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C O N F I D E N T I A L USEU BRUSSELS 000212 
NOFORN 
SIPDIS 
C O R R E C T E D COPY PARAS MISNUMBERED 
STATE FOR IO, EEB, S/CT, S/P, EUR, L 
TREASURY FOR TFI 
JUSTICE FOR CIVIL DIVISION 
 
E.O. 12958: DECL: 02/23/2020 
TAGS: EFIN ETTC EUN KTFN PINR PTER UNSC
SUBJECT: COMMISSION TERRORISM SANCTIONS LEGAL CHALLENGES 
 
REF: A. 2009 BRUSSELS 1524 
     ¶B. 2010 BRUSSELS 35 
     ¶C. 2009 BRUSSELS 101 
 
Classified By: USEU EconMinCouns Peter Chase for reasons 
1.4 (b) and (d). 
 
¶1.  (SBU) This message contains an Action Request.  Please 
see Paragraph 14.  This message also contains a list of 26 
pending court challenges to EU sanctions designations, as 
received from the European Commission.  Please see Paragraph 
¶13. 
 
¶2.  (C//NF) SUMMARY.  U.S. interagency sanctions officials 
met on February 3 with the European Commission's Legal 
Service to discuss legal issues surrounding targeted 
counterterrorism sanctions.  Commission lawyers gave an 
overview of relevant changes under the EU's Lisbon Treaty, 
commented on procedural innovations in the UN's Al-Qaeda and 
Taliban sanctions regime, and described their strategy toward 
the crucial pending "Kadi II" case.  The Commission seems 
more optimistic about the legal standing of EU 
counterterrorism sanctions than prior to the adoption of 
UNSCR 1904 (REF A).  Commission lawyers called UNSCR 1904 "a 
miracle," but indicated that a staffed and operational 
ombudsperson reviewing de-listing requests in New York would 
be crucial to the survival of EU targeted sanctions.  END 
SUMMARY. 
 
-------------------------------------------- 
LISBON TREATY AND COUNTERTERRORISM SANCTIONS 
-------------------------------------------- 
 
¶3.  (C//NF) Officials from State/L, Treasury/OFAC, 
Justice/Civil Division, and USEU met on February 3 with 
Patrick Hetsch and Minas Konstantinidis of the Commission 
Legal Service. 
 
¶4.  (C//NF) Commission Legal Service perspectives on the 
Lisbon Treaty were consistent with previous USEU reporting 
(REF A/PARAS 10-11, REF B/PARAS 2-5).  Both Council and 
Commission Legal Services continue to argue that sanctions 
involving third countries and UN obligations fall under 
Article 215 of the Treaty on the Functioning of the European 
Union.  The European Parliament would thus maintain only a 
non-binding/advisory role in sanctions legislation and 
implementation.  Parliament argues that targeted sanctions, 
as administrative measures against individuals in the 
counterterrorism domain, should fall under Treaty Article 75, 
under which Parliament asserts ordinary "co-decision" 
authorities.  Hecht views the two legal bases as 
incompatible.  For the Commission's Legal Service, "the 
nature of Article 75 is clear;" it was designed to address 
groups, such as Basque or Corsican separatists, of a 
fundamentally internal nature. 
 
¶5.  (C//NF) Parliament has 60 days from the passage of the 
EU's most recent Regulation implementing targeted UN 
sanctions against Al-Qaeda and the Taliban (i.e., Council 
Regulation (EU) No 1286/2009 of December 22, 2009) to pursue 
the matter before the courts.  The Commission Legal Service 
expects formal EP action by the beginning of March.  An EP 
suit (against the Council, which the Commission would help 
defend) would proceed directly to the high court, due to the 
inter-institutional nature of the issues.  (NOTE: A high 
court ruling is final and cannot be appealed.  END NOTE.) 
Hetsch said that distinctions between the two treaty articles 
were "absolutely new" for the court and that subsequent 
proceedings could last approximately 1.5 years.  In its 
deliberations, the court would assess the content and purpose 
of the act ("the center of gravity," as Commission lawyers 
describe it).  Hetsch said he would be very surprised if 
Parliament won the case and assured us that the Council and 
Commission would ask the court to maintain relevant asset 
freezes even if the Regulation were annulled. 
 
