Manolis Perakis Assistant Professor of EU Law, Law School, National and Kapodistrian University of Athens, Greece
In the context of promoting the rule of law as a fundamental value that must govern the action of the Union and its Member States, the Court of Justice of the European Union (CJEU) delivered its judgment on appeal in Venezuela v Council case (C-872/19) concerning the EU’s foreign policy and, especially, the imposition of sanctions against a third State due to the continuing and serious violations of the democratic principle and human rights. With its ruling, the CJEU took a very important step regarding the judicial review of EU institutions, by granting, for the first time, locus standi to third states before the EU Courts. This study seeks, on the one hand, to present the aforementioned judgement and, on the other, to set out a criticisms concerning how the Court failed to consider the distinctiveness of judicial review in the EU’s foreign policy area.
The study is divided into two parts. The current, first part (I) presents the judgment itself, starting from the historical context (1) and continuing with the analysis of the Court’s reasoning and its final ruling (2). The second part (II) will identify and analyse the weakness of the judgment, namely the failure to take into account the legal peculiarities of judicial review in the field of foreign policy.
Part A: Presentation of the judgement
1. The facts of the case
In view of the continuing deterioration of democracy, the rule of law and human rights in Venezuela, and following fruitless attempts for consultation and numerous communications, the European Union decided to adopt targeted restrictive measures against certain natural and legal persons responsible for serious human rights violations or abuses, or for the repression of civil society and democratic opposition, as well as against persons, entities and bodies whose actions, policies or activities undermine democracy or the rule of law in Venezuela. Indeed, on 13.11.2017, the Council, within the framework of the Common Foreign and Security Policy (CFSP) and on the basis of Article 29 TEU, adopted Decision 2017/2074 concerning restrictive measures with regard to the situation in Venezuela.
The above Decision prohibited the export, from the Union to Venezuela and specified legal and natural persons, of weapons, military and paramilitary equipment, as well as the provision of technical assistance related to such equipment, and imposed restrictions on the transfer of any equipment which might be used for internal repression, weapon manufacture or telecommunications interception, as well as on any form of financial assistance related to the above. Furthermore, restrictions have been imposed on the entry into the EU of natural persons responsible for serious human rights violations or abuses, for the repression of civil society and democratic opposition in Venezuela, and for undermining the rule of law in the country. Finally, funds and economic resources of these persons have been frozen.
The requirements set out in the above Decision were later incorporated into Council Regulation (EU) 2017/2063 of 13.11.2017 concerning restrictive measures in view of the situation in Venezuela, which was adopted on the legal basis of Article 215 TFEU in order to effectively implement the measures falling within the scope of EU law. Moreover, the validity of the above Decision was extended by Council Decision (CFSP) 2018/1656 of 16.11.2018 in view of the continuation of the regime’s flagrant violations of the rule of law and human rights in Venezuela.
In reaction to the above EU sanctions, on 06.02.2018, the Bolivarian Republic of Venezuela brought an action before the General Court of the European Union (GCEU) seeking the annulment of Regulation 2017/2063 insofar as its provisions concern it, while on 17.01.2019 it submitted a separate application seeking the annulment of Decision 2018/1656, as well as of Implementing Regulation 2018/1653 insofar as their provisions concern it. On 03.05.2018, the Council raised an objection of inadmissibility against the aforementioned application on three grounds, namely that: (a) Venezuela has no legitimate interest; (b) the provisions of Regulation 2017/2063 do not directly concern it; and (c) it is not a ‘natural or legal person’ within the meaning of Article 263 TFEU.
In its judgment of 20.09.2019, the GCEU examined only the second ground of inadmissibility raised by the Council, and dismissed the action as inadmissible insofar as it was directed against Articles 2, 3, 6 and 7 of Regulation 2017/2063, and insofar as it concerned the annulment of Decision 2018/1656 and Implementing Regulation 2018/1653. According to the reasoning of the GCEU, the contested provisions did not ‘directly’ concern Venezuela within the meaning of Article 263(4) TFEU.
Against the above judgement, Venezuela brought an appeal before the CJEU dated 28.11.2019, contesting the part thereof that dismissed the initial action as inadmissible insofar as it was based on Articles 2, 3, 6 and 7 of Regulation 2017/2063, requesting that the action be found admissible and that the case be referred back to the GCEU in order for it to rule on the merits. On 22.06.2021, the CJEU delivered the judgment on this appeal, which is reviewed herein.
2. The judgement of the CJEU
Given that the General Court had only ruled on the Council’s second plea, the CJEU considered it appropriate to begin by examining the third plea –namely whether Venezuela is a ‘legal person’ within the meaning of Article 263 TFEU– noting that this question needs to be answered before the second plea (on legal interest) can be assessed. Besides, the Court recalled that compliance with the conditions of admissibility laid down in the said provision constitutes a matter of public policy on which it may rule ex officio.
It is noteworthy that the Council, in developing its arguments on the relevant plea, has emphasised that a third State should not be considered a ‘legal person’ within the meaning of the said provision unless it has been granted specific rights within the Union’s legal order by virtue of an agreement concluded with it, which is not the case here. Furthermore, it stressed that the relations between the Union and third States are governed by international law, the subjects of which, according to the relevant rules, do not automatically have a right to appeal before the courts of other States. On the contrary, they maintain the right not to be subject to the jurisdiction of another State or that of an international court unless they consented to it.
