delivered on 3 October 2018 (1)

Case C‑168/17

SH

TG,

intervening party:

UF

(Request for a preliminary ruling from the Kúria (Supreme Court, Hungary))

(Common foreign and security policy — Restrictive measures in view of the situation in Libya — Regulation (EU) No 204/2011 — Article 5(2) — Prohibition on making funds available to persons listed in Annex III to that regulation — Article 12 — Provision excluding claims — Article 9 — Payments exempted from the prohibition laid down in Article 5(2) — Series of contracts intended to provide a guarantee for the benefit of a body included in the list in Annex III to the regulation)

In the reference for a preliminary ruling which is the subject of the present Opinion, the Kúria (Supreme Court, Hungary) asks the Court a number of questions concerning the interpretation of Article 5(2), Article 9 and Article 12 of Council Regulation (EU) No 204/2011 of 2 March 2011 concerning restrictive measures in view of the situation in Libya, (2) as well as Article 17 of Regulation 2016/44. (3) The questions have been raised in the context of a dispute between two banks, SH and TG, both established in the European Union, concerning the payment, by the former, of commission and other guarantee charges to the latter, under the terms of two agreements concluded to counter-guarantee obligations assumed by a Libyan bank in respect of a Libyan body in relation to a procurement contract concluded between that body and a Hungarian company.

On 28 February 2011, the Council adopted Decision 2011/137/CFSP. (4) In accordance with United Nations Security Council Resolution 1970 (2011) (‘UNSCR 1970 (2011)’) (5) and subsequent resolutions, that decision provided for an arms embargo, a ban on internal repression equipment, as well as restrictions on the admission and the freezing of funds and economic resources of certain persons and entities involved in serious human rights abuses against persons in Libya, including by being involved in conducting attacks, in violation of international law, on civilian populations and facilities. (6)

On 2 March 2011 the Council adopted Regulation No 204/2011, in order to provide for the measures necessary to implement the embargo.

Under Article 5(1) of that regulation, ‘all funds and economic resources belonging to, owned, held or controlled by the natural or legal persons, entities and bodies listed in Annexes II and III shall be frozen’. (7) Paragraph 2 of that Article provides that ‘no funds or economic resources shall be made available, directly or indirectly, to or for the benefit of the natural or legal persons, entities or bodies listed in Annexes II and III’. (8) Under Paragraph 3 of that Article, ‘the participation, knowingly and intentionally, in activities the object or effect of which is, directly or indirectly, to circumvent the measures referred to in paragraphs 1 and 2 shall be prohibited’.

Under Article 9(1)(a) and (b) of Regulation No 204/2011: ‘Article 5(2) shall not apply to the addition to frozen accounts of: (a) interest or other earnings on those accounts; or (b) payments due under contracts, agreements or obligations that were concluded or arose before the date on which the natural or legal person, entity or body referred to in Article 5 has been designated by the Sanctions Committee, the Security Council or by the Council, provided that any such interest, other earnings and payments are frozen in accordance with Article 5(1).’ (9)

Article 12 of Regulation No 204/2011, in its original version, provided as follows: ‘No claims, including for compensation or any other claim of this kind, such as a claim of set-off or a claim under a guarantee, in connection with any contract or transaction the performance of which was affected, directly or indirectly, wholly or in part, by reason of measures decided upon pursuant to UNSCR 1970 (2011), including measures of the Union or any Member State in accordance with, as required by or in any connection with, the implementation of the relevant decisions of the Security Council or measures covered by this Regulation, shall be granted to the Government of Libya, or any person or entity claiming through it or for its benefit’. That Article was subject to two subsequent amendments, (10) the second by Regulation No 45/2014. (11) Article 12(1) and (2) of Regulation No 204/2011, as amended by Regulation No 45/2014, provides:

Regulation No 204/2011 was replaced from 20 January 2016 by Regulation 2016/44. The text of Article 12 of Regulation No 204/2011 is incorporated, without amendments, into Article 17 of Regulation 2016/44.

II. The dispute in the main proceedings, the questions referred and the procedure before the Court

The facts in the main proceedings, as they appear from the order for reference and the case file, may be summarised as follows.

On 7 July 2009 the Libyan Housing and Infrastructure Board (‘HIB’), a Libyan entity as contracting authority, and UF (intervener in support of the appellant in the main proceedings), a company governed by Hungarian law, as contractor, concluded a contract for the construction of public infrastructure in the Libyan region of Zawya.

