First EU Court ruling on terrorist lists


The lower EU court, the Court of First Instance, has today finally ruled in two judgments on the merits in two cases brought back in 2001 against EU implementation of UN Security Council sanctions concerning alleged terrorists, whose assets and income were frozen to prevent them from giving financial support to the Taliban regime and (subsequently) to Al-Qaeda.

These are the first judgments on the merits of cases concerning challenges to EU implementation of Security Council resolutions concerning terrorist financing. There have been earlier orders of the Court of First Instance concerning requests for interim measures to suspend the EU measures (all these requests were rejected) or ruling certain challenges inadmissible for legal reasons (these inadmissibility decisions are all on appeal to the EU's highest court, the Court of Justice).

The challenges to the EU neasures were rejected in both cases decided today, but either or both judgments could be appealed to the EU's Court of Justice by the applicants within two months. The judgments could also be cross-appealed on some point by the EU Council or EU Member States.

Further cases challenging EU sanctions measures, mostly (but not entirely) raising very similar or identical points, are pending before the Court of First Instance. Some of these cases concern separate EC legislation implementing separate Security Council resolutions concerning international terrorism in general, as distinct from Al-Qaeda [for information on the various "terrorist lists" see Statewatch observatory].

The judgments could also be relevant to the controversial cases where the EC adopts sanctions measures which do *not* implement resolutions of the UN Security Council. In such cases, the EC would not benefit from the special protection which this judgment would confer upon it when it is implementing Security Council measures.

The judgments of the Court of First Instance are separate but nearly identical. They address a number of important points concerning human rights law, international law (in particular the UN Charter, the status of the Security Council, and the principle of jus cogens) and EC powers to adopt sanctions.

Summary of the judgment

The Court of First Instance (CFI) first finds that the EC had power to adopt rules concerning sanctions against individuals. There are two elements to this issue. In one of the two cases (T-306/01 Al Yusuf), the Court finds that the EC has powers pursuant to its powers to interrupt economic or financial relations with third countries to implement sanctions against individuals allegedly contributing financially to the Taliban regime and Al-Qaeda, in the period when the Taliban regime controlled much of the territory of Afghanistan. In both cases (the Al Yusuf case and T-315/01 Kadi), the Court rules with rather greater hesitation that the EC has powers to implement sanctions against individuals allegedly contributing financially to Al-Qaeda, even after the period when the Taliban regime controlled much of the territory of Afghanistan. In the Court's view, the EC lacks the power to take such measures pursuant to its economic sanctions powers, since such measures are not designed to interrupt economic relations with third countries. The EC also lacks the power to take such measures on the basis of the 'residual powers' clause in the EC Treaty (Article 308 EC), which 'fills the gap' to give the EC power to act where no express powers have been conferred by the Treaty (subject to unanimous approval of Member States, and subject to certain conditions). But in the view of the Court, the sanctions powers and the 'residual powers' clause nevertheless, *taken together*, confer the power on the EC to take such measures.

Next, the Court explains in detail the relationship between the UN Charter in general and the Security Council in particular and EC law. In the Court's view, it is necessary to examine this issue before appraising the arguments that the sanctions measures breach human rights. This is the first time that an EU court has examined this issue in any detail.

The Court states that the UN Charter has primacy over all other international treaties and domestic law according to its terms. Also, according to Article 307 EC, EC Member States are obliged to apply international treaties that bound them before their EC membership, in the event of a conflict with EC law. Although one Member State (Germany) was an EC Member State before it joined the UN, the CFI holds that this rule applies to Germany too.

Next, the Court reiterates its prior case law that the EC is not a party to the UN Charter, so is not directly bound by it. But it goes on to state that the EC 'must be considered to be bound by the obligations under the Charter of the United Nations in the same way as its Member States', because of the EC Treaty. The Court appears to be suggesting that the previous case law only ruled on the position under international law, not under the EC Treaty.

The Court then rules that it cannot examine the legality of Security Council acts from the perspective of EC law, even from the perspective of human rights law. But it can examine the legality of Security Council resolutions to see if they violate 'jus cogens' -- the rule of international law that there are some international rules so important that they take precedence over every other form of international law. This is believed to be the first time that an EU Court has even referred to the principle of 'jus cogens', never mind applied it to a specific case. Finally, the Court then examines whether any jus cogens rules are violated in this case as regards the right to property (with a brief mention of the right to be free from inhuman or degrading treatment), the right to a fair hearing and the right to a judicial remedy. It concludes that such rules have not been broken.

Prepared by Professor Steve Peers, Essex University.

Documentation: judgments in cases T-306/01 and T-315/01 and Court press release


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