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EU: Statewatch analysis on EU's implementation of UN Security Council's 'terrorist list'

01 September 2008

EU implementation of UN Security Council's 'terrorist list' breaches fundamental rights
- Kadi and Al Barakaat Foundation asset-freeze unlawful

The European Court of Justice has today [3 September 2008] annulled the Council Regulation freezing the assets of Yassin Abdullah Kadi, a resident of Saudi Arabia, and the Al Barakaat International Foundation of Sweden, part of the 'Hawala' banking system used by the Somali Diaspora to transfer funds internationally.

The two parties were designated by the Sanctions Committee of the United Nations Security Council on 19 October 2001 as being 'associated with Usama bin Laden, Al-Qaeda or the Taleban'. The EU gives affect to the UN Sanctions Committee decision by adopting Regulations incorporating the UN asset-freezing regime into Community law. The EU also maintains its own dedicated 'terrorist list'.

Mr. Kadi and Al Barakaat are among dozens of affected groups and individuals who have protested their inclusion in the various international 'terrorist' lists at the EU Courts. In this case (joined cases C-402/05 and C-415/05), the two parties challenged the competence of the Council to adopt the freezing orders and argued that the regimes infringed their fundamental rights.

On 21 September 2005, the Court of First Instance rejected all of the pleas. In doing so it ruled that the EU Courts had in principle no jurisdiction (except in respect of certain overriding rules known as jus cogens) to review the validity of the Regulation since the Member States were bound to comply with the Resolutions of the Security Council under the terms of the UN Charter. In short, the Court ruled that UN law prevailed over EU law and that its supremacy could not be contested in the EU Courts.

This set a precedent that led to the dismissal of every subsequent challenge in the EU Courts bought by individuals or groups designated as associates of the Taleban or Al-Qaida.

Court of First Instance 'erred in law'

Today's judgment sets aside the earlier ruling of the Court of First Instance, finding that the Court 'erred in law in ruling that the Community courts had, in principle, no jurisdiction to review the internal lawfulness of the contested regulation'.

The Court concludes that the Community courts must ensure the review, in principle the full review, of the lawfulness of all Community acts in the light of the fundamental rights forming an integral part of the general principles of Community law, including review of Community measures which, like the contested regulation, are designed to give effect to resolutions adopted by the Security Council.

This ruling, which has been welcomed by human rights advocates, affirms the jurisdiction of the EU Courts to examine the implementation of UN Security Council Resolutions and ensure their compliance with human rights law.

'Patent disrespect' for fundamental rights

On the question of fundamental rights, the Court recognised the blatant disregard for fundamental rights that critics of the 'terrorist lists' have been citing for years:

the rights of the defence, in particular the right to be heard, and the right to effective judicial review of those rights, were patently not respected.

The Court argues that the failure of the EC Regulation incorporating the Security Council's sanctions regime provides to include any procedure for 'communicating the evidence justifying the inclusion of the names of the persons concerned in the list' infringed fundamental rights.

At no time did the Council inform Mr Kadi and Al Barakaat of the evidence adduced against them in order to justify the initial inclusion of their names in the list.

That infringement of Mr Kadi and Al Barakaat's rights of defence also gives rise to a breach of the right to a legal remedy, inasmuch as the appellants were also unable to defend their rights in satisfactory conditions before the Community courts.

Freezing of funds 'an unjustified restriction of the right to property'

The Court found that the EU Council was competent to adopt the freezing measures, and noted that there could be grounds where the restriction of the right to property could be justified, but ruled that

the regulation in question was adopted without furnishing any guarantee enabling Mr Kadi to put his case to the competent authorities. Such a guarantee was, however, necessary in order to ensure respect for his right to property…

The judgment affirms the principle that the freezing of funds of suspected 'terrorists' or financial supporters of terrorism can only be justified if affected parties are able to challenge the validity of the freezing order and the reasons for it.

On the grounds that the decisions to freeze the assets of Mr. Kadi and Al Barakaat might still 'prove to be justified', the Court has given the Council until 3 December 2008 to remedy the infringements it has ruled against, preserving the legal effect of the existing financial sanctions for a further three months.

Fresh blow for EU proscription regime

Today's judgment is the latest in a series of rulings by the European Court against the EU proscription regime, albeit the first against the UN 'terrorist list'. In December 2006, in a case bought by the People's Mujahadeen of Iran (PMOI), the Court of First Instance found that the EU had denied designated parties the right to a fair hearing in which they could effectively challenge their designation as 'terrorist' (see: analysis of PMOI judgment).

