I. Background
As part of the response to the 2022 Russian war against Ukraine, the EU adopted the most comprehensive sanctions in its history, targeting the Russian and Belarusian economies, as well as hundreds of natural or legal persons.Footnote 1 Already in 2014, the EU had imposed sanctions on Russia in response to the escalation of the conflict in Ukraine.Footnote 2
The 2022 sanctions on which this Article focuses were first imposed at the end of February, after Putin signed a decree recognising the ‘independence and sovereignty’ of the Donetsk and Luhansk regions in Ukraine, and ordered the Russian armed forces into those areas.Footnote 3 From 23 February on, and even more following the invasion of Ukraine of 24 February, the EU has imposed comprehensive sanctions. These have been adopted, in successive waves,Footnote 4 through acts amending the 2014 sanctions and are therefore contained in the consolidated version of those acts. In the context of the war, sanctions were also adopted against Belarus.Footnote 5
The rationale of the 2022 sanctions is threefold: to damage Russia's ability to wage war by hitting its economy;Footnote 6 to protect the EU's security;Footnote 7 and to signal a strong condemnation of Russia's behaviour (the invasion of a sovereign country).Footnote 8 These aims, although largely overlapping and mutually reinforcing, are not always harmonious. They are meant to bring Russia's campaign in Ukraine to a halt, while preserving the interests of the EU, the Member States and their citizens, and at the same time minimising the negative consequences on the Russian population. Even though the genesis of the legal act is hardly relevant for the purposes of judicial protection,Footnote 9 it appears to be in this case the result of a compromise that merges disparate national security interests, private interests, and political pressures.Footnote 10 More analytically, the sanctions are variously aimed at the financial inflows to Russia,Footnote 11 its defence and security sectorFootnote 12 (prohibiting the acquisition of military technology, dual-use goods, or material and services relating to that industry), and other important areas of the Russian economy (aviation, luxury, energy, etc). The EU also sanctioned persons and entities supporting, benefiting from, or providing a substantial source of revenue to the Russian Government.Footnote 13 The sanctions against individuals target politicians, activists (including pro-Russian Ukrainians), businessmen, judges, lawyers, military commanders, and other persons or entities with links to the people in the previous categories.Footnote 14 Sanctions also prohibit, among others, the provision of architectural and engineering services and IT and legal advisory services.Footnote 15 An element of contradiction between the aim of ending Russia's war and the preservation of other EU's interests appears in the complex mosaic of rules and derogations built around energy imports;Footnote 16 or the permission, by way of derogation, to import pharmaceutical, medical, agricultural, and food products from Russia-owned entities.Footnote 17 Some sanctions—such as the censorship of certain media outlets—are also aimed exclusively at protecting the EU's security and its public order,Footnote 18 and not at damaging the Russian economy.
The 2022 sanctions are the toughest in the history of EU foreign policy in terms of intensity and scope of the prohibitions and, inevitably, they are the object of burgeoning litigation, with currently nearly one hundred cases pending before EU courts.Footnote 19 In fact, it is possible to challenge the sanctions either by lodging an action before the Court of Justice of the European Union at the conditions laid down in Article 263 TFEU or, as recognised in the landmark Rosneft case,Footnote 20 indirectly, through a preliminary ruling procedure (Article 267 TFEU) originating from an action lodged in the courts of a Member State. A successful challenge to an EU act may result in the annulment—complete or partial—of the measure, but in the case of individual sanctions the annulment will only benefit the applicant.Footnote 21 An action for damages against the EU is also available to private parties (Article 340 TFEU).Footnote 22
The litigation ‘hits’ the EU constitutional structure on a critical point: the EU's highly distinctive competence to conduct a Common Foreign and Security Policy (‘CFSP’).Footnote 23 This field is subject to ‘specific rules and procedure’ (Article 24 TEU), which concern, among others, specific institutional arrangements: executive decision making and a limited role for the Court. With this background, the role of the judiciary in CFSP is a particularly challenging one as the Court needs to ensure the application of general principles of EU law, among which the protection of fundamental rights, while preserving the specific constitutional structure of the competence.Footnote 24 This Article argues that the Court has largely succeeded in doing so in the case law on sanctions, by exercising a broad jurisdiction but a light review of proportionality. However, tensions remain in how to bind the executive to substantial constraints in addition to formal process standards.
Against this backdrop of constitutional distinctiveness of CFSP and unprecedented litigation on sanctions before EU courts, judicial activity acquires an added dimension of complexity. This Article explores selected issues of judicial protection in the area of sanctions.Footnote 25 These issues are grouped into four categories that mirror the reasoning of the Court when assessing the valifity of sanctions: elements escaping judicial review; external (or formal) legality of the measures; internal (or substantive) legality; and then the Article concludes with an assessment of the overall role of the Court in the review of the EU's diplomatic choices. Part II considers what escapes judicial review, since the jurisdiction of the Court of Justice of the European Union (‘CJEU’) is limited to reviewing the legality of ‘restrictive measures against natural or legal persons’ (Article 275 TFEU), but, as the case law clarifies, the legal acts containing them may include provisions that are not restrictive measures, so the precise contours of the Court's jurisdiction are still blurred. Part III is dedicated to procedural issues, such as locus standi to challenge the measure, and formal legality of the acts, meaning whether they were adopted in compliance with the procedures mandated by EU law, including compliance with the principle of conferral. Part IV is dedicated to the Court's role in checking the conformity of the restrictive measures with substantive rules of EU law, such as general principles, of which the protection of human rights is an integral part. The focus will be on the principle of proportionality and the right to effective judicial protection. Part V reflects on the role of the Court in EU foreign affairs and includes a comparison with the sanctions adopted, in the context of the war, by the US.
II. The Political Element of the Sanctions: What Escapes Judicial Review?
The overall strategy of the Council—targeting the oil sector, the luxury sector, the propaganda machine—is not subject to judicial review.Footnote 26 This is because the jurisdiction of the Court is limited, in principle but not in practice,Footnote 27 to scrutinise the CFSP acts only in so far as they are ‘restrictive measures against natural or legal persons’ (Article 275, second paragraph TFEU).Footnote 28 To respect that limitation, in order to identify what constitutes a ‘restrictive measure against natural or legal persons’, the Court has drawn a distinction, among the provisions contained in sanctions, between ‘measures of general application, in that they impose on a category of addressees determined in a general and abstract manner a prohibition on making available funds and economic resources to entities’ and ‘individual decisions affecting those entities’.Footnote 29 Only the second category constitutes a restrictive measure against a natural or legal person for the purposes of Article 275, second paragraph. A more technical discussion of this as applied to the 2022 sanctions is in Section III.A.1.
