Francesca Finelli, PhD student, University of Luxembourg
In the legal case Venezuela v Council (C-872/19 P), the Court of Justice of the European Union (CJEU) reversed a prior General Court decision. It determined that Venezuela has the right to legally challenge EU sanctions imposed against it. This judgment is groundbreaking as it allows any third-party country facing EU economic sanctions to challenge them in EU courts, a precedent not previously established.
Context of the Dispute
Since November 2017, the EU has enforced sanctions on Venezuela due to ongoing issues with the country’s democracy, rule of law, and human rights record. These sanctions consist of: export restrictions on equipment potentially used for repression, such as military and surveillance tools; and asset freezes targeting individuals and entities involved in human rights violations, undermining democracy, or connected to such activities.
Despite over 120 individuals being targeted by these sanctions over the past four years, none had challenged them in EU courts. However, in February 2018, Venezuela initiated legal action with the General Court to nullify several EU sanctions imposed on the country.
Admissibility in Question
The key legal issue in the Venezuela v Council case was whether Venezuela had the legal standing to bring its case before EU courts. This hinged on the interpretation of Article 263(4) TFEU, which outlines the conditions for non-privileged applicants (like Venezuela) to take legal action against the EU. This article allows challenges if the EU measure directly targets them, if they are directly and individually affected, or if they are contesting a non-regulatory act that directly concerns them and lacks implementing measures. This case centered on the last condition.
To demonstrate “direct concern,” Venezuela had to prove the EU sanctions directly impacted their legal situation and that the sanctions were automatically implemented without any intermediary domestic measures. The Council countered, arguing Venezuela had no legal standing, lacked a valid legal interest in the case, and did not qualify as a “natural or legal person” under Article 263(4) TFEU.
On September 20, 2019, the General Court ruled in favor of the Council, stating that the EU sanctions did not directly target Venezuela, only indirectly impacting the country by limiting access to certain goods and services. Consequently, the General Court dismissed Venezuela’s case for lack of standing.
However, on June 22, 2021, the CJEU overturned this decision upon Venezuela’s appeal.
The CJEU, first and foremost, addressed the concept of “legal person”, a point not previously considered by the General Court. They asserted a broad interpretation of Article 263(4) TFEU, emphasizing the principles of effective judicial review and the rule of law as paramount. This interpretation, they argued, allows third-party states like Venezuela to challenge EU actions that harm their interests, thus aligning with the principle of ubi ius ibi remedium (where there is a right, there is a remedy).
Second, the CJEU determined that the EU sanctions directly concerned Venezuela, taking a “holistic and pragmatic approach” that prioritizes substance over form. They argued that even though the sanctions do not explicitly target Venezuela, they directly affect the country’s legal standing by restricting access to essential goods and services.
Third, the CJEU refuted the Council’s claim of Venezuela lacking a legitimate interest in the case. They argued that the sanctions could harm Venezuela’s economic interests, thereby justifying the country’s legal action for potential redress.
Finally, the CJEU determined that the EU sanctions, classified as a “regulatory act”, did not necessitate implementing measures and were applicable without discretion.
The CJEU ultimately ruled that Venezuela met all the criteria outlined in Article 263(4) TFEU and had the right to pursue its case. The case was then returned to the General Court for judgment on its merits.
Critical Analysis
The CJEU’s ruling in favor of Venezuela is significant and raises questions about potential ramifications. It dramatically expands the scope of potential applicants who can challenge EU sanctions, including countries like Russia, Belarus, and Turkey. This raises concerns about a potential surge in legal challenges against EU sanctions, a concern the Council voiced during the case.
Furthermore, EU sanctions have already faced numerous legal challenges, making the EU vulnerable. A more cautious approach from the CJEU might have been expected to safeguard the EU’s legal autonomy.
Finally, this ruling could prompt the EU to reconsider its approach to third-country sanctions and potentially shift towards thematic sanctions, such as the new EU human rights sanctions regime, as a way to mitigate the increase in legal challenges from non-EU countries.
Barnard & Peers: chapter 24
Photo credit: Wiflredor, via Wikicommons