The External Dimension of the Rule of Law in the EU: Current Challenges of Judicial Review in the field of EU Common Foreign and Security Policy (CFSP)
Since the ‘war on terror’ waged in the wake of 9/11, CFSP sanctions against states and individuals have become central to EU law. In the past, EU sanctions often relied on UN Security Council resolutions, but they have become increasingly autonomous. This is exemplified by the unparalleled sanctions against Russian persons and entities following the invasion of Ukraine on 24 February 2022.
Notably, these CFSP sanctions, in the form of travel bans and asset freezes, are 'restrictive measures' against those violating the rule of law (Article 2 TEU) and EU fundamental rights (Article 6 TEU). The CFSP in light of Article 2(4) TFEU is undoubtedly an example of a ‘special competence’ of the EU distinct from other competences in Article 2 TFEU. But what does it mean in practice? Does the very existence of this ‘special competence’ shield all affiliated legal and constitutional questions from judicial review? What is the protective and judicial scope of the EU rule of law regarding external CFSP sanctions?
This remains a puzzling issue. The CFSP policy is not under the full jurisdiction of the CJEU, with Article 275 TFEU creating a ‘claw-back’ clause that allows for exceptions from the CJEU’s full jurisdiction under Article 19 TEU. It is essential to examine the rule of law through two lenses: the CJEU’s jurisdiction and EU fundamental rights in the context of CFSP measures by EU institutions and national measures, implementing CFSP policy at domestic level, by Member States.
The judgement in Kadi I, decided before the Lisbon Treaty, established a high constitutional standard by using the rhetoric of the EU Charter to assess the legality of economic sanctions in light of EU fundamental rights (Kadi I, paras 230 and 326). The Court also warned of potential negative effects on the internal market, especially hindering the free movement of establishment and capital (Kadi I, paras 230), which could occur from national measures multiplying if the freezing measures imposed by the Council regulation were imposed unilaterally by each Member State.
After Kadi II, it became clear that the CJEU applied a uniform standard of judicial review of sanctions, whether autonomous or not (Kadi II, C-417/11 P Council v Bamba).The Lisbon Treaty clarified the necessary Treaty provisions to adopt a Council Regulation for implementing CFSP policy and imposing sanctions on individuals. The CJEU stated that such restrictive measures should be based either on Article 75 TFEU or Article 215 TFEU (C-130/10 Parliament v Council), with the latter bridging TEU objectives and TFEU (C-72/15 Rosneft, para 88).
The Post-Lisbon CJEU case law further developed the CJEU’s jurisdiction in CFSP matters and the scope of the application of EU fundamental rights in relation to EU acts (but not acts of the Member States acts implementing a CFSP policy). In the Rosneft case, which relies on a strong rule of law rhetoric, the CJEU extended its jurisdiction beyond the wording of Article 275 TFEU and Article 24(1) TEU that restrict its full jurisdiction based on Article 19 TEU (C-72/15 Rosneft, para 81). The CJEU considered that the preliminary ruling on validity, which constitutes an essential characteristic of the EU system for judicial protection, extends to reviewing the legality of decisions on restrictive measures within the framework of the CFSP (C-72/15 Rosneft, para 75). This reasoning is founded on a complete system of legal remedies and the rule of law, a founding EU value (C-72/15 Rosneft, paras 67-75). This is apparent not only from provisions of the TEU (C-72/15 Rosneft, para 72), but also Article 47 of the CFR on effective judicial protection, which is the ‘essence of the rule of law’ (C-72/15 Rosneft, para 73). This implies necessary strict interpretation of Article 275 TFEU limitations (C-72/15 Rosneft, para 74). Limiting CJEU jurisdiction would contradict Article 19(1) TEU and the principle of effective judicial protection (C-72/15 Rosneft, para 75). A similar ‘rule of law’ logic is used in Bank Refah.
This case law shows that the CJEU’s jurisdiction extends into CFSP areas. However, the CJEU has not yet ruled on whether it can render a preliminary ruling on interpretation regarding national measures implementing CFSP policy. In principle, EU regulations imposing freezing measures (restrictive measures or sanctions) are directly applicable in national law. However, Member States may need to adopt legislation to enforce these measures. According to the Council’s best practices, Member States may also adopt additional legislation to freeze funds, financial assets, and economic resources (Update of the EU Best Practices for the effective implementation of restrictive measures, Council of the European Union, para 25). In such cases, a national court can ask the CJEU to interpret these national measures in light of EU law (C-72/15 Rosneft, Opinion).