Why are measures of general application not subject to judicial review? To answer this question, the Court could explicitly introduce a ‘political question doctrine’;Footnote 30 but Treaties and the case law of the Court rather show a different demarcation criterion between what is and what is not a restrictive measure against natural or legal person: the effect on the legal sphere of the natural or legal persons concerned. The case law of the Court may be read as meaning that CFSP is a competence whose acts cannot on their own, that is, absent a TFEU Regulation, have legal effects on the rights of individuals but can only create obligations for EU institutions and its Member States. This is also a criterion for the delimitation of the boundaries of CFSP. Thus, a provision whose subject matter relates to the EU's external action cannot be adopted exclusively (ie without implementing Regulation) on a CFSP substantial legal bases if it has effects on a right of natural or legal persons.Footnote 31 CFSP, that is, can neither create nor remove rights for individuals: the only way for it to do so is if there is an implementing act, adopted on a TFEU legal basis: the classic example is Article 215 TFEU for restrictive measures,Footnote 32 on which the Court claimed full jurisdiction in Rosneft.Footnote 33 A similar interpretation was proposed by AG Wahl in H, where he wrote as obiter that ‘the Union is not meant, in the field of the CFSP, to adopt acts that lay down general abstract rules creating rights and obligations for individuals’.Footnote 34 AG Wahl derived that view from the wording of Article 24 TEU, which forbids the adoption of legislative acts in CFSP, but that reasoning is not convincing: legislative acts are acts adopted through the ordinary legislative procedure (Article 289(3) TFEU). The procedure for their adoption is not related to their effects. The rule that CFSP cannot affect rights of individuals can be derived, instead, from a systematic and teleological interpretation of the Treaties. Given the constitutional preference for executive decision making in CFSP, coupled with the limited role of the European Parliament and of the CJEU, there is a strong case for limiting the effect that CFSP measure may have on individuals. In that regard, it must be borne in mind that participation by the Parliament in the legislative process is the reflection, at Union level, of a fundamental democratic principle that the people should participate in the exercise of power through the intermediary of a representative assembly.Footnote 35 It follows that the European Parliament must be in a condition to exercise the powers conferred to it by the Treaties.Footnote 36 On the other hand, the Court held that if the sanctions contain sufficient fundamental rights guarantees for individuals, then this does not affect the democratic character of the EU.Footnote 37 In the context of CFSP, it is not the procedure for the adoption of an act that determines its democratic credential, but rather its content: the Council can determine the level of protection of EU interests, balancing it with fundamental rights, provided that the latter find sufficient safeguards—and the role of the Court is precisely to monitor the existence of sufficient safeguards, albeit it respects the distinctive character of CFSP in the EU constitutional structure, by leaving a wide margin of discretion to the Council for carrying out that balancing.Footnote 38
The case for establishing the Court's jurisdiction to provisions, contained in CFSP acts, that affect the rights of individuals, rests on the central tenet of the EU as a constitutional system subject to the rule of law,Footnote 39 in which no institution can adopt acts, affecting individual rights, which are subtracted from judicial review. The argument is reinforced by an exception that confirms the rule, the provision of Article 39 TEU, which is the only one in the Title on CFSP empowering the Council to lay down rules relating to the rights of individuals.Footnote 40 Regardless of the area of EU competence, the Court's honours the duty of Article 47 Charter to ensure effective judicial protection for individual rights, by adopting a broad, anti-formalistic view of what acts carry legal effects, considering several factors among which the act's content and substance, as well as to the factual and legal context of which it forms part (this test is not merely whether an act has legal effects, but a somewhat higher threshold, namely whether it affects individual rights).
Coming to another element that could escape judicial review, are the ‘association criteria’ (based on which an individual is listed by association to someone else) a matter of legal or of political choice? The Court carries out a formal review of them, related to ‘external legality’ (is the statement of reason understandable?) and it only lightly questions the substantive choice of the Council in the abstract (is it a cogent criterion?). The reasons for listing an individual are not outside the scope of judicial review. The decision of the General Court in Prigozhina confirms as much.Footnote 41 This is discussed in Section III.B.3. Suffice to state at this stage that while the Council enjoys a very wide, but not limitless political discretion to decide the abstract reasons for listing people (the Council could list people because they are politicians who voted in favour of the annexation of occupied zones, or, hypothetically, because they are members of Putin's favourite football teamFootnote 42), the Court still monitors not only the cogency in the abstract of those reasons,Footnote 43 but also whether those reasons are backed in concreto by sufficient evidence (did the listed politician actually vote in favour of the annexation? Did the footballer actually play for Putin's favourite team?). But while the listing criterion is essentially political, and the Court has the power to (and should) intervene only minimally, the concrete evidence is not, and the Court must prevent arbitrary uses of power.
Another reason to exclude the Court's jurisdiction from measures of general application is that sanctioning Russia (or Belarus, or, in fact, any other third country) is not an automatic consequence of that country behaviour, as it is not subject to triggering conditions as a matter of EU law: the choice to sanction a third country is, instead, a political choice left to the discretion of the Council. Such choice by the Council, in other words, does not rest on objective criteria amenable to judicial review. One could conceive a system in which the imposition of sanctions must be triggered automatically by some factors, such as a violation of international law,Footnote 44 but this is not how EU sanctions are fashioned because Article 28 and 29 TEU (and other CFSP legal bases) identify no definite triggering conditions.Footnote 45 This discretion left to the political institution by the Treaties is a reflection of the specific rules and procedures of CFSP: primary law, in this field, does not specify how objectives are to be pursued with the same level of detail as in the case of some internal competences. Instead, the terms of the balancing of public interests and fundamental rights to be incorporated in an act of secondary law are left to the Council in such an open way that, even if the Court were to intervene, its role could only be minimal.Footnote 46 The lack of definite triggering conditions also entails that there is no requirement that the UN Security Council has endorsed the EU sanctions, nor that the UN Security Council has adopted sanctions of its own for the Council to validly adopt restrictive measures.Footnote 47 From an efficiency and effectiveness perspective, this is commendable as it enables the EU to use sanctions as political leverage. The EU fundamental Treaties, through the rules on CFSP and on the conclusions of international agreements, put the EU and Member States' diplomats—not the judiciary—charge of bargaining with Russia, a bargaining that is more effective if it contemplates the opportunity to lift sanctions in exchange of concessions by Russia, and to reintroduce them in case of non-compliance by Russia with those concessions (this is the so-called ‘snapback’). The Joint Comprehensive Plan of Action of 2015 (the so-called Iran ‘nuclear deal’) negotiated by the permanent members of the UN Security Council and Germany included the opportunity to re-introduce sanctions in case of non-compliance.Footnote 48 The opportunity of a ‘snapback’ of sanctions can be codified in a deal with Russia, as it was in the Iran nuclear deal, where it was foreseen that ‘an “EU snapback” will take the form of a decision by the Council of the European Union, based on a recommendation by the High Representative of the European Union for Foreign Affairs and Security Policy, France, Germany and the United Kingdom. Such a decision will reintroduce all the EU sanctions taken in connection with the Iranian nuclear programme that have been suspended and/or terminated […], and in accordance with regular EU procedures for the adoption of restrictive measures’.Footnote 49 To preserve legal certainty, the snapback ought not have retroactive effect, meaning that contracts concluded between the lifting of sanction and the snapback would not be affected. In this regard, it is anyways debatable whether these are merely ‘restrictive measures’, since they seem to rather herald a policy shift. The EU loses leverage if the sanctions, rather than being temporary, merely accompany a choice not to rely on Russian energy ever again.Footnote 50 This may entail that the sanctions present issues of legal basis, discussed in Section III.B.1.