In connection with that contract, HIB required UF to provide two bank guarantees, a guarantee of repayment of the advance payment that UF received from HIB (‘the APG guarantee’) and a proper performance guarantee (‘the PG guarantee’). HIB requested that those guarantees be issued in its favour by the Libyan bank Sahara Bank. The latter sought a counter-guarantee and the provision of a letter of credit from TG (the respondent in the main proceedings), which, in turn, requested that SH (the appellant in the main proceedings), act as counter-guarantor.

On 16 October 2009, SH and UF concluded an agreement whereby SH undertook to issue a counter-guarantee in favour of TG (‘the SH APG counter-guarantee’), in order to provide an indemnity in respect of the counter-guarantee that TG was required to issue in favour of Sahara Bank (‘the TG APG counter-guarantee’) in respect of the APG guarantee provided by the Libyan bank to HIB. In implementation of that agreement, on 20 November 2009 the SH APG counter-guarantee was issued in favour of TG, amounting to LYD 69499610 and due to expire on 14 September 2013. As a result, on 24 November 2009 the TG APG counter-guarantee was issued in favour of Sahara Bank, which was due to expire on 30 August 2013.

On 16 October 2009 SH and UF also concluded an agreement whereby SH undertook to issue a counter-guarantee in favour of TG (‘the SH PG counter-guarantee’) in order to guarantee the stand-by irrevocable letter of credit that TG was required to issue in favour of Sahara Bank (‘the TG PG counter-guarantee’) in respect of the PG guarantee provided by the Libyan bank to HIB. In implementation of that agreement, on 16 December 2009 the SH PG counter-guarantee was issued in favour of TG, amounting to EUR 6567000 and due to expire on 15 July 2014. As a result, on 17 December 2009 the TG PG counter-guarantee was issued in favour of Sahara Bank, which was due to expire on 30 June 2014.

In accordance with the agreements concluded between SH and TG in relation to the issuing of the TG APG counter-guarantee and the TG PG counter-guarantee, SH undertook to repay TG the sums paid by the latter to Sahara Bank and to pay, on a quarterly basis, an annual commission of 1.30%.

14.SH fulfilled its payment obligations to TG until March 2011.

15.On 2 March 2011 Regulation No 204/2011 was adopted. HIB and Sahara Bank were included in the list in Annex III to the regulation and remained on that list until 29 January 2014 (*12) and 2 September 2011, respectively. (*13)

On 20 December 2012 SH and TG signed a memorandum of agreement to regulate their relations in order to take into account the consequences of the adoption of Regulation No 204/2011. On the same date they concluded a tripartite deposit agreement with a custodian bank (‘the deposit agreement’). In accordance with Article V of that agreement, the sums deposited (*14) were to be paid to TG in the event that HIB was removed from the list prior to the expiry of the SH APG and PG counter-guarantees and the letter of credit (14 September 2013 and 15 July 2014 respectively). Otherwise, the sums in question were to be repaid to SH. SH therefore continued to make regular payments of the sums due into the deposit account in connection with the TG APG and PG counter-guarantees.

17.Following an application by HIB, Sahara Bank requested on a number of occasions the enforcement of the TG APG counter-guarantee. TG refused to comply on the ground that that request was unlawful. By final order of 22 April 2013, the Fővárosi Ítélőtábla (Budapest Regional Court of Appeal, Hungary) prohibited TG from making the payment to Sahara Bank as long as HIB remained on the list in Annex III to Regulation No 204/2011.

18.On 10 January 2013 TG sought the enforcement of the SH APG counter-guarantee. SH refused, as the restrictive measures were still in force.

19.On 14 September 2013 the SH APG counter-guarantee expired. On 17 July 2014 the SH PG counter-guarantee also expired, without any request for enforcement having been made. As a result, SH asked TG to agree to release the deposited funds and to provide the necessary statement of intent to the custodian bank. TG refused, however, to make such a statement.

SH therefore brought proceedings seeking performance of TG’s obligations under the deposit agreement. By way of a counter-claim, (*15) TG requested that SH be ordered to pay the costs related to the provision of the counter-guarantee in question, including the reimbursement of sums already paid to Sahara Bank. (*16)

21.The court of first instance upheld SH’s application and agreed to the release of the sums deposited for the benefit of the latter. In this regard, the judgment has become final. Regarding the counter-claim, the court rejected the part concerning the sums paid by TG to Sahara Bank and upheld the part relating to the guarantee commission payable by SH to TG. According to that court, that commission constituted consideration in respect of a service provided by a legal person governed by Hungarian law and did not fall within the scope of Regulation No 204/2011. SH was therefore ordered to pay the sum of EUR 1 352 713.04 to TG, including default interest. SH, UF and TG all appealed against the judgment delivered by the court of first instance.

