicant is being prosecuted by the Ukrainian authorities relate to the misappropriation of considerable funds, amounting to UAH [confidential] ([confidential]).

128 Moreover, the offences that the applicant is alleged to have committed have a wider context, in which 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 of arbitrary exercise of power by the executive, effective judicial review and equality before the law (see, to that effect and by analogy, judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 117). In that regard, it should be pointed out that, according to the letter of 30 November 2015, the applicant is suspected [confidential].

129 Facilitating the recovery of the funds allegedly misappropriated by the applicant, together with the recovery of funds allegedly misappropriated by other persons designated by the restrictive measures at issue, falls within the objective of consolidating the rule of law. In that context, 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, as evidenced, for example, by the decision of the District Court of 3 October 2014. Accordingly, the freezing of the funds decided upon by the Council strengthens the effectiveness of the initiative taken at the national level.

130 It follows that, in accordance with the case-law mentioned in paragraph 67 above, taken as a whole and taking into consideration the role occupied by the applicant within the former Ukrainian leadership, the restrictive measures in question 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, thereby helping to support the rule of law in that country (see, to that effect and by analogy, judgment of 15 September 2016, Klyuyev v Council, T‑340/14, EU:T:2016:496, paragraph 118).

131 In the light of those considerations, the applicant’s present arguments must be rejected.

132 The applicant claims that, although he brought the matter to its attention, the Council has not taken account of the fact that the criminal proceedings brought against him in Ukraine were irregular, in that the requirement, laid down by national law, for the preliminary investigation to be completed within two months of the statement of suspicion, was not complied with. Accordingly, he maintains that the investigation is time-barred. The applicant argues that there was a further irregularity in that, for a certain time, due to internal conflicts, there was no Prosecutor General of Ukraine, and that the criminal proceedings at issue were conducted by a deputy who, he claims, signed the letter of 30 November 2015. Against that background, the applicant also states that his name is no longer on the international wanted list maintained by the International Criminal Police Organisation (Interpol).

133 The Council, supported by the Commission, disputes the applicant’s arguments.

134 First, it should be pointed out that, by analogy with what was observed in paragraphs 91 to 95 above as regards the possibility that the Council is obliged to seek clarification from the Ukrainian authorities with respect to the material on which the criminal proceedings conducted by those authorities are based, the Council is not in principle required to assess whether those proceedings comply with the procedural rules applicable under Ukrainian law.

135 In the present case, in the letter of 11 December 2015 (see paragraph 18 above) the applicant had drawn the Council’s attention to the provisions of Ukrainian law setting the duration of pre-trial investigations and limitation periods for bringing actions.

136 The Council overlooked the applicant’s observations until the letter of 7 March 2016, in which the Council stated that any complaints on the manner in which the applicant’s case was handled in Ukraine should be referred to the Ukrainian authorities and dealt with by them.

137 However, it should be pointed out, as the Council observes, that the applicant never explained exactly what, according to Ukrainian law, the legal consequences of the failure to comply with the time limit normally provided for a pre-trial investigation are.

138 Moreover, in his letter of 11 December 2015, the applicant appears to concede that the fact that the person concerned by a pre-trial investigation has absconded may suspend the limitation period, even if he states that, in such a case, the investigation can relate only to ascertaining the whereabouts of the suspect. Such an investigation is a necessary precursor in order that the criminal proceedings on the misappropriation of public funds can be pursued.

139 As regards the evidence that he had absconded, the applicant submits that the Council, when adopting the contested measures, did not have in its possession the letter from the PGO of 25 July 2016, [confidential]. However, it should be noted that, as the Council observes, the fact that the applicant was hiding could be inferred from the information in the case that gave rise to the judgment of 28 January 2016, Stavytskyi v Council (T‑486/14, not published, EU:T:2016:45), the applicant having provided only the address of his lawyers, just as he has done in the present case, moreover. That information was known to the Council when the contested measures were adopted.

140 Accordingly, it must be concluded that the Council was properly entitled to take the view that the applicant’s observations did not call into question the existence of criminal proceedings against him for misappropriation of public funds.

141 Second, as regards the applicant’s argument relating to the fact that, during the period when the letters from the PGO of 8 September and 30 November 2015 were drafted, the position of Prosecutor General of Ukraine was vacant, it is sufficient to point out, in any event, as the Council observes, that those letters were signed by the Deputy Prosecutor General, who, as a high-ranking officer within the General Prosecutor’s Office, was empowered to provide information on the investigations on the applicant.

142 Third, as regards whether the applicant’s name was included on Interpol’s international wanted list, it must be observed that the relevant criterion refers only to the existence of criminal proceedings in Ukraine, without mentioning that the person concerned is or is not wanted internationally. Accordingly, as the Council recognised at the hearing, the presence of the applicant’s name on that list is merely one element of the context, which can have no decisive value. In any event, it is apparent from the evidence submitted by the Council that, at the time that the contested measures were adopted, the applicant’s name appeared on that list.

144 In the light of all of the above considerations, this action must be dismissed in its entirety. It is not therefore necessary to adjudicate on the request (see paragraph 33 above), submitted in the alternative by the Council, to maintain the effects of Decision 2014/119, as last amended by Decision 2016/318.

145 Under Article 134(1) 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.

146 In accordance with Article 138(1) of the Rules of Procedure, the institutions which have intervened in the proceedings are to bear their own costs. The Commission must therefore bear its own costs.

2. Orders Mr Edward Stavytskyi to bear his own costs and 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) >> Stavytskyi v Council (Ukraine - Freezing of funds - Judgment) [2018] EUECJ T-242/16 (22 March 2018) URL: http://www.bailii.org/eu/cases/EUECJ/2018/T24216.html Cite as: ECLI:EU:T:2018:166, EU:T:2018:166, [2018] EUECJ T-242/16

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