Their names were included in the list of persons, entities and bodies subject to the restrictive measures adopted by the Council of the EU in connection with Russia’s invasion of Ukraine.
Taking into account that the schemes that allow to avoid the sanctions system are becoming more and more complex, the EU Council adopted a regulation on July 21, 2022, which provides for the obligation to report funds and cooperate with the competent authorities.
Failure to comply with these obligations is tantamount to circumvention of asset freezing measures. More specifically, the purpose of these obligations is to prevent the use of complex legal and financial constructions that facilitate the circumvention of these measures or make it difficult for the competent state authorities to identify the funds or economic resources that are subject to the restrictive measures.
Before September 1, 2022, the interested parties applied to the General Court of the European Union with demands to cancel the obligations to report on their funds or economic resources and to cooperate with the competent state institutions. The plaintiffs considered that since the mentioned obligations are not part of the decision of the Council of the EU adopted in the field of the common foreign and security policy (CFSP), they cannot be considered as measures necessary for the implementation of such a decision. The plaintiffs emphasized that the EU Council regulation is considered a misuse of powers, as the adoption of the respective obligations should be included in the implementation powers of the member states.
The General Court completely rejected the claims.
The Court reminds that EU law allows the Council of the EU to adopt regulations to implement or introduce restrictive measures with the aim of ensuring their uniform application in all member states. The measures provided for in EU law are not limited to obligations not to act, and the Council of the EU can impose reporting and cooperation obligations, even if they are not expressly provided for in the decision to which they relate. The General Court also believes that the Council of the EU has not replaced the member states in deciding how the restrictive measures should be implemented and how the penalties should be determined in their territory. On the contrary: it is still within the competence of the state authorities to determine what kind of punishments – criminal, administrative or civil – and what specific punishments should be provided for a violation related to participation in sanctions evasion activities.
2024-09-11 21:53:36