Although, as highlighted, the EU can lawfully adopt sanctions even when there is no violation of international law, the EU has nonetheless used strong language to characterise the actions of Russia as a gross violation ‘of international law and the principles of the United Nations Charter and undermining European and global security and stability’,Footnote 51 and, the so-called disinformation campaigns targeting EU citizens are defined as ‘a significant and direct threat to the Union's public order and security’.Footnote 52 This suggests that the Council does wants to ground the imposition of sanctions in a violation of a rule of international law, that is, ultimately, to a violation of an EU value:Footnote 53 since the proportionality of a measure is also assessed by reference to the importance of its objective, it stands to reason that the EU highlights the magnitude of the Russian offence. It has done so both unilaterally (i.e. through the language used in the sanctions), and multilaterally (ie by supporting international courts in investigating alleged violations of international law committed in UkraineFootnote 54).Footnote 55
The end of the conflict does not entail the automatic end of the sanctions. In the case of censorship against Russia-sponsored media outlets, the Recital of the act provides that ‘these measures should be maintained until the aggression against Ukraine is put to an end, and until the Russian Federation, and its associated media outlets, cease to conduct propaganda actions against the Union and its Member States’.Footnote 56 These may relate to the proportionality of the measure (that must not go beyond what is necessary to achieve its aimFootnote 57), but as there is no triggering condition, so the there is no condition which, if fulfilled, imposes a duty on the EU to lift the sanctions.
It is submitted that in any case the Council cannot disregard rules derived from international law or general principles of EU lawFootnote 58 regardless of whether fundamental rights of individuals are affected. In the Smart sanctions case, the Court explicitly stated as much: ‘it is to be noted that the duty to respect fundamental rights is imposed, in accordance with Article 51(1) of the Charter of Fundamental Rights of the European Union, on all the institutions and bodies of the Union’,Footnote 59 thus, it made no distinction between the Union's institution acting under CFSP or another competence. This entails that there are cases in which a substantial review ought to be carried out because the decision should not be left to unfettered political discretion. For example, a sanction cannot be imposed in violation of rules of international law binding on the EU. Thus, the EU includes exemptions for the provisions of legal aid, thus giving effect, among others, to Article 6 ECHR. The confiscation of Russian assets subject to sanctions would also need to be assessed in the light of its compliance with rules of international law. Considering instead a purely hypothetical scenario, it ought to be excluded that the Council could impose sanctions—which would be in violation of rules codified in the Geneva Conventions of 1949Footnote 60—against an organisation that provides humanitarian assistance to Russian troops. This is admittedly difficult to square with the letter of Article 275 TFEU, but it is perfectly in line with the case law of the Court. The provision must be read in its context, where it is an exception to the rule that the Court has jurisdiction in areas covered by the Treaties, and must therefore be interpreted narrowly.Footnote 61
III. Jurisdictional Requirements and External (or Formal) Legality
A. Jurisdictional and Procedural Requirements
1. Locus standi
A natural or legal person has locus standi to annul regulatory acts that are of direct concern to it, or provisions of direct and individual concern to it, or measures addressed to it (Article 263 TFEU fourth paragraph).Footnote 62 Legal persons include third countries, as the Court established in Venezuela.Footnote 63 This finding in the Venezuela judgment enables Russia, Belarus, and even—hypothetically—Ukraine to challenge the restrictive measures. The challenge would not be admissible against all the provisions in the sanctions, but only against those fulfilling the conditions of Article 263 fourth paragraph TFEU.
As mentioned, that paragraph distinguishes three cases. First, regulatory acts of direct concern to a natural or legal person. The Court has established that a regulatory act refers to acts of general application and does not include legislative acts.Footnote 64 Restrictive measures are non-legislative acts: a CFSP Decision cannot be a legislative act, as Article 24 TEU precludes it. A TFEU Regulation based on Article 215 TFEU, which is adopted under the non-legislative procedure laid down in that provision, cannot be regarded as a legislative act either.Footnote 65 It follows that if restrictive measures are of general application, meaning that they have a ‘general scope’ and affect the applicants by reason of their objective status,Footnote 66 then they are regulatory acts. Hence, provided that other procedural requirements were met, Russia could challenge measures prohibiting sales, supplies, transfers etc ‘to any natural or legal person, entity or body in Russia’.Footnote 67 A regulatory act is of direct concern if it does not entail implementing measure.Footnote 68 This presumably entails that a CFSP Decision cannot be of direct concern, but only a TFEU Regulation can. It would otherwise be difficult to reconcile the contradictory findings in Rosneft (where the measure of general application in a CFSP Decision was deemed to be outside the Court's jurisdictionFootnote 69) and in Venezuela (where a similarly worded measure in a TFEU Regulation was considered a regulatory act of direct concernFootnote 70).Footnote 71
Second, acts of direct and individual concern, and third, measures addressed to natural or legal persons. These can be considered together. Although, pre-Lisbon, in Kadi the Court appeared to distinguish between the addressee of a sanction and someone directly and individually concerned by the sanctions,Footnote 72 it is clear that a person who is listed in an Annex has standing to challenge the measure is so far as it applies to them (it is not necessary to establish whether they can do so because they are addressees of the measure, or whether they can because they are directly and individually concerned by it). Many among these individuals have already lodged actions for annulment before the General Court. One could expect some reluctance from EU legal persons to challenge sanctions, in principle: yet, this has already happened (for example in RT France or in cases involving lawyers’ associationsFootnote 73).
2. Time limitations
Most of the 2022 sanctions are adopted via amendments to the ‘basic acts’, namely to the Decisions and implementing Regulations which constituted the 2014 sanctions. Formal changes (such as a change in the number of a provision) in a challenged act that occur after an application has been lodged can be dealt with by merely amending the petitum, in the interests of procedural economy and the proper administration of justice.Footnote 74 But what about changes of substance? This raises the question of whether a new right of action arises every time the act is amended. The case law clarifies that w here a provision in an act is amended, a fresh right of action arises, not only against that provision alone, but also against all the provisions which, even if not amended, form a whole with it’.Footnote 75
The test is therefore to ascertain what provisions ‘form a whole with’ a new provision. A restrictive view is that only when the new provision (Article B) interacts with the previous one (Article A) by way of explicit renvoi then rises a fresh right of action with regard to Article A. This entails that the time limitation of (in principle) 2 months to challenge Article A starts anew upon publication of Article B.Footnote 76
The permissive view is that an old provision forms a whole with a new provision any time the rationale or scope of the old provision is affected, even in the absence of an explicit renvoi. This is too broad because one could then challenge the totality of the original 2014 sanctions every time they are amended, even several years later, but this result cannot be accepted: the restrictive view is to be preferred if there is to be no circumvention of the time limitations set by the statute of the Court.
