Yesterday the Court of Justice of the European Union (the CJEU) delivered its judgment in the long-awaited Rosneft case (C-72/15, ECLI:EU:C:2017:236). The judgment clarifies some aspects of the CJEU’s jurisdiction over the Common Foreign and Security Policy (CFSP). Moreover, it is an important precedent in the field of EU sanctions law generally, and also resolve some questions of interpretation that are particular to the Russian sanctions.
In this blog post I will focus on what the judgment in Rosneft adds to the existing case-law on the review of CFSP decisions. Thus, I will not be discussing any of the more specific questions of EU sanctions law nor summarize the full 197 paragraph judgment. For those looking for a quick summary of the case, I refer to the succinct post by Maya Lester QC at the Sanctions Law blog.
CFSP sanctions: decisions and implementing regulations
I have already sketched out the background of the case in considerable detail in a blog post I wrote here following the oral hearing, and I co-wrote a blog post (with Alexander Arnesen) on Verfassungsblog on the Opinion of Advocate General Wathelet. I will not repeat all this background here. But there is a couple of details that are essential to understanding the issue at hand here and the Rosneft judgment more broadly.
Recall that EU law sanctions (also known as “restrictive measures”) are enacted through a two-step process. First, the Council adopts a decision under TEU Title V, Chapter 2. This decision is then implemented in Union law (and thus domestically in the EU member states) by virtue of a regulation adopted under TFEU article 215. In the case of the Russia sanctions, as in most sanctions regimes, the wording of the respective decisions and regulations are virtually identical.
The use of two legal instruments with different legal bases — one decision with a CFSP legal basis, and one regulation with a legal basis in the TFEU — complicates matters when it comes to the jurisdiction of the CJEU. With regard to the regulation, the judgment in Rosneft confirms the obvious: any regulation adopted on the basis of the TFEU article 215 is within the jurisdiction of the CJEU (Rosneft paras 105-106). That is so irrespective of whether the regulation merely restates the decision.
On the other hand, the decision is a act adopted under the CFSP. The CFSP treaty provisions and acts adopted under them are carved out of the CJEU’s otherwise general jurisdiction over Union law (see TEU article 24 and TFEU article 275). To this carve-out there are two exceptions, a.k.a claw-backs: the CJEU has jurisdiction to monitor compliance with TEU article 40 and to decide on the legality of decisions concerning “restrictive measures against natural or legal persons” (emphasis added). As I will come back to, both claw-backs were at play in Rosneft.
The remainder of this blog post focuses on the CJEU’s jurisdiction over such CFSP decisions, notably on the clarifications and contributions the Rosneft judgment offers to the ever-expanding case law in this field. (Key judgments in the previous years that have discussed these issues include Case C-155/14 P H v. Council et al , Case C‑439/13 P Elitaliana SpA v. EULEX Kosovo , and Opinion 2/13 EU Accession to the ECHR .)
The general scope of the CJEU’s jurisdiction over CFSP decisions
With regard to the general scope of the CJEU’s jurisdiction over CFSP decisions, the Rosneft judgment further cements the approach that has emerged in the case-law over the last couple of years.
First, the limitations on the CJEU’s jurisdiction and the two claw-backs explicitly provided for in TEU article 24(1) and TFEU article 275(2) have to be taken seriously. In relation to CFSP acts, the CJEU only has jurisdiction to (1) monitor compliance with TEU article 40, and (2) decide on the legality of restrictive measures against natural or legal persons. (Rosneft para 60.)
Second, while recognizing the explicit limitations on its jurisdiction in the treaties, the CJEU reiterates that those limitations must be interpreted narrowly (Rosneft para 74-75). Or, put differently, the provisions clawing back jurisdiction must be interpreted expansively.
What is new in Rosneft is the application of these starting points to a new issue: do the claw-backs apply in the context of preliminary rulings? This question must be answered separately for the each claw-back provision (Rosneft para 61).
Preliminary rulings and the legality of CFSP decisions in light of TEU article 40
One of the easier questions before the CJEU in Rosneft was whether the validity of CFSP decisions in light of TEU Article 40 could be determined in a preliminary ruling. The identical claw-back provisions in TEU Article 24(1) and TFEU Article 275(2) simply provide that the CJEU has jurisdiction to “monitor compliance with Article 40 [TEU]”.
There is nothing to suggest that such monitoring may only happen e.g in actions for annulment. In other fields of EU law, it has long been clear that the CJEU has jurisdiction to declare Union acts invalid in preliminary rulings (see e.g. Case 314/85 Foto-Frost ). Thus, due to the lack of an express and specific limitation, the CJEU concluded that its jurisdiction extended also to monitoring compliance of CFSP decisions with TEU article 40 in preliminary rulings (Rosneft paras 62-63).
