Kadi v European Council [General Court (Seventh Chamber)]

JurisdictionEuropean Union
Date30 September 2010
Docket Number(Case T-306/01)
CourtGeneral Court (European Union)

Court of First Instance of the European Communities (Second Chamber)

Court of Justice of the European Communities (Grand Chamber)

General Court (Seventh Chamber)

(Forwood, President; Pirrung, Mengozzi, Meij and Vilaras, Judges)

(Skouris, President of Grand Chamber; Timmermans, Rosas and Lenaerts, Presidents of Chamber; Cunha Rodrigues, Silva de Lapuerta, Schiemann, Makarczyk, Kuris, Lindh, Bonichot, von Danwitz and Arabadjiev, Judges; Maduro, Advocate-General)

(Forwood, President; Moavero Milanesi and Schwarcz, Judges)

(Case T-306/01)

(Case T-315/01)

(Joined Cases C-402/05P and C-415/05P)

(Case T-85/09)

Yusuf and Al Barakaat International Foundation
and
Council of the European Union and Commission of the European Communities1
Kadi
and
Council of the European Union and Commission of the European Communities2
Kadi
and
Council of the European Union
Al Barakaat International Foundation
and
Council of the European Union3
Kadi
and
Commission of the European Communities4

Economics, trade and finance Economic sanctions Consequences European Community law Implementation in Community law of sanctions imposed by United Nations Security Council Security Council Resolutions 1267 (1999), 1333 (2000) and 1390 (2002) Council Regulation (EC) No 881/2002 Duty to take measures to freeze funds and other financial assets of individuals and entities associated with Usama bin Laden, Al-Qaeda network and Taliban Designation by Sanctions Committee Applicants suspected of supporting terrorism Applicants listed by Sanctions Committee Applicants listed in Annex I to Regulation Applicants' funds frozen in European Community Applicants seeking annulment of Regulation Whether effects of Regulation to be maintained on applicants

International organizations United Nations Security Council Security Council having primary responsibility for maintenance of international peace and security Threat of international terrorism Decision under Chapter VII of United Nations Charter Economic sanctions Security Council Resolutions 1267 (1999), 1333 (2000) and 1390 (2002) Sanctions Committee Listing of applicants Duty on Member States to implement SCRs United Nations Charter, Article 25 Obligation to give effect to decision of Security Council prevailing over other international obligations United Nations Charter, Article 103

International organizations European Community Implementation of sanctions imposed by United Nations Security Council Security Council Resolutions 1267 (1999), 1333 (2000) and 1390 (2002) Council Regulation (EC) No 881/2002 giving effect to SCRs in Community Whether Community having competence to adopt Council Regulation Legal basis of Regulation Whether Articles 60 and 301 of European Community Treaty appropriate and sufficient legal basis Whether Article 308 of EC Treaty providing legal basis Whether Community act applying generally Whether infringement of Article 249 of EC Treaty EC Treaty constitutional principles Requirement that Community acts respect fundamental rights Listing of applicants in Annex I of Regulation Whether Regulation breaching fundamental rights of applicants Validity of Regulation

Relationship of international law and municipal law United Nations United Nations Charter European Community EC Treaty Relationship between international legal order under United Nations and internal and autonomous Community legal order Community act intending to give effect to international law obligations Regulation implementing Resolution adopted by Security Council under Chapter VII of United Nations Charter Whether Community judicature excluded in principle from judicially reviewing Community act in light of fundamental freedoms Judicial review being constitutional guarantee forming part of foundations of Community Whether international agreement affecting allocated powers or legal autonomy of European Community United Nations Charter, Article 103

International tribunals Court of Justice of the European Communities Judicial review of acts of Community institutions EC Treaty constitutional principles Requirement that Community acts respect fundamental rights Whether act reviewable Standard of review Whether Court of Justice having authority to review Community act giving effect to United Nations Security Council Resolutions Whether Court thereby reviewing Resolutions Whether basis in EC Treaty for immunity from jurisdiction for Regulation Whether Regulation lawful

Human rights Rights of defence Right to be heard Right to effective judicial review Right to property Whether restrictions justified Principle of proportionality Guidelines provided by international human rights instruments in which Member States of European Community involved European Convention on Human Rights Whether United Nations sanctions system adequately protecting fundamental rights Nature and effect of restrictive measures on applicants Whether infringement of applicants' fundamental rights

