Case T-246/15 Ivanyushchenko v Council

On 5 March 2014, the Council froze the funds and economic resources of persons identified as being responsible for the misappropriation of Ukrainian State funds. Mr Ivanyuschchenko, a prominent Ukrainian businessman and former politician, was one of these individuals. The General Court has now annulled the freezing of funds for Mr Ivanyuschchenko for the period 5 March 2015 until 3 March 2017, on the basis that the Council had committed a manifest error of assessment in determining that there was a legitimate basis for listing him.

At §§152-154 the Court held as follows:

“152.  It follows from all of the foregoing that the information relating to the various criminal proceedings … on which the Council relied in order to maintain the applicant’s name on the list, is either irrelevant, since those proceedings do not concern the misappropriation of public funds, or beset with inconsistencies such that the Council should have had doubts as to the adequacy of the evidence on which it relied.

153. Thus, the Council – given the inadequacy of the factual basis on which it relied … and given, moreover, the exculpatory evidence invoked by the applicant – should have investigated further and sought clarification from those authorities …

154.  It follows that the Council made a manifest error of assessment when it considered that the proceedings brought against the applicant, as described in the evidence and in light of the exculpatory evidence adduced by the applicant, corresponded to the reasons stated for maintaining his name on the list, namely that he was the subject of criminal proceedings brought by the Ukrainian authorities in respect of actions that could be characterised as misappropriation of public funds and that, consequently, those proceedings allowed the applicant’s conduct to be categorised as satisfying the relevant criterion”.

In its judgment, the General Court makes clear that the Council cannot simply rubber-stamp what it is told by third countries, as this would be inconsistent with the principle of good administration, and the obligation to respect fundamental rights under the EU Charter. In particular, the Council is required to undertake a careful and impartial examination of exculpatory evidence adduced by the applicant. The General Court concluded that this was not done in the present case.

Brian Kennelly QC and Jason Pobjoy acted for Mr Ivanyushchenko. Brian and Jason have extensive expertise in challenging and advising on EU and international asset-freezing sanctions, and are currently representing more than 25 individuals and entities in over a dozen challenges to asset-freezing regimes before the General Court of the EU and the Court of Justice. They recently prepared a detailed submission to the Government public consultation on the legal framework for sanctions post-Brexit: available here.

A copy of the judgment can be found here.