In July 2007 the EU Court of First Instance ruled that the EU regulations on the freezing of funds of Jose Maria Sison and Stichting al-Asqa (both based in Netherlands) were also unlawful, following the reasoning in the earlier PMOI ruling. Then in April 2008, the Court of First Instance ruled against the inclusion of the Kurdish organisations PKK and Kongra Gel on the EU 'terrorist list'. The court ruled that the organisations were not in a position 'to understand, clearly and unequivocally, the reasoning' that led the member states' governments to include them.

In all these cases, the Court ruled that the 'terrorist lists' breach fundamental rights by failing to provide rights associated with a fair trial. Last year, in response to the Court's decision in the PMOI case, the EU reformed its procedures for adding and removing individuals and groups on its 'terrorist list'. Whereas prior to the PMOI judgment no mechanism existed for those proscribed to either receive an explanation for their inclusion or to challenge that explanation, the EU now provides affected parties with a 'statement of reasons'. In turn, those parties may then write back to the secret EU group responsible for the decision to contest the statement and request de-listing. This is hardly a 'fair hearing' in the eyes of many lawyers, but the Court has yet to rule on the legality of the reformed listing and de-listing procedures.

The EU has meanwhile maintained in its "terrorist list" all those groups and individuals listed above who have successfully challenged their proscription at the EU Courts. So although the Court has annulled the Regulations designating them as terrorists, the EU has simply re-listed them (under fresh regulations) on the grounds that its 'reforms' remedy the fair trial breaches that the Court has identified. Given this defiance, the EU member states would appear unlikely to remove Kadi and Al-Barakaat from the list in accordance with the Court's instructions.

In a separate legal challenge in the UK, the High Court has ruled that the measures adopted by the UK government to implement Security Resolutions were unlawful because they had not been sanctioned by Parliament (see: Britain's financial Guantanamo).

UN Security Council on the spot

Today's ruling effectively extends the obligation on the EU Council to provide a fair hearing and adequate judicial remedy for those on its 'terrorist list' to the UN Security Council. For that reason it is officials at the UN who will be most exercised by today's judgment, as it paves the way for other persons and groups affected by the EU's implementation of Security Council Resolutions to challenge their designation as 'associates of Usama bin Laden, Al-Qaeda or the Taleban' in the EU Courts. Lawyers for UK residents designated by the UN have welcomed the judgment.

The UN also faces the prospect of further legal censure for failing provide a statement of reasons to persons it designates and the limited procedure for appeals to de-list, which are clearly incompatible with the EU Courts demands for compliance with fundamental rights. At the same time, the prospect of the Security Council reforming its procedures to meet the demands of EU human rights law appears remote.

Ben Hayes of Statewatch comments:

For seven years governments acting in the UN and EU Councils have defended 'the 'terrorist' proscription regimes they have introduced in the face of widespread criticism. With today's ruling, the European Court of Justice has recognised that the UN's indefinite designation of Mr Kadi and the Al-Barakaat Foundation as supporters of terrorism is a blatant infringement of their human rights. But government intransigence means the day that they and other successful litigants are actually removed from the UN and EU 'terrorist lists' may still be some way off. If Europe is still the cradle of human rights it is thanks to its courts, not its governments.

Documentation

PRESS RELEASE No 60/08, 3 September 2008, Judgment of the Court of Justice in Joined Cases C-402/05 P and C-415/05 P Yassin Abdullah Kadi and Al Barakaat International Foundation v Council and Commission

JUDGMENT OF THE COURT (Grand Chamber)3 September 2008 (Common foreign and security policy (CFSP) – Restrictive measures taken against persons and entities associated with Usama bin Laden, the Al-Qaeda network and the Taleban – United Nations – Security Council – Resolutions adopted under Chapter VII of the Charter of the United Nations – Implementation in the Community – Common Position 2002/402/CFSP – Regulation (EC) No 881/2002 Measures against persons and entities included in a list drawn up by a body of the United Nations – Freezing of funds and economic resources – Committee of the Security Council created by paragraph 6 of Resolution 1267 (1999) of the Security Council (Sanctions Committee) – Inclusion of those persons and entities in Annex I to Regulation (EC) No 881/2002 – Actions for annulment – Competence of the Community – Joint legal basis of Articles 60 EC, 301 EC and 308 EC – Fundamental rights – Right to respect for property, right to be heard and right to effective judicial review).

Note: On 16 September 2008 CAMPACC, Haldane and Statewatch are hosting an evening seminar on "Proscription, designation and UK law: Executive powers, extraordinary regimes" at the College of Law in central London. Speakers include Henry Miller (Birnberg Peirce Solicitors), Ed Grieves (Garden Court Chambers) and Richard Hermer (Doughty Street Chambers). See seminar series: "Terrorist lists", proscription, designation and human rights.


Background: Observatory on "Terrorist" Lists: monitoring, proscription, designation and asset-freezing