Partner & Head of International
A Guide to EU Sanctions
EU sanctions may target governments of non-EU countries, as well as companies, groups, organisations, or individuals through the following measures:
EU sanctions apply only within the jurisdiction of the EU and the obligations they impose are binding on EU nationals or persons located in the EU or doing business there. Since the end of the Brexit transition period on 31 December 2020, EU sanctions regimes and designations no longer apply in the UK.
Proposals for restrictive measures including proposed designations are made by individual Member States or by the EEAS led by the High Representative of the Union for Foreign Affairs and Security Policy. These proposals are then discussed by the relevant working party within the EU Council. Once agreed, they are sent to the EU Council for approval. CFSP decisions such as these must be adopted unanimously.
The EU Council provides in its sanctions guidelines that the decision to subject a person or entity to targeted restrictive measures requires clear criteria, tailored to each specific case, for determining which persons and entities may be listed. These criteria are contained in the legislation underpinning the relevant sanctions regime.
The guidelines also state that proposals for listing must be accompanied by accurate, up-to-date and defendable statements of reasons.
Council decisions enter into force upon publication in the Official Journal of the European Union.
It is worth noting that the EU Council is under an obligation to communicate to the person concerned the evidence used against them to justify the restrictive measures imposed on them within a reasonable period after those measures are enacted (see Kadi I at paragraphs 348 and 349).
Although the EU Council is obliged to keep restrictive measures under constant review, it is open to listed individuals and entities to challenge them through an administrative process by petitioning the Council directly to request de-listing.
Listed individuals and entities may submit a request directly to the EU Council (together with supporting documentation) that the decision to list them be reconsidered and restrictive measures against them be lifted. Further details are available on the Council’s website.
A de-listing request will be considered by the competent regional working party on the basis of a preliminary analysis prepared by the EEAS and the Council Legal Service. The request for de-listing and the EU’s response will be discussed within the Foreign Relations Counsellors Working Group (also referred to as “RELEX working party”), which deals specifically with legal, financial and institutional issues of the CFSP. Further details on the procedure for de-listing are set out at paras 18-20 of Annex I of the 2012 Council Guidelines.
Both CFSP Council Decisions and Regulations implementing sanctions measures may be challenged before the Court of Justice of the European Union by way of an ‘annulment action’ under Article 263 of the Treaty on the Functioning of the European Union. Importantly, EU sanctions can be challenged even when they are implemented pursuant to an obligation imposed on the EU by UN Security Council resolution (see Kadi I at paragraph 299).
The General Court has jurisdiction to hear and determine at first instance challenges to sanctions measures. A decision of the General Court may then be appealed to the Court of Justice of the European Union. Annulment actions must be brought before the General Court within two months of the publication of the measure under challenge, its notification, or in the absence of notification, of the day on which it came to the knowledge of the applicant. This two-month period can be extended on account of distance from Luxembourg by a single period of 10 days.
As mentioned above, since the end of the Brexit transition period on 31 December 2020 EU sanctions regimes and designations no longer apply in the UK. As a result, no licence is required from HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) for UK persons to accept payment from persons and entities listed by the EU, including to accept payment for legal fees (provided the person in not designated in the UK). The situation is of course different for EU-persons.
Following a challenge of an EU sanctions designation in the EU courts, the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party (assuming they have been applied for in the successful party’s pleadings).
Practically, the successful party will need to compile and provide the unsuccessful party with a detailed schedule setting out all costs incurred which are responsive to the Court’s order. Recoverable costs are defined as sums payable to witnesses and experts and expenses necessarily incurred by the parties for the purpose of the proceedings, in particular the travel and subsistence expenses and the remuneration of agents, advisers or lawyers. This commonly includes (1) solicitors fees; (2) the legal fees of barristers instructed in the matter; and (3) costs incurred by way of other disbursements (for example printing and travel charges).
It should be noted that the levels of costs recovery in the EU courts following sanctions proceedings are relatively low when compared with, for example, recovery in the UK courts.
Any natural or legal person can bring an action for damages before the EU courts if they have suffered harm due to the actions or omissions of an EU institution.  They have five years to bring the action from the moment the damage has materialised.
In accordance with settled case-law, three cumulative conditions need to be satisfied:
The EU Courts may grant different types of damages, including material damages, non-material damages such as “moral” damages for harm to reputation, loss of profit and future damages. However, in the context of sanctions cases the EU courts have approached damages claims restrictively, and have generally been reluctant to award damages even where the sanctions have been found to be unlawful.
The material in this Guide is for general information only and does not constitute legal advice. The content of this page is accurate as of January 2023.
 The full list of the CFSP’s objectives is set out at TEU 21(2).
 See TEU 24(1).
 See The 2012 Council Guidelines available here at paragraphs 16 and 17.
 Joined Cases C-402/05 P and C-415/05 P Kadi and Al Barakaat International Foundation v Council and Commission  ECR I6351 here. The EU Kadi litigation arose from Mr Kadi’s challenge to sanctions wrongly imposed on him by the EU Council following the 9/11 attacks in New York. In its 2008 judgment the ECJ delivered a landmark decision in favour of Mr Kadi and annulled his designation on the grounds that it breached his fundamental human rights. It was as a result of this judgment that the Office of the Ombudsperson was created by the UN Security Council in December 2009 (see further in the “UN Sanctions” section of this guide). Mr Kadi was represented in this litigation (and his wider global litigation) by Carter-Ruck.
 See section entitled “Request for lifting of restrictive measures” on the Council’s website available here.
 See The 2012 Council Guidelines available here.
 See TFEU art 256(1).
 See TFEU article 263(6).
 See article 60 of the rules of procedure of the General Court.
 See article 134(1) of the rules of procedure of the General Court.
 See article 140 of the rules of procedure of the General Court.
 See article 340(2) of the TFEU.