In its judgment of 13 September 2023, the Grand Chamber of the General Court of the EU rejected the action for annulment from the Bolivarian Republic of Venezuela that challenged restrictive measures adopted by the Council of the EU in the wake of the deterioration of democracy, the rule of law and the protection of human rights in the country. The recent judgment confirmed the competence of the Council to impose restrictions on trade relations under the Common Foreign and Security Policy (Case T-65/18 RENV).
- Opening the door for third States to challenge restrictive measures of general application…
In view of the continuing deterioration of democracy, the rule of law and human rights in Venezuela, the Council of the European Union (“Council”) adopted restrictive measures in 2017 that aimed at impeding the export of arms and surveillance and other equipment to that country since they might be used for internal repression. Though the General Court of the European Union (“General Court”) already dismissed the Venezuelan action to annul the measures as inadmissible, on appeal, the Court of Justice set aside the judgement and declared the Bolivarian Republic of Venezuela (“Venezuela”)’s claim admissible. The case was referred back to the General Court, that has now ruled on the substance.
- … but it remains difficult to challenge those measures on the merits…
As a preliminary remark, the General Court states that the severing of trade relations are measures of general application. Indeed, the measures do not target identifiable natural or legal persons but apply to objectively determined situations and to a category of persons viewed generally and in the abstract, notwithstanding the reference to the Venezuelan government in the contested provisions.
The General Court then examines the pleas invoked by Venezuela to challenge the restrictive measures.
First, the General Court rules that Venezuela had no right to be heard prior to the adoption of the measures as they are of general application. There is indeed no provision in the Treaties that requires the Council to inform any person potentially affected by a new criterion of general application of the adoption of that criterion. The fact that the Venezuelan state is directly concerned is not relevant. Moreover, the General Court rules that hearing the representatives of the Venezuelan government would in casu have forced the EU to conduct discussions similar to international negotiations with a country it wants to cut ties with. This would negate the desired effect, namely exerting pressure in order to bring about a change in its behaviour.
Second, with regard to the obligation to state reasons, the General Court finds that the overall situation ‘of a continuing deterioration of democracy, the rule of law and human rights’ leading to the adoption of the restrictive measures has been amply described in the Regulation and could not have been unknown to Venezuela.
Third, the General Court recalls that the Council has a broad discretion when adopting economic and financial measures within the framework of the Common Foreign and Security Policy (“CFSP”). By way of consequence, the review of the EU judiciary is restricted to verifying that no manifest errors were made in the assessment of the facts.
In this case, the General Court finds that the Council relied on sufficient and reliable information, such as reports provided by Human Rights Watch and the Organization of American States that refer to a crackdown on democracy and grave human rights violations. This assessment of the Council could, finally, not be called into question by internal reports from the Venezuelan government whose “probative value must […] be regarded as low”.
- …even in light of the rules of international law
As the EU is bound to observe international law, as famously stated in the Kadi and Transport Association of America cases, Venezuela held that the Council had imposed unlawful countermeasures that infringed customary international law and WTO agreements with an effect beyond the territory of the EU. Therefore, in its judgment, the General Court also examines the contested measures in light of international law.
Notably, the General Court does away with the argument that restrictive measures constitute countermeasures that would have required prior authorisation from the UN Security Council as there is no indication the EU reacted to the non-performance of an international obligation by Venezuela. Furthermore, the General Court holds that WTO Agreements are not among the rules in the light of which the acts of the EU are reviewed.
Finally, the General Court notes that the restrictive measures at issue concern persons and situations falling within the jurisdiction of the Member States and within the sphere of the independent measures the EU can adopt in the context of the CFSP, in accordance with the objectives and values of the EU, inter alia the objective of promoting, in the wider world, democracy, the rule of law, human rights and fundamental freedoms. They are intended to ensure fulfilment of the erga omnes partes obligations to respect the principles derived from general international law and respect for fundamental rights. The General Court, on this basis, rejects the allegation that the Council exercised extraterritorial jurisdiction.
- Consequences
With this judgment, the General Court showcases the importance the EU judiciary attaches to the rule of law, not only within the Member States, but in its relation with third states. The EU court recalls the principle of effective judicial protection which requires to offer a forum to third countries targeted by restrictive measures, but at the same time puts the emphasis on the importance of the margin of discretion the Council enjoys in the context of the CFSP in order to react to violations of fundamental democratic values in third States.
For further information about this case and/or for general legal advice relating to European litigation, please contact Pierre de Bandt or Raluca Gherghinaru.