SH (Common foreign and security policy - Restrictive measures adopted in view of the situation in Libya - Judgment) [2019] EUECJ C-168/17 (17 January 2019)

SH (Common foreign and security policy - Restrictive measures adopted in view of the situation in Libya - Judgment) [2019] EUECJ C-168/17 (17 January 2019)

Payments of guarantee costs by EU banks to Libyan banks listed in Annex III fall within the scope of Article 5(2) Regulation No 204/2011; payments to Libyan banks not listed or between EU banks are not covered unless legal or financial links result in indirect availability to designated entities. Article 12 prohibits claims by Libyan entities or those acting on behalf of the Libyan government in connection with contracts affected by restrictive measures. Article 9 does not apply to payments of costs under the agreements at issue. Article 17(1) Regulation 2016/44 applies to costs calculated after its entry into force.

Citation
[2019] EUECJ C-168/17
Parties
Applicant: SH; Respondent: TG; Intervener: UF; Third Party: Sahara Bank; Third Party: Libyan Housing and Infrastructure Board (HIB)
Jurisdiction
European Union
Judgment Date
17 January 2019
Procedural Posture
Preliminary Ruling / Referral From Kúria (supreme Court, Hungary)
Outcome
Interpretative ruling issued; national court to apply findings to resolve dispute.
Legal Topics
Restrictive Measures, Bank Guarantees, Interpretation of EU Regulations, Claims Under Guarantee, Freezing of Funds
EU Sanctions Law International Law Banking Law Restrictive Measures Bank Guarantees Interpretation of EU Regulations Claims Under Guarantee Freezing of Funds

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Parties

SH

Applicant

TG

Respondent

UF

Intervener

Sahara Bank

Third Party

Libyan Housing and Infrastructure Board (HIB)

Third Party

Procedural Posture

Preliminary Ruling / Referral From Kúria (supreme Court, Hungary)

Legal Issues

  1. 1 Applicability of EU sanctions regulations to payment of guarantee costs under counter guarantee agreements involving Libyan entities
  2. 2 Interpretation of Articles 5, 9, 12(1) of Regulation No 204/2011 and Article 17(1) of Regulation 2016/44
  3. 3 Scope of prohibition on making funds available to designated persons/entities

Ratio Decidendi

Payments of guarantee costs by EU banks to Libyan banks listed in Annex III fall within the scope of Article 5(2) Regulation No 204/2011; payments to Libyan banks not listed or between EU banks are not covered unless legal or financial links result in indirect availability to designated entities. Article 12 prohibits claims by Libyan entities or those acting on behalf of the Libyan government in connection with contracts affected by restrictive measures. Article 9 does not apply to payments of costs under the agreements at issue. Article 17(1) Regulation 2016/44 applies to costs calculated after its entry into force.

Court Disposition

Interpretative ruling issued; national court to apply findings to resolve dispute.

Orders

  • Article 5(2) Regulation No 204/2011 applies to payments by EU banks to Libyan banks listed in Annex III; not applicable to payments to Libyan banks not listed or between EU banks unless indirect links exist.
  • Article 12 Regulation No 204/2011 applies to claims by Libyan banks acting on behalf of the Libyan government; not applicable to payments between EU banks.