Op-Ed: “When does a third country have standing to challenge an EU act in EU courts? The Opinion of AG Hogan in Venezuela v Council” by Luigi Lonardo
Advocate General Hogan, in his Opinion in Venezuela v Council (C-872/19 P) delivered on 20 January 2021, and as noted on EU law Live, has given a bold answer to a procedural question that could carry important repercussions for (the image of) the EU’s external posture. In suggesting that a third country may challenge EU measures in EU courts – provided they meet the requirements of the fourth paragraph of Article 263 TFEU – the Advocate General proposed that the Court of Justice adopt a position that exudes confidence, as it amounts to recognising a right to be sued even in the absence of reciprocity.
Can Venezuela challenge an EU restrictive measure that prohibits providing any natural or legal person technical or financial assistance or other services related to certain military equipment to be used in Venezuela? This was, in a nutshell, the fact that gave rise to the judgment of the General Court (Fourth Chamber, Extended Composition) of 20 September 2019, Venezuela v Council (T-65/18). As a matter of EU law, this most interesting question hinges preliminarily on the procedural issue of whether Venezuela enjoys locus standi to maintain the proceedings. The standing requirements are provided for in the fourth paragraph of Article 263 TFEU. Pursuant to that provision, ‘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 against a regulatory act which is of direct concern to them and does not entail implementing measures’.
The General Court held that Venezuela had not demonstrated that it was directly concerned by the measures within the meaning of the fourth paragraph of Article 263 TFEU. It therefore held that the proceedings were inadmissible because Venezuela lacked the necessary standing to bring its annulment action – without it being necessary to examine whether that country was a legal person for the purposes of Article 263 TFEU.
On appeal (C-872/19 P), Venezuela challenged the General Court’s decision. In his Opinion AG Hogan considered whether the appellant is a legal person for the purposes of the fourth paragraph of Article 263 TFEU, and answering in the affirmative, also examined whether it is also directly concerned by the restrictive measures in question: this is also answered in the affirmative, in explicit disagreement with the General Court.
Is Venezuela a legal person for the purposes of the fourth paragraph of Article 263?
The Advocate General’s (AG) answer to this question was a decisive yes. It is submitted that such an answer is convincing, even though the reasoning on the international law aspects might have been more tightly argued. In any case legal personhood is not decisive to establish standing under EU law, as it is simply a necessary condition (as mentioned, for the AG it is not even necessary).
AG Hogan’s Opinion contains interesting reflections on the role of the EU in international relations. Principles of international comity entail that sovereign states should be able to sue in the courts of another sovereign (point 65 of the Opinion). The US Supreme Court case of Sabbatino is quoted as authoritative and persuasive precedent. In that case, the Supreme Court had held that under ‘principles of comity governing this country’s relations with other nations, sovereign states are allowed to sue in the courts of the United States’. From this, the AG concludes that ‘it is clear that [Venezuela] is a legal person for the purposes of the fourth paragraph of Article 263 TFEU’ (point 68 of the Opinion). The reasoning could perhaps be clearer here: principles of international comity suggest that the concept of ‘legal person’ in Article 263 TFEU ought to be interpreted as including non-EU sovereign countries. Why the EU would be bound by or should follow principles of international comity is not specified in the Opinion (it is merely said that is ‘appropriate’, point 72), but this position is, as mentioned, convincing (for another appeal to international comity see AG Szpunar’s Opinion in Eva Glawischnig-Piesczek v Facebook Ireland Limited, C-18/18, point 100). Correctly, the AG refused the arguments, proposed by the Council and other intervening parties, that the international law on immunities precluded the standing of Venezuela: immunity is about légitimation passive (not being sued), here the question was about légitimation active (being able to sue).