B. External (or Formal) Legality of the Sanctions
1. Legal basis
The principle of conferral guarantees that ‘the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. Competences not conferred upon the Union in the Treaties remain with the Member States’.Footnote 77 As Lenaerts and Gutierrez Fons explain, this is a safeguard that vertical federalism provides to individual liberty, as it ensures that that ‘the different governments will control each other’.Footnote 78 The principle of institutional balance, in accordance to which ‘[e]ach institution shall act within the limits of the powers conferred on it in the Treaties, and in conformity with the procedures, conditions and objectives set out in them’Footnote 79 is the horizontal correlative, protecting individual liberty horizontally (‘each [government] will be controlled by itself’).Footnote 80 This is why the Court monitors that EU acts are adopted pursuant to the correct ‘legal basis’—in other words, the Court ensures both that the EU had the power to adopt a measure (principle of conferral) and that it did so in accordance with the procedural requirements established in the Treaties (principle of institutional balance). The need for this scrutiny is ‘reinforced’ in the area of CFSP, where Article 40 TEU (with Article 275 TFEU) confers jurisdiction to the Court to monitor the mutual non-affectation of CFSP competences and other EU competences.
So far, the Court has never found a breach of Article 40 TEU. It has taken a broad view of what can be adopted on the basis of Article 28 and 29 TEU: asset freezes, travel bans, import bans, etc.Footnote 81 In Rosneft, it found that the challenged provisions of the 2014 sanctions did not breach Article 40 TEU despite being very detailed. The Court reasoned that the fact that the CFSP Union's position was very detailed did not mean, eo ipso, that it encroached on the EU's regulatory implementing procedure (Article 215 TFEU), especially if there was a high degree of technicality involved.Footnote 82 The correctness of the legal basis of a Union's act, in other words, does not depend on how detailed the act is. As per settled case law, instead, the legal basis is determined by objective criteria that are amenable to judicial review, which include the aim and content of the measure.Footnote 83 However, the ‘level of detail’ of a measure is, arguably, an aspect of its ‘content’. The Court did not explicitly draw any distinction between these two concepts, but the case law seems settled on the fact that a CFSP Decision which contains all the details of the restrictive measure (and which is therefore identical to a TFEU Regulation) is not of its own a reason to invalidate that Decision.
The actions lodged against the 2022 sanctions contain many challenges relating to the appropriateness of the legal basis,Footnote 84 and it cannot be excluded that some sanctions may ‘encroach upon the Union's legislative competences’,Footnote 85 meaning that they may breach Article 40 TEU. The examples of sanctions adopted to fight disinformation, and of those de facto pursuing energy policy, will be briefly discussed.
In RT France,Footnote 86 the General Court endorsed the Council's choice to rely on Article 29 TEU to impose a ban on broadcasting for a number of Russian-sponsored media outlets. The notion of ‘the Union's position’ in that Article can be interpreted broadly to include, among restrictive measures, also censorship. This is in line with the previous case law, in which the Court confirmed that travel bans (in addition to asset freezes or other economic measures) can validly constitute restrictive measures.Footnote 87 This broad reading may be difficult to reconcile with the requirement, in Article 215 TFEU, that restrictive measures consists in the interruption or reduction of ‘economic and financial relations’ with a natural or legal person. Censorship and travel bans are neither necessary nor sufficient to interrupt ‘economic and financial relations’ (this practice of the Council is challenged for example in the currently pending Timchenko case, in which the applicant argues that a CFSP act cannot have effect of restricting free movement, and that an internal market legal basis is necessary insteadFootnote 88). In RT France, the General Court could have argued in greater detail for why foreign policy competences are more suitable than internal market competences (and the ordinary legislative procedure) to address the challenge of disinformation. Alternative legal bases like Article 53 TFEUFootnote 89 or Article 114 TFEU might have deserved closer scrutiny. The choice to rely on a CFSP legal basis also affects the role of the European Parliament, because it severely limits its influence in the decision-making process.Footnote 90
In the case of energy, the sanctions against Russia pursue the EU policy to diversify Europe's sources of energy, to ensure energy security through solidarity and cooperation between EU countries and to improve energy efficiency and reduce dependence on energy imports. In particular, the combination of rules and exceptions related to energy products in Regulation 833/2014Footnote 91 pursue an energy policy in which the Council tried to balance the Union's security of supply, energy efficiency, and the functioning of an internal energy market. The pursuit of energy policy through sanctions is innovative, indeed almost experimental. There are other legal bases in the Treaties that, as the discussion below shows, appear to be more suitable. As the Court clarified in a case concerning precisely energy, the choice of legal basis does not depend ‘on the legal basis used for the adoption of other European Union measures which might, in certain cases, display similar characteristics’.Footnote 92 It must be based on other objective factors, including the aim and content of that measure’.Footnote 93 Those factors will determine the outcome of what the Court calls ‘centre of gravity test’ for the choice of the correct legal basis. It is true that, with regard to a measure that simultaneously pursues a number of objectives, or that has several components, which are inseparably linked without one being incidental to the other, the Court has held that, where various provisions of the Treaty are therefore applicable,Footnote 94 such a measure will have to be founded, exceptionally, on the various corresponding legal bases, but this does not hold in cases where different voting rules for the adoption of acts are involved (such as when CFSP is involved).Footnote 95
An alternative, and arguably more appropriate legal basis is Article 194(2) TFEU. Article 194 TFEU provides in paragraph 1, that EU policy on energy is to aim, in a spirit of solidarity between Member States, to ensure the functioning of the energy market, ensure security of energy supply in the EU, promote energy efficiency and energy saving and the development of new and renewable forms of energy and promote the interconnection of energy networks. Under the first subparagraph of Article 194(2) TFEU ‘[w]ithout prejudice to the application of other provisions of the Treaties’, the Parliament and the Council are to establish the measures necessary to achieve those objectives by acting in accordance with the ordinary legislative procedure provided for in Article 294 TFEU, in the context of which the Parliament participates fully in the procedure. The ‘other provisions of the Treaty’ do not refer to CFSP: as the Court has held, they refer to more specific provisions related to energy, such as, among others, Articles 122 TFEU and 170 TFEU, concerning severe difficulties arising in the supply of energy products and trans-European networks respectively.Footnote 96
The aim and objectives of Regulation 833/2014 mostly relate to the maintenance of international security for the following reasons: in terms of contents, most of the provisions relate to the interruption of economic relations with Russia, so that if a quantitative criterion were to be applied,Footnote 97 the content of the measures do gravitate toward CFSP rather than energy policy. It would need to be established that the pursuit of objectives related to energy is merely ‘incidental’ to these sanctions. In the case of a Regulation providing for the implementation of a common framework for the notification to the Commission of data and information on investment projects in energy sectors, the Court held that the measure related to energy policy and not to the information gathering powers of the Commission recognised by Article 337 TFEU. The decisive factor, in that case, was that ‘the collection of information introduced by the contested regulation can only be justified by an objective consistent with achieving some of the specific tasks entrusted to the European Union by Article 194(1) TFEU, concerning the energy policy’.Footnote 98 In the case of Regulation 833/2014, the same conclusion cannot be reached. The measures can be justified by objectives other than energy policy, namely the maintenance of international security.
