ECJ, XX and Al Barakaat International Foundation v. Council and Commission, C-402/05 P and C-415/05 P, 2008
- 2008
- Sweden
Topics
Terrorism financingLegal bases
European Convention on Human Rights Treaty establishing the European Community (EC) Protocol No. 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms, ETS 9Courts
European Court of Justice (ECJ)Laws
Right to a fair trial Right to an effective remedy Right to propertyRelevant links
Facts
Following various resolutions of the United Nations Security Council, all UN Member States were called upon to freeze the funds and other financial assets controlled directly or indirectly by individuals or entities designated by the sanctions committee of the Security Council as being associated with Usama bin Laden, Al-Qaeda or the Taliban. In order to implement those resolutions, the Council adopted a common position within the framework of the CFSP concerning restrictive measures against the persons concerned and then, on the basis of Articles 60, 301 and 308 EC, adopted Regulation 881/2002, which provides, inter alia, for the freezing of the funds and other economic resources of those individuals and entities, which also appear in a list annexed to the regulation and are regularly updated on the basis of successive UN resolutions. Mr XX, a Saudi resident, and the Al Barakaat International Foundation, established in Sweden – both of which appear in the list annexed to the abovementioned regulation – brought actions for annulment before the Court of First Instance, claiming that the Council was not competent to adopt that regulation and that the regulation breached several of their fundamental rights, in particular the right to property and the rights of the defence.
Legal grounds
Articles 60, 301 and 308 of the EC; Article 1 of the Protocol No. 1 to the ECHR; Article 6 of the ECHR.
Findings
Examining the plea in law relating to respect for the rights of defence, the Court stated that the effectiveness of judicial review means that the Community authority is bound to communicate to the person concerned the grounds on which the measure adversely affecting him/her is based in order to enable him/her to exercise his/her right to bring an action. The Court acknowledged that the effectiveness of measures to freeze funds requires that those measures take advantage of the element of surprise and apply with immediate effect. Consequently, even though the Community authorities were not required to provide a statement of grounds or hold a hearing of the persons concerned prior to the inclusion of their names in the list, those authorities should nevertheless have done so within a reasonable period after those measures were enacted. As this did not occur in this case, the appellants’ rights of defence, in particular their right to be heard were not respected. This breach also resulted in an infringement of the right to judicial review, since the appellants were likewise unable to defend their rights in satisfactory conditions before the Community judicature. With regard to the plea relating to the restriction of the right to property, while, on the one hand, the Court did accept in principle that such a restriction could be justified in the fight against the threat of terrorism, on the other hand, it pointed out that the contested regulation was adopted without furnishing any guarantee enabling Mr XX to put his case to the competent authorities, whereas, having regard to the general application and effective continuation of the fund freezing measures affecting him, such a guarantee is necessary to ensure that his right to property is respected. In the light of these breaches, the Court was prompted to annul Regulation 881/2002 to the extent that it concerns Mr XX and Al Barakaat.