The scope of the jurisdiction of the Court of Justice of the European Union (CJEU) over the Common Foreign and Security Policy

https://doi.org/10.63189/QBAA4830

The scope of the jurisdiction of the Court of Justice of the European Union (CJEU) over the Common Foreign and Security Policy (CFSP) continues to raise new questions. Pursuant to Article 24(1) TEU, the CJEU has no jurisdiction over this policy, with the exception of jurisdiction to review compliance with Article 40 TEU and to review the legality of certain decisions provided for in Article 275(2) TEU. It means that the CJEU’s jurisdiction is almost entirely excluded in this area. It also means that legal instruments adopted under the CFSP are virtually beyond judicial review^[1]. The Treaty provisions defining the CJEU’s jurisdiction are structured to exclude the CJEU’s competence to interpret primary legislation in the field of CFSP by way of preliminary rulings. It cannot, in principle, exercise its jurisdiction to adjudicate disputes related to the interpretation and application of EU law. However, after the entry into force of the Lisbon Treaty, the Court has decided several cases with which it has not only determined the interpretation of Article 40 TEU and Article 275(2) TFEU, but also significantly expanded its CFSP jurisdiction. This blog will briefly summarise the CJEU’s case law to date, related to the Court’s CFSP jurisdiction.

1.      Drawing the lines between the CFSP and other EU policies and actions

The CJEU has jurisdiction to control that the boundaries between the implementation of the CFSP and the implementation of other EU policies and activities (in particular the so-called “external action of the Union”, as defined in Articles 206 to 216 TFEU), are not breached. Article 40 TEU emphasises that the Union’s competences under the CFSP and under other provisions of the TEU relating to Union policies and actions are not mutually exclusive. Instead, they are complementary, each with its own scope of application and serving different purposes^[2].

On the basis of Article 40 TEU, the Court has no general competence to assess the legality of acts adopted under the CFSP, and the only issue it may consider is the inappropriateness of the legal basis. The subject of an action before the CJEU may therefore be an allegation that the act should have been adopted under procedures applicable to Union policies and activities other than the CFSP. Conversely, it may be alleged that the measure was adopted under procedures applicable to other policies and activities of the Union, although it should have been adopted under the procedures and procedures applicable to the CFSP. De facto, an action for infringement of Article 40 TFEU may be brought under Article 263 TFEU by all entities identified therein (including, inter alia, natural or legal persons).

2.      Control of the legality of legal acts adopted in the CFSP

The CJEU has competence to review the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council (Article 275(2) TFEU). Such review is conducted primarily on the basis of the procedure described in Article 263 TFEU, i.e. on the basis of a complaint alleging the invalidity of a legal act. The limitations of the action due to the specific nature of the CFSP mean that an action based on Article 275(2) TFEU can only be brought by individuals (neither the Member States nor the EU institutions and bodies indicated in Article 263 TFEU can bring an action), and can only be brought against one category of CFSP acts, i.e. decisions imposing restrictive measures. The CJEU’s jurisdiction applies only to decisions adopted by the Council and does not extend to acts of the European Council.

The right of individuals to bring direct actions against decisions containing restrictive measures against them is an important novelty introduced by the Lisbon Treaty, and individuals exercise this right quite frequently. The trigger was the Russian aggression against Ukraine, which resulted in the adoption of a number of sanctions. With this, the CJEU has developed an interesting jurisprudence on the understanding of Article 275(2) TFEU. The Court has repeatedly emphasised that what opens up the individual’s access to the EU’s CFSP courts is the individual nature of the act adopted under the CFSP provisions^[3]. Wherever the decision provides for restrictive measures whose scope of application is defined by reference to objective criteria and which do not target specific natural or legal persons, but apply to all entities engaged in the restricted activity, such measures are not restrictive measures against natural or legal persons within the meaning of Article 275(2) TFEU^[4]. Such a measure is of a general nature, and neither the Court nor the General Court has jurisdiction over it. It is irrelevant in this regard that the applicant challenged the order only in so far as it concerned him. A restrictive measure is of an individual nature when a decision adopted on the basis of CFSP provisions establishes criteria allowing for the identification of a natural or legal person, and includes the names of that person in an annexe to such a decision (para. 24).

However, the CJEU did not stop at merely delimiting the understanding of decisions providing for restrictive measures against natural or legal persons adopted by the Council. In its jurisprudence, by referring to the functions of the courts of the Union (Article 19 TEU and fundamental rights), the CJEU has developed a jurisprudence whereby Article 24(1) TEU refers to Article 275(2), TFEU not to define the type of procedure by which the Court may review the legality of certain decisions, but to define the type of decisions whose legality may be reviewed by the Court in the context of any such procedure of legality review. This gave the Court the opportunity to extend its competence in the CFSP to preliminary questions and to actions involving a claim for compensation for damage and harm allegedly suffered by the applicant as a result of restrictive measures.

3.      Admissibility of questions referred for a preliminary ruling concerning legislation created under the CFSP

The CJEU has partial jurisdiction to answer questions from a national court concerning law created under the CFSP, but this competence is significantly limited.