22.On appeal, the judgment at first instance was partially reversed and the counter-claim was dismissed in its entirety. On the one hand, the court of appeal held that the counter-claim was unfounded in the light of the deposit agreement, which had amended the initial agreements between SH and TG, and on the other hand, held that, under the restrictive measures against HIB, TG was not entitled to provide any guarantee and was not therefore entitled to the related costs. TG lodged an appeal against the judgment of the court of appeal before the Kúria (Supreme Court), the referring court.

23.That court considers that, in order to establish whether — in the chain of contracts concluded with the aim of providing bank guarantees in favour of HIB — TG is entitled to payment of the costs of the counter-guarantees issued on the instructions of SH, it is necessary to interpret EU law, in particular, Articles 5 and 12 of Regulation No 204/2011 and, if applicable, Article 9 thereof and Articles 5, 9 and 17 of Regulation 2016/44.

24.The order for reference mentions that the parties to the main proceedings have approached the European Commission (Service for Foreign Policy Instruments (FPI)) to obtain a legal assessment of the situation. On 18 November 2013 the FPI issued a legal opinion, according to which the correct procedure was not to make funds available, directly or indirectly, to or for the benefit of HIB, since that entity was included in the list in Annex III to Regulation No 204/2011. On 10 March 2014, the FPI issued a second opinion, following a request from the Permanent Representation of France to the European Union, in which it made a distinction between a ‘request to enforce the guarantee’ and a ‘payment in fulfilment of the guarantee’. According to the FPI, if Article 12 of Regulation No 204/2011 is not applicable, the ‘request to enforce the guarantee’ for the benefit of a body on the list may be accepted, but ‘payment in fulfilment of the guarantee’ may not be made if such a body falls within the scope of the measures referred to in Article 5 of Regulation No 204/2011, unless such payment may be made under Article 9 of that Regulation.

It is in this context that, by order of 23 March 2017, the Kúria (Supreme Court) stayed the main proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

(1)Do the following obligations to pay the costs arising under a guarantee, derived from a number of counter-guarantee agreements concluded, as part of a chain of agreements, for the purpose of issuing a bank guarantee in favour of [HIB], fall within the scope of Regulation No 204/2011 or, as the case may be, Regulation 2016/44:

(1.1)where, under a counter-guarantee agreement, a bank established in the European Union has an obligation to pay costs to a Libyan bank which is included on the prohibition list in Annex III to Regulation No 204/2011;

(1.2)where, under a counter-guarantee agreement, a bank established in the European Union has an obligation to pay costs to a Libyan bank which is not included on the prohibition list in Annex III to Regulation No 204/2011 but the bank guarantee is issued in favour of HIB, which is included on that list;

(1.3)where, during the period following the amendment of Regulation No 204/2011 by Regulation No 45/2014, Regulation No 204/2011 prohibits direct or indirect payments to any Libyan entity;

(1.4)where the obligation to pay the costs arising under the guarantee derives from a counter-guarantee agreement concluded, in the context of the relationship between two banks established in the European Union, within a chain of agreements, for the purpose of issuing a bank guarantee in favour of HIB;

(1.5)where calculation of the costs arising under the guarantee takes place after expiry of the guarantee period, in legal proceedings, after the entry into force of Regulation 2016/44?

(2)If the obligation referred to in points 1.1 and 1.2 above to pay the costs arising under a guarantee falls within the scope of the regulation, should the costs so arising that are paid to a Libyan bank — which was also included for a time on the prohibition list in Annex III to Regulation No 204/2011 –– for the purpose of issuing a guarantee of repayment of the advance and a guarantee of proper performance in favour of HIB be considered to constitute funds used directly or indirectly for the benefit of the legal persons, entities or bodies listed in Annex III to Regulation No 204/2011?

(3)Is Article 12(1)(b) of Regulation No 204/2011 to be interpreted, during the period following the amendment of that regulation by Regulation No 45/2014 (point 1.3), as meaning that the costs and expenses claimed by a Libyan bank and paid, under a counter-guarantee agreement, by a bank established in the European Union should be considered to constitute, directly or indirectly, claims under a guarantee?