--------------------------------------------- ------- 
COMMISSION COMMENTARY ON UN TERRORISM SANCTIONS REFORM 
--------------------------------------------- ------- 
 
¶6.  (C//NF) Turning to procedural innovations to the Al-Qaeda 
and Taliban sanctions regime adopted in UNSCR 1904, Hetsch 
described the ombudsperson mechanism as "a miracle."  While 
convinced that additional major elements of due process will 
not be possible at the UN level, Hetsch predicted that the 
ombudsperson could prove decisive in many challenges to 
sanctions designations pending in EU courts. 
¶7.  (C//NF) Nevertheless, the Commission lawyers described 
some remaining perceived shortcomings in the UNSCR 1267 
regime, all of which designated terrorists may exploit to 
buttress legal challenges to their listings.  One weakness 
can be found in the fact that States sponsoring UN 
designations also vote on de-listing decisions.  "This is 
formally independent, but effectively not," Hetsch indicated. 
 (NOTE: The European Court of Justice found in the "Kadi I" 
decision of September 2008 that UN-level procedures did not 
guarantee adequate judicial review of sanctions measures for 
individuals wishing to challenge their designations.  It did 
not enumerate UN-level procedures that would guarantee 
fundamental rights as implied under Community law.  END 
NOTE.)  He underscored repeatedly that UNSCR 1904, despite 
its intended impact, was not yet implemented (e.g., an 
ombudsperson is not appointed, new mechanisms are not fully 
resourced).  Hetsch urged that the UN implement UNSCR 1904 
quickly, explaining that these practical concerns would be 
crucial to the survival of EU implementation of targeted UN 
sanctions.  "An ombudsperson with no real impact would be a 
mockery," he told us.  When asked if the results of the 
"mega-review" of existing UN designations (as agreed in UNSCR 
1822) would favorably influence the courts, Konstantinidis 
explained that the European Court of Justice had already 
determined that review to be intergovernmental, and therefore 
not independent, in nature. 
 
--------------------------------------- 
"KADI II" CASE: TIMING AND IMPLICATIONS 
--------------------------------------- 
 
¶8.  (C//NF) Hetsch and Konstantinidis explained that the 
written procedure (i.e., exchange of written legal views) was 
still open in the "Kadi II" case.  They were unable to 
predict when a decision, in this instance from the lower 
court, would be announced.  Theoretically a judgment could 
come at any time (usually with 15 days notice) after an 
initial hearing, since the case is following an accelerated 
procedure. 
 
¶9.  (C//NF) Hetsch outlined the Commission's strategy in the 
case, explaining that its defense was straightforward.  It 
will begin with analysis related to international law, 
calling upon the judges to respect EU Member State 
obligations under Chapter XVI, Article 103 of the UN Charter. 
 Thus, according to Hetsch, the Council's and Commission's 
main defense will effectively tell the courts, "don't second 
guess what is done in New York."  Commission lawyers envisage 
sending a letter to Kadi during the written procedure, 
advising him to avail himself of the UN de-listing process. 
The Commission would like to include a de-listing report from 
the UN ombudsperson, even if only in summary version as 
provided to the applicant, in its submissions to the courts. 
 
¶10.  (C//NF) The Commission is also paying close attention to 
Kadi's litigation before U.S. courts.  It knows that EU 
courts could theoretically ask for facts in support of his 
designation, which are currently missing from UN-issued 
statements.  Hetsch said that the Commission wanted to buy 
time to rely on developments in the U.S. case.  A decision to 
maintain Kadi's designation would imply that a U.S. judge had 
independently reviewed and found credible all available 
information, including at higher classifications.  The 
Commission may thus ask EU judges to await an outcome in the 
U.S. case and/or tell Kadi to pursue his complaint through 
U.S. courts.  Hetsch says that the lower court has thus far 
welcomed opinions and information concerning U.S. 
proceedings.  He hopes to communicate informally with the 
court about major related developments (e.g., the anticipated 
timing of a judgment) in the United States and asked that the 
USG support him in this endeavor.  (COMMENT: The EU's best 
hope of winning the Kadi II case may in fact be a U.S. 
victory in our domestic case.  USEU requests USG support in 
keeping EU lawyers fully informed of related developments. 
END COMMENT.) 
 