For the first time, the Court was faced with the problem of whether it could answer a preliminary question concerning law created under the CFSP in the Rosneft case^[5]. Rosneft was listed in 2014 in the Annexe to Decision 2014/512 and in the Annexe to Regulation 833/2014 as an entity subject to certain restrictive measures provided for in those acts. Rosneft challenged the restrictive measures before the UK national courts, and sought a declaration by the national court that both the restrictive measures adopted by the Council and the national acts implementing them were invalid.

The CJEU recalled that the Court’s review of the legality of acts of the Union takes place in two complementary legal proceedings: an action brought under Article 263 TFEU and a question referred for a preliminary ruling (Article 267 TFEU). These proceedings establish a complete system of legal remedies and procedures to ensure the review of the legality of Union acts, entrusting it to the Union Courts (para. 66). This essential feature of the Union’s system of judicial protection also extends to the review of the legality of decisions providing for the adoption of restrictive measures against natural or legal persons under the CFSP (para. 69). Article 24(1) TEU refers to Article 275(2) not to define the type of procedure by which the Court may review the legality of certain decisions, but to define the type of decisions whose legality may be reviewed by the Court in the context of any procedure for such review of legality (para. 70).

The Court also notes that it is for the Member States to enforce a decision providing for restrictive measures against natural or legal persons. In such a situation, a reference for a preliminary ruling on the assessment of the validity of an EU legal act has an important function in ensuring effective judicial protection, in particular, where both the legality of the national implementing measures and the legality of the underlying CFSP decision itself have been challenged in national legal proceedings (para. 71).

Ultimately, the CJEU ruled that it had jurisdiction to give preliminary rulings under Article 267 TFEU on the validity of an act adopted under the CFSP provisions, provided that the reference for a preliminary ruling concerned either a review of the compatibility of that decision with Article 40 TEU or a review of the legality of restrictive measures adopted against natural or legal persons (para. 81).

The CJEU’s decision may be considered surprising insofar as it was based on an expansive interpretation of Article 24(1) TEU and Article 275(2) TFEU. The CJEU justified the need for such an expansive interpretation by the function assigned to it in Article 19(1) TEU. However, since the CJEU’s jurisdiction in the CFSP is of an exceptional nature, it should, according to the rules of interpretation, be interpreted restrictively (the Court itself has emphasised this on more than one occasion^[6]). However, in such a situation, the CJEU would have to consider that it is not competent to answer the national court. This would not be along the lines of the jurisprudence of the CJEU, which is doing its best to extend its jurisdiction to more and more new areas of the CFSP. So far, the CJEU does not have jurisdiction to give preliminary rulings on the interpretation of EU primary and derived law. However, by referring to the functions of the EU courts as indicated in Article 19(1) TEU and to fundamental rights (in particular Article 47 of the Charter of Fundamental Rights), will the CJEU not extend its jurisdiction to these issues? The immediate future will tell.

4.      A claim for compensation for damage suffered by the applicant as a result of restrictive measures

Recent CJEU jurisprudence extends the scope of Article 275(2) TFEU to actions which allege claims for compensation for damage and harm caused to the complainant as a result of the imposition of restrictive measures in decisions based on Articles 25 and 29 TEU^[7]. Meanwhile, neither Articles 24(1) and 40 TEU nor Article 275(2) TFEU mention the jurisdiction of the EU courts to rule on damages and harm caused by the adoption of restrictive measures by the Council in CFSP decisions.

The leading ruling on this issue is the CJEU judgment in the Bank Refah Kargaran case. The case stems from an action that Bank Refah Kargaran brought before the EU General Court seeking compensation from the EU for the damage and harm resulting from the adoption and maintenance in force of restrictive measures concerning it, which were declared invalid by a judgment of annulment.

Since the CJEU has jurisdiction to rule on actions for damages and compensation in so far as they relate to restrictive measures provided for in regulations adopted pursuant to Article 215 TFEU, the necessary coherence of the system of judicial protection under Union law requires that, in order to avoid a gap in the judicial protection of natural or legal persons affected by restrictive measures, the CJEU also has jurisdiction to rule on damages and harm allegedly caused by restrictive measures provided for in CFSP decisions. The CJEU’s rationale for such a finding was that an action for damages and compensation must be assessed in the light of the entire system of judicial protection of individuals established by the Treaties (para. 34).

It is noteworthy that the Court was not persuaded by arguments raising the lack of explicit reference to such actions in Article 24(1) TEU, nor the possibility to pursue claims at national level. The need to guarantee the fundamental right to an effective means of judicial protection led the CJEU to a de facto contra legem constatation, and this with the awareness of such an action.^[8]

^[1] C-658/11 European Parliament vs Council, EU:C:2014:2025, § 69.

^[2] C-130/10 Parlament Europejski przeciwko Radzie, EU:C:2012:472, § 66.

^[3] C‑72/15 Rosneft, EU:C:2017:236, §103; T‑735/14 i T‑799/14 Gazprom Neft vs Council, EU:T:2018:548, § 53.

^[4] T‑233/22, Ekaterina Islentyeva vs Council, ECLI:EU:T:2023:828.

^[5] C-72/15 Rosneft, ECLI:EU:C:2017:236, § 81.

^[6] C-134/19 P Bank Refah Kargaran, ECLI:EU:C:2020:793, § 32.

^[7] C134/19 P Bank Refah Kargaran, ECLI:EU:C:2020:793.

^[8] Ibidem, § 37-39.