(4)Must a bank established in the European Union which, under a counter-guarantee agreement concluded, within a chain of agreements, for the purpose of issuing a bank guarantee in favour of HIB, is obliged to pay the costs arising under the guarantee to a Libyan entity (point 1.4) be considered to be a person or entity within the meaning of Article 12(1)(c) of Regulation No 204/2011, as amended by Regulation No 45/2014 — that is, a person or entity acting through or on behalf of or for the benefit of one of the persons, entities or bodies referred to in point (a) or (b) of Article 12(1)? Should the costs arising under the guarantee claimed by that bank from another bank established in the European Union be considered to constitute, directly or indirectly, claims under a guarantee?

(5)Does the exclusion rule in Article 9 of Regulation No 204/2011 refer to any payment?

(6)Where calculation of the costs arising under a guarantee takes place after the entry into force of Council Regulation 2016/44, which repealed Regulation No 204/2011 but contains provisions that are in essence identical (point 1.5), will Regulation 2016/44 be applicable for the purpose of resolving the dispute between the parties and must Article 17(1)(b) of that regulation be interpreted as meaning that the costs and expenses claimed by a Libyan bank and paid, under a counter-guarantee agreement, by a bank established in the European Union, are be considered to constitute, directly or indirectly, claims under a guarantee? Must a bank established in the European Union which, under a counter-guarantee agreement concluded, within a chain of agreements, for the purpose of issuing a bank guarantee in favour of HIB, is obliged to pay the costs arising under the guarantee to a Libyan entity be considered to be a person or entity within the meaning of Article 17(1)(c) of that regulation — that is, a person or entity acting through or on behalf of or for the benefit of one of the persons, entities or bodies referred to in point (a) or (b) of Article 17(1)? Should the costs arising under the guarantee claimed by that bank from another bank established in the European Union be considered to constitute, directly or indirectly, claims under a guarantee?

(26)UF, SH, TG, the Italian, German and Hungarian Governments and the Commission have submitted written observations to the Court pursuant to Article 23 of the Statute of the Court of Justice of the European Union and presented oral argument, with the exception of the Italian Government, at the hearing held on 23 April 2018.

III. Analysis

(27)It is apparent from the request for a preliminary ruling that the Kúria (Supreme Court) has no reasonable doubt that the triggering of the counter-guarantees in favour of HIB — a triggering that never took place and is no longer possible since the counter-guarantees have now expired — was prohibited under Regulation No 204/2011, at least in the period during which HIB was on the list. Such a question has not therefore been put to the Court.

The Kúria (Supreme Court) has, however, asked the Court how, for the purposes of applying the embargo measures adopted by the European Union against Libya, the following should be treated:

–payments due by a bank established in the European Union to a Libyan bank included on the list in Annex III to Regulation No 204/2011, in respect of the deferred costs of the provision of a guarantee for the benefit of a body that is also included on that list;

–payments due from a bank established in the European Union to a Libyan bank not included on the list in Annexes II and III to Regulation No 204/2011, in respect of the deferred costs of the provision of a guarantee for the benefit of a body that is included on those lists;

–payments due by a bank established in the European Union to another bank established in the European Union in respect of the deferred costs of the provision of a counter-guarantee for the benefit of a Libyan bank not included on the lists in Annexes II and III to Regulation No 204/2011 for the issue of a guarantee for the benefit of a body that is included on those lists after that guarantee has been issued.

(29)For each of these categories of payments the Court will be required to determine whether they fall within the scope of the prohibitions laid down by Regulation No 204/2011 or Regulation 2016/44.

(30)It will, however, be for the national court (the Kúria (Supreme Court) or the competent court) to determine whether, on the basis of the counter-guarantee agreements concluded between SH and TG, the deposit agreement and the law applicable to those agreements, TG is entitled to obtain from SH the payment of the costs arising under the counter-guarantees issued on the instructions of the latter (or any other form of damages or compensation for unjustified enrichment) relating to the period in which HIB was included on the list in Annex III to Regulation No 204/2011, despite the fact that the latter’s name was not removed from that list until after the TG APG counter-guarantee had expired and despite the fact that the adoption of restrictive measures altered TG’s risk of exposure to enforcement.

(31)By point 1.1 of its first question, which it is appropriate to consider together with the second question referred in so far as it relates to that point 1.1, the referring court asks, in essence, whether, in circumstances such as those of the main proceedings, the costs (17) that TG was obliged to pay to Sahara Bank for the provision of the APG and PG guarantees for the benefit of HIB, during the period in which Sahara Bank was included on the list, fall within the scope of Regulation No 204/2011 or Regulation 2016/44 and were prohibited under the relevant provisions of those regulations.