Preliminary rulings and the legality of CFSP decisions concerning restrictive measures
The key jurisdictional question that the Grand Chamber had to deal with in Rosneft was whether it had jurisdiction to decide on the validity of a CFSP targeted sanctions decision in a preliminary ruling procedure. Due to the CFSP carve-out and the peculiar wording of the claw-back provision for restrictive measures in TEU article 24(1) and TFEU article 275(2), there has been significant uncertainty as to the correct answer to this question.
The relevant part of TEU article 24(1) reads as follows (emphasis added):
“The [CJEU] shall not have jurisdiction [over the CFSP], with the exception of its jurisdiction […] to review the legality of certain decisions as provided for by the second paragraph of Article 275 of the [TFEU]”.
The relevant part of TFEU article 275(2) reads as follows (emphasis added):
“the Court shall have jurisdiction […] to rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Article 263 of this Treaty, reviewing the legality of decisions providing for restrictive measures against natural or legal persons [adopted under the CFSP]”
In other words: TEU article 24(1) limits the jurisdiction to “certain decisions as provided for” by TFEU article 275(2), which in turn refers to “proceedings” that are “brought in accordance with the conditions laid down” in TFEU article 263(4). The latter provision provides that actions for annulment can be brought against acts of the EU institutions before the CJEU:
“Any natural or legal person may […] institute proceedings against an act addressed to that person or which is of direct and individual concern to them and does not entail implementing measures.”
The combined text of these provisions arguably suggests that the jurisdiction to determine the validity of CFSP targeted sanctions decisions only extends to actions for annulment brought by individuals. TFEU Article 263(4) ostensibly provides for the institution of proceedings for annulment; the types of acts that may be annulled are listed in TFEU Article 263(1)-(2). Conversely, then, the CJEU would lack jurisdiction to determine the validity of such a decision in a preliminary ruling. Against this, one may argue that jurisdiction to rule on the validity of Union acts is inherent to the complete system of legal remedies that the Union treaties establish.
How to solve this conundrum? AG Wathelet essentially suggested that the Court should interpret TFEU article 275(2) in the context of TEU article 24(1). In particular, he emphasized the use of the term “certain decisions” in TEU article 24(1), which suggest that the reference in TFEU article 275(2) to TFEU article 263(4) concerns the type of act (“restrictive measures”), and not the type of proceedings (i.e. actions for annulment). See AG Wathelet in Rosneft, para 61 et seq. Consequently, the validity of CFSP decisions can be determined in any kind of proceedings — also in preliminary rulings.
A further point is that the French language version of TFEU article 275(2) differs from the English in a crucial respect. It provides that the CJEU has jurisdiction “pour controller la légalité de certaines decisions visées à l’article 275, second alinéa [TFUE]”. This seems to suggest an interpretation in line with that of AG Wathelet. Although AG Wathelet does not discuss the language discrepancy directly, French is the “langue de travail” at the CJEU, and one may speculate that AG Wathelet relied more heavily on the French version of the treaty text than the English.
In Rosneft the CJEU reaches the same conclusion as AG Wathelet; the CJEU has jurisdiction to determine the validity of CFSP decisions in preliminary rulings. In doing so, the CJEU recognizes the textual discrepancy between the otherwise identical claw-back provisions in TFEU article 275(2) and TEU article 24(1), but not (explicitly) the linguistic discrepancy However, it is slightly more careful than AG Wathelet in grounding its argument in other sources than (con)text — perhaps because the Court is indeed aware of the discrepancy between the language versions.
There are in particular two supporting arguments that the CJEU relies on. First, it puts forward a systemic argument. According to the CJEU, it is “inherent” in the Union’s “complete system of legal remedies or procedures that persons bringing proceedings must, when an action is brought before a national court or tribunal, have the right to challenge the legality of provisions contained in European Union acts” (Rosneft paras 67-68).
Second, the CJEU emphasizes the fundamental rights dimension of judicial protection (Rosneft paras 69-75). As usual in cases on jurisdiction on CFSP acts, it refers in passing to the concept of the “rule of law” (Rosneft para 72). But it also refers extensively to article 47 of the Charter of Fundamental Rights (Rosneft paras 73-74). While the Charter has been mentioned in passing before in cases concerning CFSP decisions (notably in Case C-455/14 P H v. Council et al. ), the emphasis has usually been on the nebulous concept of the rule of law. In Rosneft we see the reverse: an emphasis on the fundamental right of effective judicial protection, which is laid down in positive primary law in CFR article 47.
The conclusion that the CJEU draws is thus built on a principled and even more solid ground than that of AG Wathelet. The question of whether the validity of CFSP decisions can be determined in preliminary ruling proceedings must therefore be regarded as settled following the Rosneft judgment.