Terrorism Threat of international terrorism Maintenance of international peace and security Security Council Chapter VII of United Nations Charter Security Council Resolutions Economic sanctions Enforcement Freezing funds in fight against terrorism Whether inappropriate or disproportionate Whether annulment of EC Regulation with immediate effect capable of seriously and irreversibly prejudicing effectiveness of measures Whether judicial review disrupting United Nations sanctions system The law of the European Community

Summary:6The facts:The applicants, Mr Yusuf, the Al Barakaat International Foundation (Al Barakaat), an entity established in Sweden, and Mr Kadi, all suspected of supporting terrorism, had their funds frozen in the European Community as a result of their listing in Annex I to Council Regulation (EC) No 881/2002 of 27 May 2002 (the contested regulation).7 The contested regulation imposed certain specific restrictive measures directed

against certain persons and entities associated with Usama bin Laden, the Al-Qaeda network and the Taliban. The applicants sought the annulment of the contested regulation in so far as it concerned them

The contested regulation was adopted on the basis of Articles 60,8 3019 and 30810 of the European Community Treaty (the EC Treaty) to give effect within the Community to Council Common Position 2002/402/CFSP concerning restrictive measures against Usama bin Laden, members of the Al-Qaeda organization and the Taliban and other individuals, groups, undertakings and entities associated with them (the Common Position). Article 3 of the Common Position prescribed the continuation of the freezing of funds of those listed by the United Nations Security Council Sanctions Committee, also known as the 1267 Committee. The Common Position reflected the United Nations Security Council Resolutions (SCRs) 1267 (1999), 1333 (2000) and 1390 (2002). The Security Council adopted the SCRs under Chapter VII of the United Nations Charter, considering that the suppression of international terrorism was essential for the maintenance of international peace and security. The SCRs provided, inter alia, that all States were to take measures to freeze the funds and other financial assets of individuals and entities associated with Usama bin Laden, the Al-Qaeda network and the Taliban, as designated by the Sanctions Committee. The applicants' names had been listed by the Sanctions Committee and subsequently added to the list in Annex I to the contested regulation.

The primary responsibility for the maintenance of international peace and security, one of the purposes of the United Nations according to its Charter, lay with the Security Council. Under Article 25 of the UN Charter its members agreed to accept and carry out the decisions of the Security Council.11 Article 103 of the UN Charter provided that:

The applicants claimed that the Community lacked the competence to adopt the contested regulation and that the contested regulation breached their fundamental rights, in particular, in respect of the right to a fair hearing, the right to respect for property and the principle of proportionality, and the right to effective judicial review. Al Barakaat also alleged a breach of Article 249 of the EC Treaty.

Judgments of the Court of First Instance of 21 September 2005 (Yusuf and Al Barakaat, Case T-306/01) (Kadi, Case T-315/01)

Held:The applicants' claims were dismissed.

(1) The combined effect of Articles 60, 301 and 308 of the EC Treaty gave the Community power to adopt the contested regulation. Powers to impose economic and financial sanctions provided for by Articles 60 and 301 of the EC Treaty, namely, the interruption or reduction of economic relations with one or more third countries, did not cover the interruption or reduction of economic relations with individuals within those countries but only with their governing regimes. Article 308 of the EC Treaty was necessary to impose financial sanctions on individuals who did not exercise governmental control (paras. 10771 of first judgment and paras. 87135 of second judgment).

(2) There was no infringement of Article 249 of the EC Treaty. The contested regulation had general application since it prohibited anyone from making funds or economic resources available to certain persons (paras. 1849 of first judgment).

(3) There was no authority to review, even indirectly, SCRs in order to assess their conformity with fundamental rights as protected by the Community legal order unless those rights had the status of jus cogens. There was what amounted to a rule of primacy, flowing from the EC Treaty, according to which SCRs adopted under Chapter VII of the UN Charter prevailed over rules of Community law. Community law recognized and accepted that, in keeping with Article 103 of the UN Charter, SCRs took precedence over the EC Treaty (paras. 22683 of first judgment and paras. 17632 of second judgment).

(4) The adoption of the contested regulation, naming the applicants as those whose funds were to be frozen...

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