(32)First of all, it should be noted that, since these are payments which were to be made when Regulation No 204/2011 was in force and since the referring court has asked in essence, whether those payments fell within the scope of EU embargo measures against Libya at the time they were due, Regulation No 204/2011 is the only regulation that is relevant for the purposes of answering the question referred by that court.

(33)In those circumstances, the payments in question may fall within the scope of that regulation if they are covered by one of the two situations envisaged by Article 5(2) thereof, namely if they constitute the ‘provision’, directly or indirectly, of funds or economic resources to persons, entities or bodies listed in Annexes II and III to that regulation or the ‘use’ of funds or economic resources for the benefit of such persons, entities or bodies.

(34)There is no doubt that payments of sums of money that a bank established in the European Union is required to make in respect of an entity included in those annexes in connection with the costs of providing a guarantee constitute, if made, a ‘direct provision of funds’ within the meaning of Article 5(2) of Regulation No 204/2011 and therefore fall within its scope. The fact that those payments are part of a transaction in which there is an economic balance between the consideration given and the consideration received and constitute acts implementing agreements concluded before the entry into force of Regulation No 204/2011 does not, of itself, as explained by the Court in a similar context, exclude them from the scope of that regulation or the prohibitions laid down therein. (18)

(35)At most, the question that arises is whether those payments could be made by depositing funds into a frozen Sahara Bank account, pursuant to Article 9(1)(b) of Regulation No 204/2011, according to which Article 5(2) of that regulation does not apply to payments due under contracts concluded before the beneficiary was included on the lists in Annexes II and III to that regulation, provided that such payments are also frozen. As regards the relevance of such a question for the purposes of resolving the dispute in the main proceedings, I refer to the answer to the fifth question referred, which concerns the interpretation of Article 9 of Regulation No 204/2011.

36.By point 1.2 of its first question, which it is appropriate to consider together with the second question referred in so far as it relates to point 1.2, the referring court asks, in essence, whether, in circumstances such as those of the main proceedings, the costs that TG was obliged to pay Sahara Bank for the provision of the APG and PG guarantees in favour of HIB, in the period following the removal of Sahara Bank from the list in Annex III to Regulation No 204/2011, fell within the scope of that regulation or of Regulation 2016/44 and were prohibited. For the same reasons as those set out in point 32 of this Opinion, only Regulation No 204/2011 is relevant for the purposes of the answer to be given to that question.

37.Payments of sums of money which a bank established in the European Union is required to make in respect of a legal person governed by Libyan law which is not listed in Annexes II and III to Regulation No 204/2011, unlike the situation envisaged in point 1.1 of the first question, do not, when made, constitute ‘funds made available directly’ within the meaning of Article 5(2) of Regulation No 204/2011.

38.As regards ‘funds being made available indirectly’ within the meaning of that provision, this could occur where sums of money which are the subject of such payments are passed on to a natural person, entity or body included on those lists or where there is a legal or financial link (for example, a link of ownership or control) between one of those persons and the legal person governed by Libyan law receiving the payment, in such a way as to enable that person to acquire the power to dispose of the sums in question.

39.However, I would tend to rule out the possibility that this is the position in the circumstances of the main proceedings. Indeed, on the one hand, the amounts which are the subject of the payments in question in those proceedings, as they are intended to cover the costs incurred by a bank in providing a guarantee and represent the consideration for the services rendered by the bank, are, in principle, intended to remain in the coffers of that bank. Moreover, although it is for the national court to definitively rule out such a position, it is not apparent from the order for reference that the sums paid by TG to Sahara Bank to cover the costs of setting up the APG and PG guarantees in favour of HIB have in any way become available to HIB.

40.On the other hand, it is not apparent from the order for reference that a link such as that described in point 38 above exists between Sahara Bank and HIB. However, it is also for the national court to determine whether that is indeed the situation in the present case.

41.If a direct or indirect making available of funds is ruled out, it is necessary to examine whether the payments in question constitute a ‘use’ of funds for the benefit of a person listed in Annexes II and III to Regulation No 204/2011 within the meaning of Article 5(2) of that regulation, in so far as they are intended to cover, the deferred costs of the provision of a guarantee in favour of an entity which, during the lifetime of the guarantee agreement, has been entered on those lists.