¶11.  (C//NF) Hetsch described both best and worst case 
scenarios from the Commission's perspective.  The best case, 
which the Commission considers highly unlikely, would be an 
EU judgment deferring to the UN ombudsperson.  He also 
described the worst case scenario, essentially the ECJ's 
deciding to review Kadi's UN designation on its own.  Hetsch 
then encouraged the USG to begin thinking about 
contingencies.  The Commission plans to appeal any negative 
outcome before the high court and would ask EU judges to 
maintain relevant asset freezes provisionally. 
 
¶12.  (C//NF) Hetsch explained that a worst case outcome 
(i.e., EU court review of UN sanctions designations) would 
likely require court access to "intermediate information." 
He described this as information that is "not so classified 
that a court couldn't see it."  For information at higher 
classifications, a cleared solicitor with the ability to view 
and verify materials from third parties could potentially be 
necessary.  Originators of information (e.g., the UN, a third 
State) would represent complicating factors in any such 
process.  Hetsch said that the handling of classified 
information would be uncharted territory for which EU courts 
know they are currently unequipped.  He nonetheless cited a 
rare clause from the Kadi I judgment, which indirectly 
references Canada's use of cleared solicitors, as proof that 
the ECJ had already asserted its authority to access 
intelligence.  (NOTE: The court's last MEK ruling made a 
similar assertion of the court's right to review underlying 
classified information.  See REF C.  END NOTE.)  The 
Commission lawyers agreed that EU courts could begin to 
exercise those powers (after establishing appropriate 
safeguards for the handling of sensitive information) without 
the need for new statutory authority. 
 
------------------------------------------- 
PENDING COURT CHALLENGES TO EU DESIGNATIONS 
------------------------------------------- 
 
¶13.  (SBU) Subsequent to our meeting, the Commission Legal 
Service provided the following list of court cases concerning 
EU sanctions designations, reported verbatim here.  "Number 
of Case" and "Category" refer to European Court of Justice 
code numbers and EU sanctions programs/implementing 
Regulations, respectively. 
 
¶A. Court of Justice 
------------------- 
 
- Number of Case = C-550/09, Case reference = Istanballu et 
Oban (request for preliminary ruling), Category = Regulation 
2580/2001, Current phase = Written procedure pending 
- Number of Case = C-548/09 P, Case reference = Bank Melli 
Iran (appeal), Category = Iran, Current phase = Written 
procedure pending 
- Number of Case = C-27/09 P, Case reference = France v OMPI 
IV (appeal), Category = R2580, Current phase = Written 
procedure closed 
- Number of Case = C-340/08, Case reference = R c/ H.M. 
Treasury (request for preliminary ruling), Category = 
Regulation 881/2002 Al Qaida, Current phase = Advocate 
General Conclusions of 21 January 2010 - judgment awaited 
- Number of Case = C-380/09 P, Case reference = Melli Bank 
plc c/other parties Council, France, UK (appeal), Category = 
Iran, Current phase = Written procedure closed 
 