Following the above arguments put forward by the Council, and the relevant views submitted by the Commission and the intervening Member States, the Court noted that the term ‘legal person’ contained in Article 263 TFEU constitutes an autonomous concept of EU law and must therefore be interpreted solely on the basis of the wording and the context of the provisions set out in the Treaties.
Consequently, starting with a grammatical approach, the Court emphasized that that concept in question must not be interpreted narrowly, recalling that not only private legal persons, but also public entities enjoy locus standi to bring an action for annulment under the said provision. Furthermore, the CJEU added that since the EU legislature takes the view that an entity has an existence sufficient for it to be subject to restrictive measures, consistency and justice require that that entity be also considered to have an existence sufficient to contest those measures.
As regards the contextual and teleological interpretation of the term, the CJEU recalled that the existence of effective judicial review designed to ensure compliance with the provisions of EU law is inextricably linked to the rule of law and the right to effective judicial protection, and that in light of those principles, it must be considered that a third State, as a ‘legal person governed by public international law’, should have locus standi as a ‘legal person’ within the meaning of Article 263 TFEU to bring an action for the annulment of an EU act, where the other conditions laid down in that provision are satisfied.
Later on, regarding the argument put forward by the Council and certain Member States –which opposed this interpretation by observing that third States, and notably Venezuela, have not conferred a corresponding privilege on the Union– the Court responded by stressing that EU obligations to ensure respect for the value of the rule of law cannot in any way be made subject to a condition of reciprocity as regards its relations with third States. It thus concluded that Venezuela, as a State with legal personality under international law, must be considered a ‘legal person’ within the meaning of Article 263 TFEU.
Following its ruling on the above crucial matter, the Court assessed the single ground of appeal concerning the Council’s third plea, namely that the General Court had wrongly interpreted the condition laid down in Article 263 TFEU, according to which the contested act must ‘directly’ concern the applicant. It is recalled that the GCEU held in the judgment under appeal that the said condition was not met, on the grounds that the contested provisions impose obligations only on natural and legal persons who have their registered office or their commercial activities within the Union, and not directly on Venezuela.
Nevertheless, overturning the reasoning of the General Court, the CJEU pointed out that, since the prohibitions introduced by the contested provisions of the Regulation have as a result to prevent Venezuela from obtaining numerous goods and services, they directly affect the legal situation of that State. Moreover, according to its reasoning, the extension of the prohibitions to ‘any natural or legal person, entity or body in, or for use in, Venezuela’ ends up including the government, public bodies, companies and agencies in Venezuela. On that basis, the Court found that the GCEU erred in law in considering that the restrictive measures imposed did not directly affect the legal situation in Venezuela, upholding the single ground of appeal relied on by the appellant.
Finally, the Court examined the Council’s first plea regarding the lack of legal interest on the part of the applicant, in support of which the Council relied, inter alia, on the CJEU judgment in the Front Polisario case, where it held that the applying entity did not have locus standi to seek the annulment of the Decision challenged therein. In rebuttal of this claim, the CJEU held that the prohibitions laid down in the contested provisions of Regulation 2017/2063 are liable to harm the interests, in particular the economic interests, of Venezuela, while their annulment is, by itself, capable of procuring an advantage to the appellant, and rejected the relevant objection. Moreover, as regards the invocation of the Front Polisario case, the Court held that it could not be applied due to substantial differences, not only in the facts but also in law in the two cases.
At this point it should be noted that, according to the assessment of the Court, Regulation 2017/2063 constitutes a ‘regulatory act which does not entail implementing measures’ within the meaning of Article 263(4) TFEU, therefore, the applicant did not have to prove in this case that the contested provisions were of an individual, other than a direct, concern to it.
Conclusions Following all the above considerations, the CJEU set aside the contested judgment of the General Court, to the extent that it dismissed Venezuela’s action for annulment of the provisions of Regulation 2017/2063 concerning restrictive measures and referred the case back to the GCEU to rule on the merits. This analysis presented the judgment, starting from the historical context and continuing with the analysis of the Court’s reasoning and its final ruling. A separate post will identify and analyse the weakness of the judgment, namely the failure to take into account the legal peculiarities of judicial review in the field of foreign policy.
 CJEU C-872/19 Ρ, judgment of 22.06.2021, Venezuela v Council, ECLI:EU:C:2021:507.
 OJ L 295, 14.11.2017, p. 60.
 OJ L 295, 14.11.2017, pp. 21-37.
 OJ L 276, 7.11.2018, pp. 10-11.
 GCEU Τ-65/18, judgment of 20.09.2019, Venezuela v Council, ECLI:EU:T:2019:649.
 CJEU C-872/19 Ρ, judgment of 22.06.2021, Venezuela v Council, ECLI:EU:C:2021:507.
 Para. 22 of the judgment.
 Para. 42 of the judgment.
 Para. 47 of the judgment.
 Paras. 48-50 of the judgment.
 Paras. 51-52 of the judgment.
 CJEU C‑104/16 P, judgment of 21.12.2016, Council v Front Polisario, EU:C:2016:973, paras. 131-133.
 Paras. 83-84 of the judgment.
 Paras. 90-92 of the judgment.