Yet, this does not mean that energy policy is a merely incidental objective of the sanctions. In fact, even though the provisions relating to energy do not regulate the matter in great detail, they clearly pursue the objectives of Article 194(1)—security of supply and energy efficiency—at least as much as those relating to the maintenance of international security. The energy-related provisions of the sanctions pursue also the first and third objectives of the Energy Union (diversify Europe's sources of energy and improving energy efficiency). But even if energy policy is a merely incidental aim of the sanctions, it is not straightforward that Article 40 TEU mandates the application of a traditional ‘centre of gravity test’ to an asymmetric situation such as the choice between CFSP and energy policy,Footnote 99 since the latter foresees the involvement of the European Parliament as democratic institution representative of the people.Footnote 100 Since the European Parliament must be in a condition to exercise the powers conferred to it by the Treaties,Footnote 101 this could lead to a preference for TFEU legal basis where an act does not pursue a TFEU policy in a merely incidental way.Footnote 102
2. Compliance with international law: The case of secondary sanctions and extraterritoriality
In term of competence, could the EU lawfully impose secondary sanctions? Secondary sanctions are those imposing penalties on persons outside an entity's jurisdiction: a classic example of primary sanctions is when entity A sanctions country B by preventing entities in A from contracting with those in country B; to further isolate B's economy, country A may also impose sanctions on country C by forbidding entities in C from contracting with entities in B (those by A against C are secondary sanctions). The US routinely imposes secondary sanctions, whereas the EU adopted in the 1990s a ‘blocking statute’ to protect EU entities from the adverse effect of those US extraterritorial sanctions.Footnote 103 Now the situation is different from how it used to be then, and the EU itself may wish to adopt secondary sanctions (this time, in alignment with the US). Given the broad powers of the Council under Article 28 and 29 TEU, the validity of EU secondary sanctions ultimately depends on their validity under international law binding on the EU (the EU having already adopted other measures with extraterritorial applicationFootnote 104).Footnote 105 The enactment of extraterritorial legislation appears to be prohibited by international law, although the precise scope and content of this prohibition are hard to identify.Footnote 106 There are some permitted grounds for extraterritoriality,Footnote 107 and indeed international law may impose extraterritorial duties on states.Footnote 108 One could argue that, since one objective of EU external action is to ‘consolidate and support democracy, the rule of law, human rights and the principles of international law’,Footnote 109 its pursuit justifies, in the absence of a clear prohibition under customary international law, the imposition of secondary sanctions or anyways of extraterritorial obligations.Footnote 110 In the preamble of the blocking statute, however, the EU had taken the view that extraterritorial sanctions ‘violate international law’.Footnote 111
One could take the view that the EU has in fact adopted secondary sanctions.Footnote 112 The most recent example at the time of writing is provided by the EU's decision to freeze assets of companies that are neither EU nor Russia based (they are registered in China, Uzbekistan, and other third countries instead). For these companies, there are two different designation criteria which ought to be kept distinct.
In the first case, the measures adopted by the EU require a direct link with an EU-based natural or legal person: the third country companies in question are only sanctioned in so far as they are ‘facilitating infringements of the prohibition against circumvention of the provisions of’Footnote 113 the Russia sanctions. Their validity under international might be questionable (although they are not secondary sanctions under the definition provided above). But while there is an element of extraterritoriality, this appears to be nonetheless justifiable in light of the requirement that there be a substantial connection with EU jurisdiction (if there is ‘circumvention’, then there must be a substantive EU rule involvedFootnote 114). The extraterritorial element is nonetheless in contrast with the principles of EU sanctions design,Footnote 115 and, more starkly, with the view expressed in the blocking statute that extraterritorial sanctions ‘violate international law’.Footnote 116
In the second case, however, any substantial link with the EU evaporates: sanctions are imposed against third country companies because they are ‘significantly frustrating’ the sanctions.Footnote 117 The sanctions therefore aim at regulating the conduct of operators entirely outside the EU's jurisdiction. While this may be admissible under EU law, it may not be possible under international law (and certainly not in line with ‘international comity’, a principle which, former AG Hogan suggested,Footnote 118 ought to inspire EU foreign policy).
3. Statement of reasons
Like any EU act, restrictive measures need to provide reasons for their adoption. In Kiselev, Footnote 119 the General Court held that the obligation to state reasons on which an EU sanction is based is an essential procedural requirement, to be distinguished from the question whether the reasons given are well founded, the latter question pertaining instead to the substantive legality of the contested act.Footnote 120 The obligation to state reasons, corollary of the right of the defence, is enshrined in Article 296(2) TFEU and, according to established case law,Footnote 121 it has a twofold purpose. Firstly, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the EU courts. Secondly, to enable those courts to review the legality of that act.Footnote 122 For this reason, the GC has established that addressees of EU sanctions are entitled to obtain, as far as feasible, the evidence used against them when receiving notification of the imposition of the sanction.Footnote 123
These formal requirements are easy to satisfy, and the Court is very light in the review of the cogency in the abstract of the listing criteria. Rightly so, since the criterion for sanctioning someone is a matter of political discretion of the Council—and since the protection of fundamental rights can be monitored at a different stage, namely when considering whether the evidence relied on by the Council is sufficient to support at least one of the listing criteria. The Court has intervened more in the area of listing ‘by association’ (that is, when people are sanctioned by virtue of being associated with someone, rather than because they have materially done something). A test offered by the case law on what makes an association criterion ‘cogent in the abstract’ is the requirement in Tay Za that restrictive measures listing a group of individuals should be directed ‘only against the leaders of such countries and the persons associated with those leaders’;Footnote 124 in Tomana the Court further specified that a family association link with the leaders is not, of its own, sufficient (not even in the abstract) to justify listing.Footnote 125 The recent judgment in Prigozhina adds an important specification, namely that test for a valid association is that the listed persons and the leaders are generally linked by common interests (‘sont de façon générale liées par des intérêts commun’Footnote 126). The 2014 and 2022 sanctions seem to satisfy the Tay Za rule even when they target judges,Footnote 127 human rights defenders,Footnote 128 or members of electoral commissionsFootnote 129—that is, people who are not Russia's ‘leaders’ but whose association with them (whose ‘commonality of interests’) could be substantiated as a matter of fact: but this is, as mentioned, a question of evidence or ‘internal legality’ and will therefore be discussed in the relevant Section.
IV. Substantive Requirements or Internal Legality
The discussion in the previous Part concerned the compliance of sanctions with formal or procedural requirements, whereas this Part is dedicated to the compliance of sanctions with substantive rules of EU law. Individual freedom is protected by the Court, against possible abuses by EU institutions, by means of the general principles of EU law (of special relevance are the principles of proportionality, legal certainty, and non-discriminationFootnote 130), which include the protection of fundamental rightsFootnote 131 (of special relevance are the right to effective judicial protection, property, and family lifeFootnote 132).
A. Proportionality
The scrutiny of the proportionality of a measure entails, in the case of sanctions, a light review of the suitability of the measure but a more intrusive scrutiny of their necessity when the right of defence is invoked.