42.This would, in my view, be the case if it were to become clear, on the basis of the agreements reached, prior to the entry into force of the embargo, between the bank established in the European Union in its capacity as originator and the Libyan bank which issued the guarantee, and on the basis of any amendments to those agreements made after the entry into force of the embargo, that those payments affect, directly or indirectly, the possibility for the beneficiary of obtaining enforcement of the guarantee from the Libyan bank, or will have the effect that the bank established in the European Union is liable for the costs which, contractually, would be incumbent on the beneficiary.

43.Thus, for example, where the right to enforce the guarantee depends in whole or in part on the payment of the sums agreed as consideration for its issue, or where the two banks have agreed, while the embargo was in force, to extend the guarantee, the payments which the bank established in the European Union is required to make to the Libyan bank to cover the costs associated with the issue of the guarantee or its extension would fall under the prohibition laid down in Article 5(2) of Regulation No 204/2011. The sums to which those payments relate are intended to ensure that an entity included on the lists in Annexes II and III to that regulation has the right to call on the security or to maintain its validity for the benefit of such an entity beyond the period initially agreed and are therefore used for its benefit.

44.In light of the above, where the conditions set out in points 38 and 42 of this Opinion are not satisfied, the payments which a bank established in the European Union is required to make to a Libyan bank not listed in Annexes II and III to Regulation No 204/2011 in order to cover, on a deferred basis, the costs of issuing a guarantee in favour of an entity which, during the term of the guarantee agreement, is entered on those lists, do not tally with any of the situations envisaged by Article 5(2) of Regulation No 204/2011 and, unless they form part of activities aimed at circumventing the prohibitions laid down by that provision, within the meaning of Article 5(3) of that regulation, are not prohibited under that regulation.

45.In particular, I do not consider that the mere fact that the chain of linked agreements concluded between the various entities involved prior to the entry into force of the embargo, as well as the transaction as a whole, has the ultimate aim of enabling an entity listed in Annex III to Regulation No 204/2011 to access a bank guarantee is in itself sufficient to consider any payment made in the context of such a transaction prohibited under Article 5(2) of that regulation.

46.In any event, it is for the national court to carry out, on the basis of the agreements reached between TG and Sahara Bank and in the light of the type of guarantee provided by the latter to HIB, the checks necessary to definitively rule out the application of Article 5 of Regulation No 204/2011 to the payments in question.

48.By paragraph 1.4 of its first question, the Kúria (Supreme Court) asks, in essence, whether, in circumstances such as those of the main proceedings, the payments relating to the costs which SH undertook to pay to TG for the provision of counter-guarantees in favour of Sahara Bank — which are intended to enable Sahara Bank to issue the APG and PG guarantees in favour of HIB — fall within the scope of Regulation No 204/2011 or Regulation 2016/44 and are prohibited under the relevant provisions of those regulations. Here again, only Regulation No 204/2011, which was in force when those payments were contractually due, is to be taken into account for the purposes of the answer to be given.

49.In view of the functional link which, despite the fact that they are autonomous, exists between the counter-guarantees given by TG to Sahara Bank, on the instructions of SH, and the guarantees given by Sahara Bank to HIB, the considerations set out in points 38 to 46 above are also applicable, mutatis mutandis, to the payments under consideration in this part of the reference for a preliminary ruling, irrespective of whether those payments are made between banks that are both established in the European Union. I shall therefore confine myself here to referring to those considerations.

The purpose of that clause, which is included in most of the European Union’s legal instruments imposing restrictive measures, is to prevent those affected by the restrictive measures, the Libyan Government or its constituent bodies and, in general, Libyan persons, entities or bodies, from being able to obtain compensation for the adverse effects of the embargo, and to protect economic operators from claims which may be made against them by Libyan counterparts on the basis of contracts the performance of which has been affected by those measures or in relation to them.

51.Given its different purpose, the no claims clause in Article 12 of Regulation No 204/2011 does not overlap with the prohibitions set out in Article 5(2) of that regulation, but has its own distinct sphere of application. Thus, with the exception of the case of claims made by persons included on the lists in Annexes II and III to Regulation No 204/2011, referred to in Article 12(a) of that regulation, the satisfaction of claims falling within the scope of that article does not in principle constitute the making available or use of funds or economic resources prohibited by Article 5(2) of that regulation. Any other interpretation would deprive that article of any practical effect.

