C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 001524

NOFORN
SIPDIS

STATE FOR IO, EEB, EUR/ERA, S/CT
TREASURY FOR TFI

E.O. 12958: DECL: 11/13/2019
TAGS: ETTC KTFN PTER UNSC EFIN KJUS PINR EUN BE
SUBJECT: TERRORISM SANCTIONS REFORM: EU VIEWS AND PROCEDURES

REF: BRUSSELS 1515

Classified By: USEU ECON MINISTER COUNSELOR PETER CHASE FOR REASONS 1.4
(b) and (d)

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Summary
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1. (C//NF) In preparation for a Belgium-sponsored conference
on UN targeted sanctions reform (REFTEL), USEU held separate
meetings with sanctions officers and legal advisors from the
EU Council Secretariat and the European Commission.
Commission officials posited - but would not speculate on the
likelihood of - a "catastrophic" scenario under which
European courts request additional documentary evidence in
support of sanctions designations, thereby crossing a
threshold into the substance of UN Security Council or EU
Member State decision-making. Even though EU court
procedural rules are silent on the use of intelligence in
support of sanctions designations, EU institutions have
determined that Member States should declassify such
intelligence to the maximum extent possible. Council
officials insisted that the Council would never reject a UN
decision, since any Member State obstructing UN sanctions
would have to justify such action directly in New York. They
also stressed that enhanced due process at thUN would be
helpful but that improvements in the quality of publicly
releasable information were far more important for lawyers
arguing cases before the European courts; no amount of due
process in New York will ever fully appease European courts.
Separately, the European Parliament has questioned the legal
basis by which the EU will administer counterterrorism
sanctions upon entry into force of the EU's Lisbon Treaty.
Parliament has referred the matter to its own Legal Service,
seeking a legal interpretation by which Parliament would have
a "co-decision" role over EU sanctions designations and

program design. END SUMMARY.

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European Commission: Courts May Weigh
Substance over Form
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2. (C//NF) USEU met with a team from the European Commission
in preparation for the Government of Belgium-sponsored
"Seminar on Strengthening the UN Targeted Sanctions through
Fair and Clear Procedures" (REFTEL). Commission
representatives included Albertus Straver, Roger Matthews (a
UK HMT secondee), and Stephane Chardon, all sanctions experts
from the Directorate General for External Relations, along
with Minas Konstantinidis of the Legal Service.


3. (C//NF) Konstantinidis expressed particular concern over
the second Kadi case, which is pending an accelerated
procedure before the European Court of First Instance. He
explained that the UN's statement of reasons is the only
information currently available to the court. Commission
lawyers fear that judges in the case will request additional
documentary evidence, thereby crossing a new threshold into
the details and substance of a UN sanctions designation.


4. (C//NF) Straver posited a "catastrophic" situation in
which an EU judge inquiring into the substance of a UN
decision found no satisfaction. "We should conclude that a
judge who has requested information expects to see it and is
prepared to annul a designation," he continued. Commission
interlocutors could not predict the likelihood of such a
scenario but stressed that lawyers and petitioners had shown
a great desire to pry into the substantive detail of UN and
EU decision-making. A high court decision annulling an
individual sanctions designation would leave no outlet for
appeal and would remove the grounds for a related asset
freeze. Similarly, should the high court strike down an
underlying implementing Regulation, EU Member States lacking
national UN counterterrorism sanctions implementation
legislation would lose the legal authority to implement asset
freezes domestically via the EU mechanism. Straver inquired
about classified information available at the UN, claiming

BRUSSELS 00001524 002.2 OF 003


that the Commission's recent meeting with the 1267 Committee
Chair and Monitoring Team officials seemed unclear on this
point.