When it comes to suitability, the Court has shown much deference to the Council and has been prepared to recognise that the ‘primordial importance of maintaining peace’Footnote 133 is an overriding objective, for the attainment of which only ‘manifestly inappropriate’ (the Kala Naft test) measures would be struck down. In Kala Naft, the Court found that the EU could target the Iranian oil and gas sector by restricting the applicant's fundamental rights to property and to conduct a business (through a complete asset freeze), in the light of the seriousness of the reports concerning the Iranian nuclear programme and the need to maintain international security (without scrutinising whether less restrictive alternatives were available). It reached that conclusion by reasoning that ‘the European Union legislature must be allowed a broad discretion in areas which involve political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. It concluded from this that the legality of a measure adopted in those fields can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue’.Footnote 134 On the necessity, it can be stated already at this stage that, when it comes to the interference with fundamental rights, the General Court has already had the occasion to state that less restrictive alternatives to an asset freeze (such as a requirement for prior authorisation or for later justification) would not be sufficiently effective.Footnote 135
This is how the Court respects the ‘specific rules and procedures’ (Article 24 TEU) of the field of CFSP. These characteristics, as Opinion 2/13 clarifies, are a reflection of the autonomous sovereign choice of the EU legal order to entrust the pursuit of its objectives to various policies governed by their ‘own particular characteristics’.Footnote 136 In particular, the constitutional structure of CFSP is such that it is objectives-driven, and is not defined, as it happens in the internal sphere, by policies detailed in the Treaties.Footnote 137 It was mentioned that there is a link, identified by Lenaerts and Gutierrez Fons, between the principle of conferral, institutional balance, and the protection of individual freedom. The light application of the principle of proportionality by the Court in the review of sanctions is a manifestation of that link: the discretion left to the Council depends ultimately on the way the legal basis is formulated. Unlike what happens in other areas of EU competence, the terms of the balancing between the pursuit of public interests are left entirely to the Council. By way of example, Article 65(1) TFEU allows for derogations from EU rules on free movement of capital by specifying the ground on which Member States may do so. Similarly, Article 72 TFEU states that the powers of the EU in the Area of Freedom Security and Justice ‘shall not affect the exercise of the responsibilities incumbent upon Member States with regard to the maintenance of law and order and the safeguarding of internal security’. These provisions provide concrete benchmarks (because they define the interests) that the legislator must take into account when acting in those policy areas.Footnote 138 Nothing of this kind exists for CFSP, leaving the very terms of the balancing to the discretion of the Council.
This has the consequence that the Court does not intervene in themes of substantial governance when it comes to CFSP,Footnote 139 as anyways explicitly mandated in Article 24 TEU and 275 TFEU which limit the Court's jurisdiction. But even when the Court does have jurisdiction, in light of the abovementioned discretion generally left to EU political institutions (in the context of CFSP, the Council), the Court has repeatedly stated the well-established formula that ‘the legality of a measure adopted in those fields can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue’.Footnote 140
The Court's scrutiny will therefore be limited just to monitoring that an act is not manifestly inappropriate—and this is so in light of the overriding political and security objectives of CFSP. More than proportionality, indeed, the Court seems to adopt a lenient test of mere ‘reasonableness’. The Rosneft saga is instructive. In the first ever preliminary ruling delivered in the context of a CFSP sanction, the Court found a ‘reasonable relationship between the content of the contested acts and the objective pursued by them’.Footnote 141 Later, the General Court went into further detail on the suitability (they use the term rationality) of the 2014 sanctions targeting the Russian oil sector for the attainment of their objective: ‘there is […] a rational connection between the targeting of undertakings in the Russian oil sector, on the basis notably of their estimated total assets of over RUB 1 trillion, in view of the importance of that sector for the Russian economy, and the objective of the restrictive measures in the present case, which is to increase the costs of the Russian Federation's actions to undermine Ukraine's territorial integrity, sovereignty and independence, and to promote a peaceful settlement of the crisis’.Footnote 142 What does this mean for the 2022 sanctions? While the suitability (or rationality) of each provision must be checked against the objectives pursued by the sanctions, there is a strong indication that the benchmark of the validity of the 2014 sanctions on these grounds signal that the 2022 sanctions will hardly be found to be not suitable in the abstract to achieve the objectives of halting Russia's war.
Another way in which the Court respects the discretion left by primary law to the Council is by shielding the EU legal order from international law. As the ECJ had held in Bank Melli that, since proportionality is distinctive to the EU legal order, a UN Security Council Resolution cannot be a ground against which to assess the proportionality of an EU act.Footnote 143 Repeating the argument of Kadi, in Ayadi and Hassan,Footnote 144 the ECJ found that EU acts shall be reviewed ‘in the light of the fundamental rights forming part of the general principles of’ EU law; it therefore set aside the GC judgment which only reviewed the restrictive measures in light of jus cogens. By subtracting external influences on the principle of proportionality, the CJEU strengthens, at least formally, the discretion left to the EU decisionmakers. The fact that proportionality is a soft ground for review does not, however, mean that the Court does not review the reasons for the adoption of acts. As mentioned below, with a view to protect fundamental rights, the Court has been more intrusive in its review when the right of defence was invoked.
B. Article 47 Charter
Quantitatively, the most invoked aspect of the right to effective judicial protection in the context of sanctions concerns the motivation for the listing of natural or legal persons. Article 47 Charter, providing the right to an effective remedy, requires the EU courts to ensure that a decision which affects a person individually is taken on a sufficiently solid factual basis.Footnote 145
In Prigozhina, one of the first 2022 sanctions cases decided on the merits, the mother of the man that used to be responsible for the operation of the Wagner Group (a band of mercenaries active, among others, in Ukraine) was listed as she was the owner of a company in a group owned by her son. As a matter of external legality, that statement of reasons is sufficient to justify the listing. What the Court scrutinises is merely the formal correspondence of the evidence of the Council with the statement for the listing provided by the Council itself.Footnote 146 In Prigozhina, however, the applicant was listed on factual allegations that were proven incorrect. When the Court considered the accuracy in concreto of the facts presented by the Council, it found that as a matter of fact the mum of Prigozhin used to be the owner of a company, but she was not at the time of the imposition of sanctions.Footnote 147 Similarly, in the interim order of the General Court in Mazepin,Footnote 148 sanctions were suspended because the Council used outdated evidence, which could not justify the listing criterion. In both cases, the measure had to be annulled with regard to the applicant (or suspended), because, since the Council could not prove that the persons fulfilled the main listing criterion, no other commonality of interests could be found to substantiate the association between Prigozhina and her son,Footnote 149 or between Mazepin and his father, other than the family relationship.
In Prigozhina, the General Court appears to merge the external review of legality (the abstract validity of the association criteria) with the internal review. However, it is submitted that they ought to be kept separate, and that the court should monitor the association as evidenced by the Council, not the validity of the criterion in the abstract. The question of whether a mother and a son (or a father and a son) are sufficiently ‘associated’ to justify sanctions should not be a question for Courts to determine, because it is the Council's prerogative to conduct foreign policy by putting pressure in the way they deem fit on the Russian leaders—it is, instead, a factual question: do these people share common interests, and how can the Council prove that they do? When the General Court refers to the existence of ‘economic or financial links or a commonality of interests’,Footnote 150 it ought to monitor matter of facts (the existence of such common interests can be ascertained objectively). Obviously, the factual determination that two people have common interests (which, in the formulation of the General Court, appears to be different from merely economic or financial ones) requires a degree of arbitrariness: should they be common political interests, contingent, long term, or what else? The Court ought to monitor precisely that the Council does not uses power arbitrarily by exceeding the limits of its discretion.
