On 26 October 2022, the General Court of the Court of Justice ordered the annulment of the decisions that had maintained the name of Dmitry Ovsyannikov, former Governor of Sevastopol (the largest city and seaport in Crimea) on the EU sanctions listing. The Court of Justice ruled that when reassessing whether a person’s name should remain on the list, the Council of the European Union (the Council) must check that the factual evidence it was relying on was still accurate and up-to-date. Salomé Lemasson details a recent ruling by the Court of Justice, which annulled the designation of the former Governor of Sevastopol after holding that the underlying facts that justified the designation were no longer accurate and up-to-date.
The case
Following the illegal annexation of Crimea in 2014 by the Russian Federation, the Council adopted decision 2014/145/CFSP of 17 March 2014. This set the framework governing the EU’s restrictive measures (including travel restrictions and asset freezing) imposed on persons responsible for actions that compromised or threatened the territorial integrity, sovereignty and independence of Ukraine, or actions that are contrary to the Ukrainian constitution. This decision, along with Council Decision 2014/512/CFSP of 31 July 2014 and the related Council Regulation (EU) No 269/2014 and Council Regulation (EU) No 833/2014, have been subsequently amended and updated following the recent invasion of Ukraine launched by Putin’s Government in February 2022.
The case in question concerns facts that pre-date the February 2022 invasion. The election of the Governor of Sevastopol on 10 September 2017, orchestrated by the Russian Federation, triggered Council’s decision to add Mr Ovsyannikov’s name to the list of persons, entities and bodies targeted by the sanctions. The addition of his name to the list of sanctioned persons and entities was due to the public positions he held for the Russian Government and public statements he had made during that period in favour of the illegal annexation of Crimea.
Through a line of further decisions between 2020 and 2022, including the most recent listing of 10 March 2022, the Council maintained the listing of Mr Ovsyannikov on the same grounds. The only modification that was made to the reasons for justifying maintaining his name on the list was updating the information relating to the roles he held within the Russian Government, namely adding ‘former Governor of Sevastopol (until July 2019)’ (emphasis added in italics) and ‘[s]ince October 2019 Deputy Minister of Industry and Trade of the Russian Federation’.
Pursuant to Article 263 TFEU, Mr Ovsyannikov filed an application to the Registry of the General Court seeking the annulment of the decisions adopted by Council between September 2020 and March 2022 that maintained him on the sanctions list for being, among other things, the ‘former Governor of Sevastopol’.
Seeking the annulment of EU legal acts
The EU is a union governed by the rule of law, whereby the legality of acts adopted by EU institutions is subject to control and may be challenged by certain persons and under certain conditions. Various actions can be brought against legal acts taken by EU institutions, including actions for annulment, governed by the provisions of Article 263 TFEU.
Actions for annulment may only be lodged based on a limited set of five arguments: lack of competence of the EU institution that adopted the contested act, infringement of an essential procedural requirement, infringement of the treaties, infringement of any rule of law relating to the application of the treaties; and misuse of powers.
The procedural regime that governs actions for annulment depends on the quality of the applicant bringing the action. A more favourable regime is granted to so-called privileged applicants (EU Member States, Parliament, Commission and Council) which may bring an action for annulment purely in the interests of legality, without proving any particular interest. Semi-privileged applicants (ie, the European Committee of the Regions, the European Central Bank and the European Court of Auditors) may bring an action for annulment only to protect their own prerogatives. Finally, non-privileged applicants (individuals and legal persons) can only lodge such an action if they prove they have standing to do so, which is limited to proceedings against an act addressed to that person or which is of direct and individual concern to them.
If the action for annulment is deemed admissible and well founded by the court, then the contested act is declared null and void, and deemed never to have existed. As such, its annulment carries a retroactive effect. However, Article 264 TFEU allows the court to limit the effects of the declaration of nullity. As appropriate, the party that obtained annulment of the contested act may seek damages under separate proceedings.
