European and international law expert Otilia Vatavu, an associate of the advocacy and public policy community “WatchDog.MD”, has prepared a study entitled “Does Plahotniuc have a chance to get EU sanctions annulled?”. The expert explained how much chance oligarch Vladimir Plahotniuc, sanctioned for attempts to destabilise Moldova, has of getting EU sanctions lifted after suing the Council of the European Union.

Vlad Plahotniuc has challenged the Council’s decision to impose sanctions, including a visa ban and asset freeze, on him for destabilising Moldova. The first argument claims that significant errors were made when assessing whether there were sufficient factual elements to justify the listing of the plaintiff under the contested decision and regulation.

The second argument claims that the applicant’s rights under the Treaty on European Union (in particular Articles 6, 2 and 3) and the EU Charter of Fundamental Rights (in particular Articles 47 and 48) have been violated. In order to analyse the prospects of the challenge, it is important to first look at the relevant procedural issues and precedents established by the Court of Justice of the European Union (CJEU).

Jurisdiction of the Court

The Court has jurisdiction to review the legality of decisions imposing restrictive measures against a natural or legal person. However, it is important to note that when carrying out this review, the Court is not concerned with the facts themselves. In other words, the Court does not make any judgment as to whether or not the designation is fair, necessary or proportionate. In this respect, the Council is given a wide margin of appreciation to pursue the Union’s foreign policy interests without interference from the Court.

Instead, the CJEU focuses on whether or not the Council respects procedural rights in individual cases. These procedural rights derive from the rights of the defence and the right to judicial protection.

The right of defence entails the right to be heard and the right to have access to the file of evidence against the person concerned. The right to effective judicial protection implies an explicit statement of the reasons and concrete evidence that must be provided to the Court to enable it to rule on a particular matter.

The following section will further detail the Court’s judicial findings and refer to relevant case law.

Precedent

Access to information has been recognised by scholars as one of the major factors impeding effective judicial review of individual sanctions. This means that neither the CJEU nor the defendants have access to all relevant information relating to the case, which in turn makes it extremely difficult for the Court to rule on the merits of the case and thus exercise full judicial review. That is to say, to rule on whether the grounds relied on meet the criteria for designation and whether there is sufficient evidence to support those grounds.

In the Fulmen case, concerning individual listings in the context of sanctions against nuclear proliferation in Iran, the Court held that in cases concerning listings in the territory of a Member State, the Council must provide the Court with the relevant information to justify their designation. Thus, the Council cannot rely on classified information from the authorities of a Member State to impose restrictive measures against an individual if that Member State is unwilling to disclose this information to the EU courts. In the absence of access to this information, the Court may consider the listings to be unlawful and annul them, although there is the possibility of re-listing if the Council changes its procedure.

In another case, Islamic Republic of Iran Shipping Lines (IRISL) v Council, the Court again annulled the sanctions against the entities concerned on the basis of an error of assessment of the evidence. In this case, the Court found that the Council had not provided relevant evidence to justify listing and rejected the Council’s claim that it could not disclose the information to the Court given the classified nature of the nuclear proliferation files.

The use of confidential information affects not only the possibility of effective judicial review, discussed above, but also the rights of defence of designated entities. In this regard, the Council is obliged to provide a statement of reasons to justify designations made pursuant to UN Security Council decisions. However, in the Kadi II case, the Court found that the reasoning requirement was met in a perfunctory and formal manner, so that the defendant was not given access to the evidence against him, which constituted a violation of Mr Kadi’s rights of defence. This occurred as a result of the fact that Mr Kadi was presented with a mere summary of the statement of reasons, thus preventing him from being able to construct a convincing defence to the charges against him.

Extending the listing criteria

Due to the Court’s process-oriented approach, the Council is allowed to re-list a person or entity if the procedural aspects of a particular designation change. In particular, in the IRISL judgment, which was mentioned above, the Court specifically stated that the Council is allowed to amend the listing criteria if the existing criteria are not in line with or fail to achieve its policy objectives. This allows the Council to extend the listing criteria for a particular scheme and to have a greater margin of discretion in designating entities.

In the case of IRISL, the Council had to provide convincing evidence to support that IRISL had a direct link to nuclear or missile proliferation. This was difficult to prove because the Council could not disclose confidential evidence to the Court. Following the ruling, the Council expanded the listing criteria to cover a wider range of actors, including those who, for example, provide “support, such as material, logistical or financial support, to the Iranian government”. The expansion of the designation criteria significantly lowered the evidential threshold that the Council had to meet. The Court therefore upheld IRISL’s designation on the basis of the new amended criteria.

A study, which focuses on restrictive measures against Iran and Syria, shows that following the large number of cases lost by the Council due to insufficient evidence, the Council started to expand its designation criteria. It is important to note that this could have taken place both as a way of circumventing meaningful judicial scrutiny and as a way of putting even more political pressure on the regimes in Syria and Iraq, which was in line with the interests of the Union at the time. However, there is sufficient reason to believe that the Council’s strategy of extending the designation criteria to prevent judicial invalidation of sanctions was successful. It has significantly reduced the number of cases lost before the Court, as a mere listing of grounds would now be sufficient to justify a particular designation on the basis of the amended criteria, which, for example, require the Council to prove only a “sufficient link”.

Conclusion

While it is difficult to predict the outcome of the case, it is important to note that in recent years restrictive measures have become increasingly resistant to judicial scrutiny as a result of the increasing reliance on open source material to justify listing and the Council’s practice of formulating broader listing criteria, as explained above, as well as the increased protection of procedural rights granted to designated entities.

In addition, it is worth noting that, even in the unlikely event of a successful challenge, there is still the possibility of Vlad Plahotniuc’s re-listing, should the Council decide to modify its criteria, as has happened in the case of other listings declared unlawful by the Court in the past. However, the final outcome would depend on the specific arguments presented, the strength of the evidence and the legal interpretation of the court hearing the case.

Study by Otilia Vatavu.