The Court also considers whether the Council commits a manifest error of assessment of the evidence. In OMPI, a case decided pre-Lisbon, the Court repeated the usual formula that EU institutions enjoy a broad margin of discretion and held that ‘because the [EU] Courts may not […] substitute their assessment of the evidence, facts and circumstances justifying the adoption of such measures for that of the Council, the review carried out by the Court of the lawfulness of decisions to freeze funds must be restricted to checking that the rules governing procedure and the statement of reasons have been complied with, that the facts are materially accurate, and that there has been no manifest error of assessment of the facts or misuse of power’.Footnote 151 This OMPI test was derived not from other EU policies (as the Kala Naft test of manifestly disproportionate measures’ was), but from the case law of Strasbourg.Footnote 152 That limited review applies, especially, to the assessment of the appropriateness of the evidence on which such measures are based.Footnote 153 The CJEU held that Article 47 Charter, providing the right to an effective remedy, requires the EU courts to ensure that a decision which affects that person individually is taken on a sufficiently solid factual basis.Footnote 154 That entails a verification of the factual allegations 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. On the contrary, it must check 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.Footnote 155 What is sufficiently specific and concrete will be subject to a case-by-case assessment. The Court needs to strike a balance between the level of abstraction that information based on intelligence will have, and the right of defence of applicants to concrete information. This may be particularly complex if the Council does not want to share the evidence it relied upon, or cannot do so because derives from another source (such as the UN or a third country).Footnote 156
So what is a ‘manifest error of assessment’? The case law on the 2014 sanctions provides guidance. In Azarov, the ECJ held that a manifest error of assessment was the reliance of the Council, for the renewal of sanctions, on judicial authorities of Ukraine without checking that they had respected the right to effective judicial protection and the right of defence of the addressee of the measures.Footnote 157
The use of a presumption is permissible, but its strength is in reverse correlation to a listed person's proximity with power: the more tenuous the link to the political leadership and formal institutions of the country, the more specific the Council needs to be to justify the listing. This means that not in all cases individual, specific and concrete reasons why restrictive measures are imposed on the applicant will be necessary. But the further the Council goes from the ‘hard core’ of the targeted country,Footnote 158 the more specific the criteria will be, lest it incur in an inversion of the burden of proof.Footnote 159 The 2022 sanctions introduce an irrebuttable presumption that governmental entities and public companies or bodies in Russia are implicated in the war. This appears to be consistent with the duties of the Council: the case law on the sanctions against Iran has clarified that there is no need, for example, of an explicit statement of reasons relating to the financial services offered by a Central Bank to a Government.Footnote 160 The case law on the 2014 sanctions shows that a company operating in the oil sector could be sanctioned regardless of its (direct or indirect) involvement in Ukraine;Footnote 161 but that a pro-Russian public official ought to be de-listed if no longer in power and no other links to the Russian élite remains;Footnote 162 and stringent requirements are needed in the case of private companies.Footnote 163 To err on the side of caution, the Council could have specified one by one the companies held by Prigozhina.Footnote 164
Some authors have drawn attention to the perils of leaving discretion to the Council to choose association criteria which may reflect biased policy choices, especially considering the degree of stigmatisation that sanctions carry.Footnote 165 Another line of criticism concerns the risk of arbitrariness: ‘depending on the wording of the sanctioning text, similar factual situations may lead to a different requirement of motivation’.Footnote 166
Other aspects of effective judicial protection concern the right to access to justice and the right to be heard.Footnote 167 On the first, the 2022 sanctions introduced explicit derogations for transactions allowing for legal representation (and, more broadly, for any proceedings, including arbitration).Footnote 168 This is not dissimilar to what happens in the US: all current US sanctions programmes authorise the legal representation of sanctioned parties in US litigation and US administrative proceedings (but typically not in litigation proceedings outside the US).Footnote 169
On the second, it shall be recalled that the right to be heard in all proceedings, laid down in Article 41(2)(a) of the Charter, is inherent in respect for the rights of the defence, and guarantees every person the opportunity to make known his or her views effectively during an administrative procedure and before the adoption of a decision in relation to that person that is liable to affect his or her interests adversely. This entails that listing in sanctions must be notified individually, if possible.Footnote 170 In addition, the case law acknowledges that the right to a hearing may be limited if the urgency of the procedure necessitates it.Footnote 171 In the case of asset freeze, prior notification would defy the purpose of the measure.Footnote 172 By applying that case law, in RT France the General Court found that a hearing was not necessary,Footnote 173 but the two situations (a person whose assets will be frozen or a media company subject to censorship) are not really comparable: the former can move assets to another jurisdiction, whereas in the latter case there is no urgency. This line of case law shows the tensions between imposing substantial constraints to the Council while preserving the effectiveness of EU law.
V. The Role of the Judiciary in EU Sanctions
The EU is not the only one to have imposed sanctions, and zooming out to the US, its main ally in this war, is fruitful to reflect on the relationship between judiciary and executive in foreign affairs. This is the case both because questions of judicial protection arise in that jurisdiction as well, and because, in the US, theoretical reflections on the role of apical courts in a constitutional system have matured over centuries. The sanctions adopted by the US include embargoes against areas in Ukraine that Russia annexed or recognised as ‘independent’, the listing of hundreds of Russian persons, and the imposition of export and import bans on certain types of goods. Other US sanctions prohibit certain Russian banks from processing payments using US financial institutions or restrict US persons’ ability to engage in transactions with the Central Bank of Russia.Footnote 174 The fact that these regimes (three, if one includes the UKFootnote 175) are significantly but imperfectly overlapping entails the need, for economic operators, to monitor compliance with several sanctions. To take one example, a Russian company might be subject to EU sanctions but not to UK or US sanctions. In such cases, it may be possible for UK (or US) persons to do business with the Russian company provided that there is no connection with a situation covered by the EU sanctions.Footnote 176 This is not to suggest that there ought to be convergence on how sanctions cases are decided across US and EU. It may be a criterion that the CJEU could take into account, because the effectiveness of EU law is a relevant consideration (as recalled again below), but questions of EU law must be answered with regard to the autonomous legal system. In particular, as the Court held in Opinion 2/13, ‘the autonomy enjoyed by EU law in relation to the laws of the Member States and in relation to international law requires that the interpretation of those fundamental rights be ensured within the framework of the structure and objectives of the EU’.Footnote 177 Different courts interpret their role differently.Footnote 178 In the US, persons subject to sanctions restrictions and other interested parties can seek to overturn designations, asset freezes or sanctions provisions through litigation.Footnote 179 The challenges can invoke violation of due process, right to travel, unconstitutional vagueness,Footnote 180 or violation of other federal law.Footnote 181 Cases challenging the government's designation, in particular, can be difficult to win because US courts are extremely deferential to the government given that it operates ‘in an area at the intersection of national security, foreign policy, and administrative law’.Footnote 182 Occasionally, a challenge to similarly worded measures can be unsuccessful in the US but successful in the EU. In the Fulmen case, an Iranian company that was listed by the EU (and, as a consequence of a deal to that effect, by the US) successfully challenged the measure in EU courts, obtaining an annulment. Despite this annulment, US courts held that that the US competent body's rejection of the applicant's de-listing request was not arbitrary, given the substantial record and the ‘extreme deference’ owed to the government given national security concerns.Footnote 183 The same could happen for Russian or Belorussian interests.