5. (C//NF) ECONOFF asked if the Commission had sought
support from EU Member States or encouraged them to share
classified information with European courts. Konstantinidis
replied that the rules of proceedings for European courts
were silent on the use of intelligence but that the courts
have expressed willingness in principle to admit additional
sources of information. The Commission and Council have
nonetheless determined that EU Member States should
declassify intelligence supporting sanctions designations to
the maximum extent possible, since EU courts have indicated
that some information must be provided to designated
individuals and therefore must be declassified. "If we did
receive classified information, we wouldn't know what to do
with it," he confided. Straver further emphasized the
preference for unclassified information by highlighting the
importance of public opinion. He noted that the select cases
making headlines had led Members of the European Parliament
to create enormous political trouble. He opined that
European courts had not given sufficient credit to procedural
innovations included in UNSCR 1822 but insisted that the
court's fundamental criticism was that due process standards
in New York were clearly insufficient.

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EU Council Secretariat: Robust, Accurate,
Unclassified Information is Vital
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6. (C//NF) USEU subsequently met with Francesco Fini of the
EU Council Secretariat Directorate General for External and
Politico-Military Affairs and Richard Szostak of the
Council's Legal Service.


7. (C//NF) Fini and Szostak said that a new EU
counterterrorism sanctions Regulation should be complete by
the end of 2009. Fini noted that the Council could create a
deadline for the European Parliament's required, but
non-binding, opinion. They described the draft Regulation as
primarily a codification of existing internal due process
measures. Under current practices, the Commission sends a
statement of reasons (e.g., the UN statement of case or
narrative summary) to the affected party upon notification of
the EU's implementation of a UN sanctions designation. The
individual or entity then has four to six weeks to submit
"observations." EU institutional reviews occur only when
observations involve new information, i.e. beyond simple
declarations of innocence without substantive basis. In at
least one case, the designee successfully demonstrated
manifest factual errors in the UN-provided statement of
reasons.


8. (C//NF) Upon passage of the draft Regulation, EU reviews
of UN sanctions designations will involve a new Regulatory
Committee that will operate by "comitology." The Commission
will thus prepare paperwork and propose actions, but
decision-making authority will remain with EU Member States.
The European Parliament will have only an informational role
in the Regulatory Committee, ensuring that the Council does
not exceed its legislative mandate. Whenever appropriate,
the EU Presidency will advocate internally on behalf of a
petitioner presenting potentially exculpatory information.
Final results of any EU review will be communicated to the UN
1267 Committee. Fini and Szostak insisted that the Council
would never reject a UN decision, since any Member State
obstructing UN sanctions would have to defend itself directly
in New York and would not have recourse to the EU de-listing
process. In their view, the EU would limit its objections to
requests for additional information from UN institutions and
Member States. Such exchanges would address EU concerns
(e.g., factual inaccuracies), "without putting the UN in a
difficult situation."


9. (C//NF) Turning to the subject of future
sanctions-related challenges in European courts, Szostak
expressed relief that the European courts have thus far

BRUSSELS 00001524 003.2 OF 003


refrained from assessing UNSC political decisions. He
expects this deference to continue, provided that UN
procedures and narrative summaries are "solid." Szostak
averred, however, that factual errors in statements of case
had been the most significant problem for the Council Legal
Service. He stressed that enhanced due process in New York
would be helpful but that improvements in the quality of
publicly releasable information were far more important for
lawyers arguing cases before the European courts. In his
view, robust, accurate statements are "the key to the
survival of the regime in New York." Fini and Szostak agreed
that no amount of due process in New York will ever appease
European courts, which will continue to require internal EU
review to compensate for perceived gaps in the UN process.
But EU lawyers depend on pointing to incremental improvements
in New York to justify mainta

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"cQdance with the ordinary
legislative procedure" (i.e., co-decision).


11. (SBU) In concluding teuldr to Parliament's
Legal SQrvice "to protect the jurisdiction of this
institution." Contacts believe that the Commission and
Council position will prevail but cautQon that Parliament
retains the option of chalQenging these other institutions
before the EUcourts.
MURRAY