EU Sanctions on Individuals Legal Framework

EU Sanctions on Individuals EU Treaty Provisions – External Action and Restrictive Measures EU Council Sanctions Decisions and Regulations EU Court and Legal Standards on Targeting Individuals EU Sanctions related to Ukraine Conclusion: Feasibility of Additional Asset Freezes

EU Treaty Provisions EU External Actions Require unanimous decisions in EU Council Must be aimed at on of the EU’s foreign policy objectives as stated in the Treaty, for instance to “consolidate and support democracy, the rule of law, human rights and the principles of international law” Sanctions measures targeted at individuals required to “include necessary provisions on legal safeguards”

EU Sanctions Decisions and Regulations Decisions lay down general framework of the sanctions Sanctions Regulations contain detailed provisions include lists of targeted individuals in are directly applicable in all EU Member States – no need for national actions are effective immediately (if so agreed by Council) are automatically implemented by financial institutions

EU Court and Targeting Individuals EU Court has struck down hundreds of individual sanctions on procedural grounds Key Requirements for targeting individuals relate to General designation criteria: Clear, precise and consistent with EU Treaties Individual statements of reason: Individual, concrete and specific (“challengeability”) Conformity of statements of reasons with designation criteria Adequate supporting evidence/information Standard of proof – the “sanctions standard”?

EU Sanctions related to Ukraine Initial EU Decision on sanctions in March 2014 Designation Criteria: “persons having been identified as responsible for the misappropriation of Ukrainian State funds and persons responsible for human rights violations in Ukraine, and natural or legal persons, entities or bodies associated with them, as listed in the Annex” Statements of Reason: ““[X is a ] person subject to “criminal proceedings” OR “investigation” in Ukraine to investigate crimes in connection with the embezzlement of Ukrainian State funds and their illegal transfer outside Ukraine.”

EU Sanctions related to Ukraine Second EU Decision on sanctions in January 2015 “For the purpose of this Decision, persons identified as responsible for the misappropriation of Ukrainian State funds include persons subject to investigation by the Ukrainian authorities: for the misappropriation of Ukrainian public funds or assets, or being an accomplice thereto; or for the abuse of office as a public office-holder in order to procure an unjustified advantage for him- or herself or for a third party, and thereby causing a loss to Ukrainian public funds or assets, or being an accomplice thereto.

EU Sanctions related to Ukraine Third EU Decision on sanctions in March 2015 Validity extended by a year for 14 persons but only for three months for 4 persons Fourth EU Decision on sanctions in June 2015 Validity extended by a nine months for 2 persons, for four months for 1 person One person removed from the list Statements of reasons amended to include “[x is a ] person associated with a designated person“ Fifth EU Decision on sanctions in October 2015 Validity extended by five months for 1 person, statement of reason amended Sixth EU Decision on sanctions in March 2016 Validity extended by a year for 16 persons, one person removed from the list

EU Sanctions related to Ukraine Portnov v Council, 26 October 2015 Listing based solely on letter stating that “‘[t]he Ukrainian law enforcement authorities have initiated a number of criminal proceedings to investigate criminal acts committed by former senior officials”, including Portnov EU Court:: “[the asset freeze] is not adopted in response to a request from the authorities of the non-member country concerned, but constitutes an autonomous measure adopted in pursuit of the Common Foreign and Security Policy objectives of the European Union” Council had inadequate information and evidence to determine that Portnov was “responsible for misappropriation of funds” or even that he was “subject of genuine ‘criminal proceedings’, or even a mere preliminary inquiry” -> Listing annulled

EU Sanctions related to Ukraine Azarov v Council, 28 January 2016 EU Court: “[the Council cannot adopt restrictive measures against [an individual] without knowing the acts of misappropriation of public funds which the Ukrainian authorities specifically alleged against him”.” This is needed in order for the Council to establish that the facts can be categorized as misappropriation of public funds (which is the designation criteria) and undermining the rule of law in Ukraine (since the support for rule of law was the foreign policy objective of the measures) -> Listing annulled

EU Sanctions related to Ukraine Klyuyev v Council, 15 September 2016 New documents from Ukrainian authorities describing specific acts and ongoing investigation was enough to satisfy the Court that there was adequate information and evidence Council has comptetence under CFSP to freeze assests of third country national suspected of misappropriation if and only if the acts in question are significant enough to undermine rule of law in Ukraine In this case, target was a high official in former Government, and taking together with other similar officials their acts were enough to undermine rule of law -> Listing maintained

Conclusion: Feasibility of Additional Asset Freezes Legal Requirements Documentation provided to EU detailing alleged conduct and confirming an ongoing investigation The alleged events, taken in their context, must be serious enough to amount to undermining the rule of law in Ukraine The targeted person must have held a significant position of power in Government Proposed by Member State or Commission, discussed in working group(s), decided by unanimous EU Counsel Policy Considerations Requires unanimous consent in Council Must be serious enough to be relevant to 28 Foreign Ministers Political climate, lessons learnt and “sanctions appetite” Is the issue of foreign policy or police co-operation? What is the most effective tool in a given case?

Aleksi.Pursiainen@SolidPlan.fi