On a more theoretical side, there is disagreement on the extent to which the judiciary should decide controversies in foreign affairs. This in turns entails different questions. One is the respect of institutional balance. Hamilton considered the judiciary to be ‘the least dangerous branch’ of government for the rights enshrined in a constitution,Footnote 184 and that, as a consequence, it was also the weakest branch,Footnote 185 which could in no case pose a threat to the executive. For others, it is a question of activism or restraint: the scope of judicial review ought to be limited to disputed judicial questions, because ‘the constitutional law-makers must be allowed a free foot. In so far as legislative choice, ranging here unfettered, may select one form of action or another, the judges must not interfere, since their question is a naked judicial one’.Footnote 186 The US supreme Court has developed a (by now very controversial) political question doctrine whereby it would not intervene on purely political issues, but the case law on terrorist sanctions appear to have severely undermined the impact of that doctrine.Footnote 187 Another view is that the extent of judicial intervention depends on the allocation of powers decided by a polity, regardless of textual arguments. This means asking whether the rules of CFSP are ‘maxims of political morality, which derive whatever strength they possess from being formally inscribed in the constitution, and from the resulting support of public opinion’Footnote 188 (to use the vivid prose of Dicey)—on which courts have no power—or whether they are something more, justifying more vigorous judicial review. All of the above suggest that the question is not merely one of judicial involvement. What is at stake is more broadly the role of courts in helping other institutions in drawing the boundaries of what is permitted under the principle of conferral and other general principles of EU law.Footnote 189
The case law provides a general indication of how EU courts have interpreted their role in this area. The ECJ has guaranteed extensive protection procedurally, including by taking a broad view of the scope of its jurisdiction. By contrast, it has been by and large very deferential to the choices of the Council as a matter of substance. Although access to EU courts is costly and complex, the review of sanctions—and the many annulments in which it resulted—offers meaningful redress also for third country nationals, even though no damages have ever been awarded for wrongful inclusion in a sanction. In the context of sanctions, litigation has regarded a conflict between fundamental rights and EU public interests, and not, formally, between fundamental rights and national interests,Footnote 190 because the challenges are to EU measures as opposed to national ones. If litigation was to involve national law in the future, it is not inconceivable that the ECJ might weight fundamental rights differently when these are pitted against one national public interest than when (more than the sum of?) the interests of 27 countries is at stake. Admittedly, it is difficult to tell procedure and substance apart. Adherence to formal process standards in the designation criteria for individuals entails a substantive assessment of evidence. In order to respect the (minimalistic) role that the drafters of the Treaties have carved for the Court, it endeavoured to separate conceptually the statement of reasons by the Council and the evidence presented by it. It keeps the review of the former to a minimum, and scrutinises the latter in more detail. The result is a constitutional dialogue in which the Court has largely succeeded in striking a delicate equilibrium between offering some protection of individual rights and not overstepping the ‘horizontal’ limits imposed upon it by the Treaties and the principle of institutional balance, and the interlocutor, the Council, learns to adapt its sanctioning practice which is in turn tested against through litigation. In this, the dynamic is remindful of what the Court does in competition law,Footnote 191 public procurement,Footnote 192 or in matters relating to board of appeals of agencies,Footnote 193 where the judicature will not substitute itself to EU institutions, but leaves them instead a broad margin of discretion in matters entailing complex choices, striking down only ‘manifestly inappropriate’ measures (the Kala Naft testFootnote 194) or those containing a ‘manifest error of assessment’ (the OMPI testFootnote 195). The way sanctions cases are decided bears some resemblance to what happens in other matters of EU administrative law. But the case law on this area of EU administrative law also has a ‘vertical’ dimension. When deciding questions of legal basis, the Court is in fact increasingly shedding light on the twilight zone at the intersection between the CFSP and national foreign policies, where it is unclear whether authority lies in the EU or in national authorities. In drawing these boundaries, the case law is remindful of dynamics observed in other areas of EU competence: it has taken a broad view of EU competences, generally favouring EU institutions perhaps to the detriment of national ones. The broad interpretation given by EU courts to technical requirements discussed in this article (jurisdiction and locus standi above all) has enabled the Court to intervene in many controversies so that it could properly monitor the application of the principle of conferral and of other general principles of EU law by other institutions also in the context of CFSP. The Court has cast a broad net, understanding its role broadly. By admitting challenges to sanctions via preliminary rulings in Rosneft, it has recognised a significant role for the national courts and established an immediate dialogue with them. This is coupled with a broad view of who can challenge sanctions (Venezuela), which amounts to an empowerment of national or legal persons (including third countries). Although not in cases related to sanctions but to CFSP more broadly, it has protected the democratic character of the EU as a polity by protecting the prerogatives of the Parliament (Tanzania).
Although the Court helps the Council striking a fine balance between the pursuit of EU interests and the respect of general principles, the judicial approach can be criticised on two accounts: procedurally, it disrespects the letter of the Treaties and (perhaps more importantly), it substitutes the intention of the Court to that of the drafters of the Treaties;Footnote 196 and as a matter of substance it can be questioned whether it afford meaningful substantive guarantees. The judgments are imbued with effectiveness that avoid the imposition of substantive constraints on the Council. Limitations or derogations from fundamental rights are justified by the invocation of an exceptional context (in RT France Footnote 197) or of ‘the need to ensure that the freezing measures are effective and, in short by overriding considerations to do with safety or the conduct of the international relations of the Union and of its Member States’ (OMPI).Footnote 198
VI. Conclusion
The EU responded to Russia's 2022 war against Ukraine with the most comprehensive set of sanctions in its history. It was, arguably, the strongest foreign policy action ever taken by the EU in response to a single event. Inevitably, these sanctions raise a variety of legal issues of practical and academic interest, including questions on their validity and their constitutional implications. The EU's distinctive competence in conducting a Common Foreign and Security Policy, under which the sanctions are adopted, adds complexity to the judicial review process: the Court of Justice of the European Union faces the challenge of preserving fundamental rights and other general principles of EU law while respecting CFSP's specific institutional arrangements.
This Article argued that the Council enjoys considerable latitude in imposing sanctions, given the absence of fixed triggering conditions (including for conditional ‘snapback’ mechanisms that could be used to obtain leverage) and the largely discretionary nature of such measures. The Article contended that the ECJ has nonetheless guaranteed extensive protection procedurally, albeit this entailed taking a broader view of the scope of its jurisdiction than can be derived from a literal interpretation of the Treaties. The Court has been by and large very deferential to the choices of the Council as a matter of substance. This shows that the case law on this area of EU administrative law converges to a great extent with other areas of EU competence. This convergence is to be welcomed as it strikes a good balance between the commitment to upholding fundamental rights while recognizing the Council's political discretion within the CFSP framework.
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