¶B. General Court 
---------------- 
 
- Number of Case = T-527/09 AJ, Case reference = C. Ayadi v 
Commission, Category = R881 Al Qaida, Current phase = Request 
for legal aid pending 
- Number of Case = T-4/10, Case reference = Faraj Hassan / 
Commission, Category = R881 Al Qaida, Current phase = Written 
procedure pending 
- Number of Case = T-322/09, Case reference = Al Faqih & MIRA 
/ Commission & Council, Category = R881 Al Qaida, Current 
phase = Written procedure pending 
- Number of Case = T-145/09, Case reference = Bredenkamp et 
al. v Commission, Category = Zimbabwe, Current phase = 
Written procedure pending 
- Number of Case = T-127/09, Case reference = Abdulrahim v 
Commission & Council, Category = R881 Al Qaida, Current phase 
= Written procedure pending 
- Number of Case = T-121/09, Case reference = Al Shanfari v 
Commission & Council, Category = Zimbabwe, Current phase = 
Written procedure closed 
- Number of Case = T-102/09 AJ, Case reference = Elosta / 
Council & Commission, Category = R881 Al Qaida, Current phase 
= Request for legal aid pending 
- Number of Case = T-101/09 AJ, Case reference = Maftah / 
Council & Commission, Category = R881 Al Qaida, Current phase 
= Request for legal aid pending 
- Number of Case = T-85/09, Case reference = Kadi v 
Commission, Category = R881 Al Qaida, Current phase = Written 
procedure closed (accelerated) ("Kadi II") 
- Number of Case = T-45/09, Case reference = Barakaat v 
Commission, Category = R881 Al Qaida, Current phase = 
Withdrawal request from applicant 
- Number of Case = T-409/08, Case reference = Nourridin El 
Fatmi (3) c/Council, Category = R2580, Current phase = Joined 
with T-362/07 and T-76/07, Written procedure closed 
- Number of Case = T-276/08, Case reference = Al-Aqsa 
c/Council (damages), Category = R2580, Current phase = Stayed 
until T-348/07 is decided 
- Number of Case = T-181/08, Case reference = P.P. Tay Za 
c/Council, Category = Burma, Current phase = Written and oral 
procedure closed - judgment awaited 
- Number of Case = T-362/07, Case reference = Nourridin El 
Fatmi (2) c/Council, Category = R2580, Current phase = Joined 
with T-76/07 and T-409/08, Written procedure closed 
- Number of Case = T-348/07, Case reference = Strichting 
Al-Aqsa c/ Council, Category = R2580, Current phase = Written 
and oral procedure closed - judgment awaited 
- Number of Case = T-341/07, Case reference = Jose Maria 
Sison c/Council, Category = R2580, Current phase = Judgment 
for applicant - Procedure on damages pending 
- Number of Case = T-76/07, Case reference = Nourridin El 
Fatmi (1) c/Council, Category = R2580, Current phase = Joined 
with T-362/07 and T-409/08, Written procedure closed 
- Number of Case = T-138/06, Case reference = Taher Nasuf 
c/Council, Category = R881 Al Qaida, Current phase = Written 
and oral procedure closed - judgment awaited ("Kadi I"-like) 
- Number of Case = T-137/06, Case reference = Ghunia Adrabbah 
c/ Council, Category = R881 Al Qaida, Current phase = Written 
and oral procedure closed - judgment awaited ("Kadi I"-like) 
- Number of Case = T-136/06, Case reference = Sanabel Relief 
Agency c/Council, Category = R881 Al Qaida, Current phase = 
Written and oral procedure closed - judgment awaited ("Kadi 
I"-like) 
- Number of Case = T-135/06, Case reference = Al Bashir 
Al-Faqih c/Council, Category = R881 Al Qaida, Current phase = 
Written and oral procedure closed - judgment awaited ("Kadi 
I"-like) 
 
--------------------------------------------- ----- 
ACTION REQUEST/COMMENT: 
EU INTELLIGENCE AND CLASSIFIED INFORMATION SHARING 
--------------------------------------------- ----- 
 
¶14.  (C//NF) Intelligence and classified information sharing 
between EU institutions and Member States is among the most 
sensitive and least developed areas of EU policy and 
procedure, a last bastion of national sovereignty.  EU level 
implementation of UN and autonomous counterterrorism 
sanctions is testing the limits of how long the EU can hold 
out against confronting the practical implications of 
handling these issues across all post-Lisbon Treaty fronts, 
be it co-decision policymaking on terrorism or security 
related issues between the Commission, Council, and 
Parliament, or managing the inevitable legal challenges to 
such policies before EU courts.  Given U.S. security and 
foreign policy equities in EU sanctions and other 
counter-terrorism policies, we should expand U.S.-EU legal 
expert discussions, including the upcoming (mid-March) 
U.S.-EU Legal Dialogue, to advocate:  1) sufficient EU expert 
and policymaker attention to the importance of addressing the 
institutional underpinnings necessary to preserve EU measures 
before their courts; 2) proactively exploring the potential 
implications of sharing information via the U.S.-EU 
classified information sharing agreement with regard to 
subsequent legal challenges; 3) sharing U.S. lessons learned 
and best practices for how our courts have developed the 
means to handle such sensitive classified cases over the past 
decade.  END ACTION REQUEST/COMMENT. 
 
¶15.  (U) State/L, Treasury/OFAC, and Justice/CIV have cleared 
this cable. 
 
KENNARD 
End Cable Text 
 
Zenaida X Toledo  07/30/2008 04:04:14 PM  From  DB/Inbox: 
TRANS 
 
.