52.In accordance with its function, that clause is also likely to have effect not only as long as the restrictive measures remain in force but also after they have been lifted. If the clause remains in force, it will continue to apply even after the embargo measures have been lifted, making claims for compensation for temporary or permanent breaches of contract caused by the entry into force of those measures unenforceable.

53.The no claims clause is therefore intended to clarify the effects of embargo measures on contracts concluded before the adoption of such measures, by discharging, within the limits of its scope, a debtor for whom it has become wholly or partly, temporarily or permanently impossible to provide a service, of liability, which is linked, in civil law, to cases of force majeure arising as a result of the occurrence of a ‘factum principis’. If the fact that an embargo is temporary results, in principle, only in ‘paralysis’ and not in the termination of contracts concluded before its entry into force — with the result that services which the provider remains under an obligation to provide in the meantime and the provision of which has not become definitively impossible must be capable of being provided after the lifting of the restrictive measures — the existence of a no claims clause makes claims for compensation for non-performance of contracts or transactions affected by those measures even after the lifting of the suspensory effect of the embargo, unenforceable, resulting in the termination of existing relations.

54.Guarantees and counter-guarantees provided in connection with a contract, for example a procurement or supply contract, the performance of which has been affected by the restrictive measures adopted by Regulation No 204/2011 are expressly mentioned in Article 12 of that Regulation, and now in Article 17 of Regulation No 2016/44, as sources of ‘claims’ which may not be satisfied under that provision. Thus, regardless of whether they are independent of the basic underlying contract, the enforcement of such guarantees (or counter-guarantees) by persons listed in points (a) to (c) of Article 12 of Regulation No 204/2011, and now Article 17 of Regulation 2016/44, is prohibited under those articles if it appears that the performance of the underlying contract has been affected by the measures adopted by that regulation.

55.Irrespective of their link with the underlying contract, guarantees and counter-guarantees are also, in themselves, contracts which may be affected, pursuant to Article 12 of Regulation No 204/2011, by the restrictive measures adopted by that regulation.

56.The entry into force of the embargo blocks, for its duration, the ability of the beneficiaries affected by such measures (or the persons otherwise included in the categories listed in Article 12 of Regulation No 204/2011) to enforce the guarantee or counter-guarantee, and thus prevents the guarantor (or counter-guarantor) from providing the agreed service. Moreover, the extension of guarantees and counter-guarantees is expressly prohibited by that provision and, if allowed, would, as has been seen, constitute a breach of the prohibition laid down in Article 5(2) of Regulation No 204/2011. As the guarantor (or the counter-guarantor) is unable to provide the agreed service due to force majeure, it is therefore exempted from liability for its non-performance for as long as the restrictive measures and the no claims clause remain in force. If the guarantee or counter-guarantee expires before the end of the embargo, they will be permanently released from their obligations. On the other hand, even if it is accepted that the adoption of embargo measures has a merely suspensory effect on contracts that are still in force, the continued validity of the autonomous guarantees given for a fixed period of time that goes beyond the expiry of the initially agreed period must in any event be ruled out.

57.Although not expressly envisaged in Article 12 of Regulation No 204/2011, commission and other charges linked to the issuing of a bank guarantee or counter-guarantee may fall within the scope of that article where the enforcement of the relevant guarantee or counter-guarantee agreement is obstructed by the measures introduced by that regulation and the demand for payment of such commission and charges by persons belonging to the categories listed in that provision may therefore constitute a claim made ‘in relation to agreements the performance of which has been affected’ by those measures.

58.It is for the national court to assess in concreto whether and to what extent the no claims clause provided for in Regulation No 204/2011 and Regulation 2016/44 is applicable to the claims brought by TG against SH. That assessment must, in my view, be carried out in accordance with the following criteria.

59.In the first place, for the purpose of determining which version of the clause is applicable ratione temporis to the payments in question in the main proceedings, a distinction must be made between the sums paid by TG to Sahara Bank — TG claiming reimbursement from SH — and the sums owed by the latter to TG, essentially as commission for the issue of the APG and PG counter-guarantees. Within the first category, a further distinction should be made between the payments made during the period from the entry into force of Regulation No 204/2011 until the entry into force of Regulation No 45/2014 (22 January 2014) and those made from that date until the expiry of the guarantees provided by Sahara Bank. For the former, the original version of Article 12 of Regulation No 204/2011 is applicable, and for the latter, the version amended by Regulation No 45/2014 is applicable. However, I do not consider that Regulation 2016/44 applies to any of those payments. It is the law applicable at the time when the payments were made which is relevant for the purposes of determining whether or not such payments were prohibited under the no claims clause, and not the time when reimbursement of the relevant sums is sought in legal proceedings. As regards the commission payable by SH to TG but not paid, the relevant date is that at which their payment is requested, and the applicable regulation is therefore Regulation 2016/44, Article 17 of which has the same content as Article 12 of Regulation No 204/2011.

