knowledge 6 December 2019 |

Disputes – Investigations and White Collar Crime: Sanctions Annulled as no Verification of Compliance with Fundamental Rights

In a recent case, the General Court of the European Union has emphasised that when imposing sanctions the Council has an obligation to ensure that fundamental rights are respected.

In Klyuyev v Council of the European Union,1 restrictive measures were adopted by the EU against certain persons following the suppression of demonstrations in Ukraine in 2014. These measures were focussed on the freezing and recovery of assets of persons identified as responsible for the misappropriation of Ukrainian State funds or human rights violations. This included the applicant, the former Head of Administration of the President of Ukraine.

The restrictive measures were amended and extended from time to time. On each occasion, ongoing criminal proceedings against the applicant in the Ukraine alleging the misappropriation of public funds or assets were given as the reason for the continued measures against him.

While these measures remained in place, the Council maintained contact with the Prosecutor General’s Office of Ukraine which informed the Council of the ongoing status of the criminal proceedings against the applicant in that country.

Case before the court 

The applicant sought the annulment of the measures against him. His main argument was that the Council ought to have verified whether the Ukrainian authorities, when they decided to initiate criminal proceedings against him, had ensured that his rights of defence and effective judicial protection were protected to a degree equivalent to that guaranteed at EU level.

Instead, he said that the Council assumed, without any verification, that the Ukrainian authorities had respected the applicant’s fundamental rights. This was despite detailed evidence to the contrary provided by the applicant to the Council.

Decision of the court

The court annulled the measures. Citing Azarov v Council,2 it concluded that when the Council based the adoption or the maintenance of restrictive measures on the decision of a third State to initiate criminal proceedings for misappropriation of public funds or assets by the person concerned, the Council must ensure that the authorities of that third State had complied with the rights of defence and the right to effective judicial protection of the accused. It also said that in the decision imposing restrictive measures, the Council must refer to the reasons why it considered that the decision of the third State had been adopted in accordance with those rights. The requisite verification was not carried out here.

In addition, where the applicant had been subject to restrictive measures for several years, on account of the same preliminary criminal investigation, the Council had been obliged to explore in greater detail the question of a possible infringement of his fundamental right to have his case heard within a reasonable time.

Comment

This case emphasises the need for full review of the lawfulness of all Union acts having regard to the fundamental rights which form an integral part of the EU legal order.

  1. Case T‑305/18.
  2. C‑530/17.

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.