Mr. Kadi wins second challenge to European asset freezing regulation, again on fundamental rights grounds: Case T-85/09 Kadi II v Commission

01/10/10

Yassin Abullah Kadi, an alleged supporter of al-Qaeda and Osama bin Laden, had his assets frozen by the European Union, in obedience to a UN Security Council Resolution, shortly after the attacks of 9/11.  Mr Kadi's initial challenge to that measure succeeded on appeal (Case C-402/05 P Kadi I), the European Court of Justice famously stating that even measures giving effect to UN SCRs must be subject to judicial review for compliance with fundamental procedural rights.

Following that judgment, the European Commission immediately included Mr Kadi on another asset freezing regulation.  The Commission forwarded a brief summary of reasons from the United Nations, and argued that that was sufficient to comply with the requirements spelled out in Kadi I and other cases.

The Seventh Chamber of the General Court (Judge Forwood, Rapporteur) annulled the new listing on 30 September 2010.  The Court underlined the importance of a 'full and rigorous' review of asset freezing measures and the evidence and findings on which they are based, noting that the UN Sanctions Committee (even taking account of recent improvements to its procedures) fails itself to guarantee effective judicial protection.  The Commission had observed Kadi's rights of defence only in 'the most formal and superficial sense' and had not taken account of his comments, nor given him access to the evidence against him.  The imprecise allegations of terrorist activities were clearly insufficient to enable him to challenge them effectively, and the interference with his property rights was disproportionate.

The judgment also questions in two respects the ruling of the senior court in Kadi I.  First, its orthodox characterisation of asset freezing measures as temporary and precautionary was doubted: referring to the lengthy period that they had been in force, the General Court considered that it may be possible to characterise such measures as punitive rather than preventative, confiscatory rather than protective, criminal rather than civil (paras 149-151).

Secondly, and more radically still, the Court noted that 'certain doubts may have been voiced in legal circles' about the consistency of the judgment of the Court of Justice in Kadi I with international law and the EU Treaties, and stated bluntly that 'those criticisms are not entirely without foundation', and effectively invited the Court of Justice to reconsider its position in future cases (paras 115-123).  Both the Advocate General and the rapporteur in Kadi I having now left the Court, it may be that the relationship between EU and international law is less settled than had been assumed after the Kadi I judgment.

The judgment is here.