In the pending Neves 77 case, the CJEU will rule on its jurisdiction in preliminary rulings on interpretation of the national measures, authorising the confiscation of the entire transaction profits. If the Court endorses Advocate General Ćapeta’s opinion (Neves 77, Opinion, para 70), it will conclude that Article 24(1) TEU and 275 TFEU exclude its jurisdiction to interpret CFSP measures. However, if it extends its jurisdiction and limits Article 275 TFEU’s scope, it will likely rely on the rule of law logic used in Rosneft and Bank Refah.
Concerning the scope of application of EU fundamental rights, the CJEU’s post-Lisbon Treaty jurisprudence upholds the Kadi I requirement that CFSP measures should respect EU fundamental rights and the Charter (C-530/17 P Azarov v Council, para 38). However, the CJEU acknowledges the Council’s broad margin of discretion when making choices of a political nature, as seen in the RT France case concerning restrictive measures against Russia (T-125/22 RT France v Council, para 56). Indeed, EU institutions generally enjoy a broad margin of discretion, particularly when they are required to make choices of a political nature and to undertake complex assessments. Judicial review in these cases focuses on identifying the absence of manifest errors (C-418/18 P Puppinck and others v Commission, paras 95 and 96; C-643/15 and C-647/15 Slovakia and Hungary v Council, paras 123 and 124). This broad margin of discretion makes it harder to prove breaches of EU fundamental rights. The recent Opinion of AG Ćapeta in case KS and KD is, however, illuminating in this regard as AG Ćapeta suggests that ensuring conformity with fundamental rights, but not the nature of the act itself, should be a decisive factor when it comes to bringing the claims of non-contractual liability towards the EU within the Court’s jurisdiction (KS and KD, Opinion, para 116).
It remains to be seen what stance the CJEU will adopt in regard to the scope of jurisdiction in CFSP matters and application of EU fundamental rights in relation to EU CFSP acts. Without a doubt, its position will have profound implications for the CFSP and the broader EU legal order. The scope of judicial review in CFSP is decisive to the issue of accession to the ECHR as underlined by AG Ćapeta in KS and KD (KS and KD, Opinion, paras 145-153). Only a broad interpretation of EU fundamental rights and the EU rule of law to CFSP matters can pave the way for ECHR accession. According to the draft accession agreement, from the 18th CDDH ad hoc negotiation Group meeting (“46+1”) 14-17 March 2023, the CFSP remains the only obstacle to the EU joining the ECHR (DAA) and this matter has been left to the Member States. Yet, no agreement between Member States could arguably be found in the near future if the Court takes a restrictive interpretation regarding the scope of application of the EU rule of law in KS and KD.
About the Author
This blog post is based on on Xavier Groussot and Anna Zemskova's article, “Using Financial Tools to Protect the Rule of Law: Internal and External Challenges”, a contribution to Anna Södersten and Edwin Hercock (eds), SIEPS Report No.1op (April 2023), “The Rule of Law in the EU: Crisis and Solutions”, published by the Swedish Institute for European Policy Studies (SIEPS), Stockholm, Sweden.
Xavier Groussot is a professor of EU Law at Lund University's Faculty of Law - a partner institution of the EU-VALUES Network. He is Director of the Master Programme in European Business Law. Since 2009, he has been a guest professor at Université Panthéon-Assas (Paris II), teaching EU Free Movement Law within the European College of Paris. Additionally, he is a guest professor at the University of Reykjavik and at the University of Bologna (2024).
Anna Zemskova is a postdoctoral fellow at the Faculty of Law, Lund University where she conducts research in the field of EU constitutional law. Anna’s PhD dissertation, defended in April 2023, dealt with examining the adherence to the principle of the rule of law in the context of economic emergency in the European Union. A full list of her research inputs can be found here.
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The opinions expressed in this blog are solely those of the author and do not reflect the views of EU-VALUES Network.