Introduction
Article 263 of the Treaty on the Functioning of the European Union (TFEU) stands as a pillar of judicial oversight within the EU, providing a mechanism for private parties to challenge the legality of EU acts and serves as a vital instrument for ensuring legal integrity, accountability, transparency and the protection of fundamental rights.
Through the recent judgments of the General Court of the European Union on the cases of Russian oligarchs, Petr Aven and Mikhail Fridman, who successfully challenged their inclusion on the EU sanctions list, we examine its scope, standing requirements, and grounds for annulment of EU acts and explore the implications of Article 263 in the context of EU sanctions policy.
Bringing an action for annulment under Article 263
The EU Courts have jurisdiction to review the legality of acts of EU institutions (European Council, European Parliament, Commission, European Central Bank and other institutions, bodies, offices or agencies of the EU). Embedded within Article 263 of the TFEU lies the essence of judicial review, affording third parties the opportunity to contest the legality of EU legislative acts and acts intended to produce legal effects vis-à-vis such third parties.
Distinguishing between privileged applicants (EU countries, the European Parliament, the Council and the Commission), semi-privileged applicants (the Court of Auditors, the ECB and the Committee of the Regions), and non-privileged applicants (legal and natural persons amongst others), Article 263 limits non-privileged applicants’ standing to those acts that affect them particularly and requires private parties to satisfy stringent standing requirements and to demonstrate that the reviewable act is either addressed to them or is of direct and individual concern to them.
An action for annulment must be initiated within 2 months of the act’s publication or of its notification to the applicant. If the act is not published or notified, the deadline runs from the point at which the applicant gained knowledge about it by other means.
Article 263 TFEU enumerates grounds for annulling EU acts, including lack of competence, procedural irregularities, infringement of EU treaties or any rule of law relating to the application of the EU treaties, and misuse of powers.
If the applicant is successful, the General Court may declare the contested act void, usually from its entry into force. The General Court’s judgment is subject to appeal before the ECJ, on points of law only.
The Case of Aven and Fridman: Unraveling the Implications
In a watershed moment, the recent judgments by the General Court in Cases T-301/22, Aven v Council and T-304/22, Fridman v Council dealt a significant blow to the EU’s sanctions regime against Moscow.
Following Russia’s invasion of Ukraine, the Council of the European Union adopted acts placing Petr Aven and Mikhail Fridman, major shareholders of Alfa Group, a conglomerate including one of Russia’s major banks, on the EU sanctions list. The Council alleged their association with sanctioned individuals, including Vladimir Putin himself, and support for actions and policies undermining Ukraine’s sovereignty, leading to the freezing of their funds and economic resources.
In order to justify the inclusion of Fridman’s and Aven’s names on the disputed sanctions lists, the Council relied on articles published in the media and on several websites which concerned the control of Alfa Group by the applicants and the financing of a charity project run by Mr. Putin’s daughter and on an open letter signed by Russian and American journalists, intellectuals, activists and historians, in which the authors protested against the invitation of the applicants to the Atlantic Council’s headquarters in Washington.
The General Court upheld the applications filed by Fridman and Aven, concluding that the reasons provided in the initial acts lacked sufficient substantiation, rendering the inclusion of Aven and Fridman in the sanctions lists unjustified. While acknowledging a potential association between Aven, Fridman and Vladimir Putin or his circle, the Court asserted that the evidence relied upon, does not demonstrate their involvement in actions undermining Ukraine’s territorial integrity, sovereignty, or independence and found no proof of their provision of material or financial support to Russian decision-makers responsible for Crimea’s annexation or Ukraine’s destabilization, nor any benefits received from such decision-makers.
The successful challenge by Petr Aven and Mikhail Fridman not only exposed flaws in the EU’s sanctions mechanism but also shed light on the hasty assembly of evidence, often relying on questionable sources such as press coverage.
The judgment’s implications extend beyond the realm of legal scrutiny, sparking criticism of the EU’s sanctions policy and its effectiveness in addressing geopolitical challenges. Some argue that the judgment signifies a collapse of European sanctions policy and a declaration of impunity for acts undermining international stability. The designation of the judgment’s delivery as a ‘Day of Oligarch Triumph’ underscores the gravity of its consequences.
Conclusion
As the dust settles, questions loom over the future of EU sanctions policy and the role of judicial oversight in upholding accountability. The judgment serves as a reminder of the need for transparency, robust evidence, and adherence to legal standards in EU decision-making processes.
Article 263 TFEU once more emerges as a vital instrument for ensuring legal integrity and upholding the rights of individuals and entities within the EU and by evaluating its recent application, it becomes evident that the principles of judicial review are essential safeguards against arbitrary decision-making within the EU.
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