The parties’ arguments
Mr Ovsyannikov submitted that the Council made a manifest error when it came to the assessment of the facts and criteria on which it based the acts of September 2020 onwards to maintain him on the sanctions list, which mainly relied on the official positions he held within the Russian Government at the time of the initial listing in 2017. He stated that, on 11 July 2019, he voluntarily resigned as the Governor of Sevastopol, a fact confirmed by decree, and subsequently left the post of Deputy Minister of the Russian Government, which was confirmed by the latter on 23 April 2020. Moreover, he submitted that he lived in Moscow and no longer maintained an active interest in politics.
The Council disputed these arguments. It submitted that the fact that he no longer held the position of Governor of Sevastopol was considered at the time of the adoption of the September 2020 acts, but that it had not been informed of his resignation as Deputy Minister. However, it was argued that this would not invalidate the legality of the acts as the Council stated that he did not resign voluntarily from the role—it had actually been a unilateral decision taken by the Russian Government. Furthermore, the Council submitted that it was not informed that Mr Ovsyannikov lived in Moscow, that he no longer associated himself with the ideas which he previously advocated nor that he no longer holds any political interests. The Council disputed that these facts disproved their reasoning, as they would not exclude him exercising his influence in a different way. In the circumstances, the Council considered him responsible for actions that compromised or threatened the integrity of Ukraine and, in the absence of evidence to show the contrary, it considered that the link between Mr Ovsyannikov and the condemned actions still exists.
The court’s decision
The court said the fact that the Council was not informed of the change of circumstances by Mr Ovsyannikov was not something for which the latter could be criticized, given that the burden stands on the Council to ensure a careful examination of the factors which support maintaining someone’s name on the list as part of its periodic review and monitoring of the sanctions. The court further noted that when the Council adds a further reference to the political role held by a person targeted by the restrictive measures, it is its duty to check that such information is still valid. The change of circumstances in the affected person’s life should have been carefully considered by the Council.
The court held that when it comes to considering the grounds for re-listing an individual or entity, EU jurisprudence does not prohibit the Council relying on the same evidence on which it based its decision for the initial or subsequent listings, provided that the grounds and the context remained unchanged. However, the court found that despite the general context in Ukraine remaining the same, the situation was different in this particular case as the inclusion of Mr Ovsyannikov on the list was directly linked to his election as Governor of Sevastopol. The court made it clear that the subsequent re-listings from September 2020 onwards were based on events from the past and that the Council should have not assumed that this was still the case several months after Mr Ovsyannikov had left office.
In its decision process, the court indicated that the merits of maintaining someone’s name on the sanctions list must be examined in its overall context and not in isolation, as established by the EU jurisprudence. In the present case, this meant considering the level of the roles Mr Ovsyannikov held in the hierarchy of the Russian Government, their duration and the specific actions he engaged in during that period. The court stated that in the three years and seven months he held office, the content of the public speeches he gave (which were the only acts given by the Council as a justification for his listing) was average in the context of what was expected of a person in his position. It followed that, once he resigned and distanced himself from politics, he was no longer able to engage in the actions for which he had been sanctioned. The issue of whether he resigned of his own volition or it was a unilateral decision by the Russian Government was deemed irrelevant.
It was held that the Council erred in its assessment when it considered that Mr Ovsyannikov continued to have links with the Russian Government and with the persons responsible for the ongoing situation in Ukraine. Even if this scenario could not be ruled out from the outset, the Council did not discharge its burden of proof by producing evidence that would justify maintaining Mr Ovsyannikov's name on the sanctions list and, therefore, the court ordered the annulment of the disputed acts insofar as they concerned the listing of Mr Ovsyannikov.
Conclusion
In a general context whereby sanctions against those associated with Russia’s actions in Ukraine are proliferating, the court’s decision is welcome as it reminds EU institutions that they must abide by the highest requirements of legal rigor when taking decisions on sanctions. The legitimacy of the entire sanctions process is at stake, and the Council cannot solely rely on past facts to maintain individuals on the sanctions list without closely verifying that such facts are still up-to-date and relevant to the sanctioning process.
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This article was originally published on 7 November 2022 and is accessible at:
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