On Tuesday 10 September, the Court of Justice of the European Union ruled (aff. C-351/22), that in the context of the sanctions against Russia, confiscation of the entire proceeds of a brokering transaction covered by the prohibition on providing brokering services for military equipment is permitted.
Romanian company Neves 77 Solutions SRL (Neves) acted as intermediary in a transaction between Ukrainian and Indian companies for the sale of radio stations, some manufactured in Russia. Despite being informed by the Romanian authorities that brokerage activities relating to these products were prohibited by the EU, Neves received almost €3 million from the Ukrainian company for these services. The authorities fined it and confiscated the money. A Romanian court asked the Court of Justice whether that prohibition applies where the military equipment concerned was never imported into the EU and whether the national sanctions imposed are compatible with the right to property of the undertaking concerned.
Having confirmed its jurisdiction to interpret a provision of general application in a CFSP decision which forms the basis of national penalty measures imposed on an undertaking, the Court considers that the prohibition on providing brokering services relating to military equipment to an operator in Russia applies even if the products have never been imported into a Member State.
EU law also allows for the automatic confiscation of all sums received in connection with the provision of these services. Although the supplier’s right of ownership over those sums is limited, the Court considers that this ensures that the prohibition is effective and is therefore in principle proportionate in the light of the EU’s legitimate objectives. (Original version in French by Camille-Cerise Gessant)