As a matter of EU law, the CJEU had incidentally considered whether a third country may bring an action under the fourth paragraph of Article 263 TFEU on a couple of other occasions (Cambodia v Commission T-246/19 paragraph 51; Poland vCommission, T-257/04 paragraphs 51 and 52). The Court had in any case interpreted broadly the notion of legal person for the purposes of that provision. Strikingly, the AG contends that the precedent of PKK and KNK v Council (C-229/05 P) suggests that the requirement of being a legal person is indeed not even a necessary condition to establish standing, and that if Venezuela can establish it is directly and individually concerned by an EU measure, it ‘must have access to the EU Courts to protect its rights, irrespective of its legal qualification under national, international or perhaps indeed EU law’ (point 79).
Even if convincing, the part of the Opinion on legal personhood carries far reaching consequences for the EU’s external posture, in two respects. First, it sends a strong signal that EU courts are open for third countries to challenge EU law – to challenge, that is, the fruit of democratic deliberation. It places strong confidence in the EU judiciary, especially considering that there would not necessarily be reciprocity. Second, in practice, if read in conjunction with other judgments of the Court, it is almost tantamount to an invitation to use EU courts as a forum for the solution of (political?) international controversies. In Western Sahara (C-266/16 paragraph 63), the Court of Justice found that the EU cannot act contrary to the collective right to self-determination: what stops the Palestinian Authority from challenging EU acts in so far as they do not recognise it as a sovereign state? Or indeed the Kurdistan Workers’ Party (PKK)?
Is Venezuela directly concerned by the restrictive measures?
The General Court found that the challenged restrictive measure did not impose prohibitions on Venezuela and, at most, only had indirect effects on it. This is how (certain) sanctions work: they ‘target’ the third country in so far as they prohibit natural or legal persons of a Member State to provide the goods and services in question. Formally, the General Court held, the sanctions do not concern Venezuela directly but only indirectly (the General Court also distinguished the case from the precedent of Almaz-Antey (T-255/15), where the applicant, a Russian company, was explicitly and specifically referred to in the sanctions; it also considered that a State is not merely an economic operator).
The AG voiced strong disagreement with such an approach, which he referred to as ‘highly artificial and unduly formalistic’ (point 109). The AG reasoned, more convincingly, as follows: first, Venezuela is indeed directly included in the restrictive measures because these prohibit the sale of equipment to ‘any legal person, entity, or body (…) in Venezuela’ (Article 6 and 7 of the contested measure), thus including ‘Venezuela’s government, public bodies, corporations or agencies, or any person or entity acting on their behalf or at their direction’ (point 110). Second, the fact that for ratione loci and ratione personae the restrictive measure only ‘applies’ for example on the EU’s territory does not bear relevance for the issue of direct concern: the sanctions clearly affect Venezuela’s legal situation (point 113). This is the case even with restrictive measures of general application, imposing obligations on persons and entities defined in the abstract (footnote 86).
Indeed, the AG concludes, ‘the inclusion of persons or entities subject to restrictive measures in a list results in the persons or entities being both directly and individually concerned by the measures’ (point 115). In any case, the AG had noted at footnote 2 that the restrictive measures challenged by Venezuela ‘which was adopted on the basis of Article 215 TFEU, is a regulatory act and that it is thus sufficient to show that [Venezuela] is directly concerned by that measure’.
The conclusion that Venezuela is directly concerned may sit uncomfortably with the finding in Rosneft (C-72/15, paragraph 99) that measures of general applications are not subject to the Court’s jurisdiction. In that case, one of the measures of general application was worded as follows: ‘The direct or indirect provision of associated services necessary for the following categories of exploration and production projects in Russia, including its Exclusive Economic Zone and Continental Shelf, by nationals of Member States, or from the territories of Member States, or using vessels or aircraft under the jurisdiction of Member States shall be prohibited’. Clearly, this bears some resemblance to the restrictive measures that Venezuela is seeking to challenge. Quite how much resemblance is for the Court of Justice to determine.
Luigi Lonardo is Lecturer in EU law at University College Cork (firstname.lastname@example.org)