60.In the second place, there is no doubt that Sahara Bank falls within the category of persons identified in Article 12(b) of Regulation No 204/2011, as amended by Regulation No 45/2004, and thus that payments made to it by TG from the time of the entry into force of that amendment are likely to fall within the scope of the prohibition laid down in that article if the other conditions imposed therein are met. However, the same cannot be said, as observed by the Commission in its written comments, with regard to the version of that article that preceded the amendment. In this regard, it is for the national court to carry out the necessary checks to ascertain whether, in the circumstances of the dispute in the main proceedings, Sahara Bank, in its capacity as beneficiary of the obligation to pay the costs connected with the provision of the guarantee in favour of HIB on the basis of the agreement concluded with TG, may be regarded as ‘a person or entity claiming rights through or for the benefit of [the Libyan Government]’. Conversely, the payments made by TG to Sahara Bank in the period prior to the entry into force of Regulation No 45/2004 cannot be considered to have been made in breach of the prohibition laid down in Article 12 of Regulation No 204/2011. The possibility of considering that, in the circumstances of the main proceedings, TG falls within the definition set out in that article in its original version, or belongs to the category of persons envisaged in paragraph 1(c) of that article, as amended by Regulation No 45/2014, or in Article 17 of Regulation 2016/44, seems to me to be ruled out from the outset. Indeed, on the one hand, as correctly stated by the German Government, the mere fact that a bank established in the European Union is connected by a guarantee agreement with a Libyan bank does not in itself mean that it can be regarded as acting on behalf of that bank when it requests a third bank established in the European Union, with which it is connected by a counter-guarantee agreement, to reimburse the costs arising under the guarantee paid to the Libyan bank. On the other hand, once the argument that any claim made in connection with the series of guarantee and counter-guarantee agreements at issue in the main proceedings must be regarded as ‘vitiated’ by the fact that it contributes to the ultimate objective of providing a guarantee for the benefit of a person included on the lists in Annexes II and III to Regulation No 204/2011 is rejected, as I did in point 44 above, TG’s request for payment of the commission under the counter-guarantee agreement concluded with SH can only be regarded as a request by an EU operator, acting in its own exclusive interest, to obtain consideration for the services provided to another EU operator.

61.Lastly, the national court must determine to what extent the restrictive measures imposed by Regulation No 204/2011 have affected the guarantee and counter-guarantee agreements at issue in the main proceedings, in order to assess whether the claims put forward by TG in the main proceedings which may prove to fall within the scope of that clause, on the basis of the considerations set out in the preceding paragraph, are subject to the prohibition laid down therein. In this regard, I would merely point out that, in carrying out such an assessment, it is certainly possible that the national court might conclude that the measures introduced by Regulation No 204/2011 were not likely to affect the enforcement of the Sahara Bank guarantee in favour of HIB, the issue of which was a precondition for the payments made by TG to the Libyan bank — and, as a result of the link with the counter-guarantee agreements concluded between TG and SH, the sums SH was required to pay to TG by way of reimbursement. However, this would not allow that court to automatically.

exclude the claims made by TG from the scope of the no claims clause, as the restrictive measures imposed by Regulation No 204/2011 undoubtedly influenced the series of interdependent agreements of which the agreement concluded between TG and Sahara Bank formed a part and thus the guarantee ‘transaction’ as a whole. In this regard, I note that the aforementioned Article 12 expressly refers not only to ‘contracts’ affected by the measures adopted by Regulation No 204/2011, but also to any ‘transaction’ affected by those measures.

Fifth question referred: possible application of Article 9 of Regulation No 204/2011

62.By its fifth question, the referring court asks the Court, in essence, whether some or all of the payments at issue in the main proceedings fall within the scope of the derogation from Article 5(2) of Regulation No 204/2011 provided for under Article 9 of that regulation.

63.In this respect, I would point out first of all that, in accordance with paragraph 1 of that Article, that derogation — which, as the Commission was correct to point out in its comments, does not, in any event, allow payments to be authorised which are to be regarded as being in breach of the no claims clause — concerns payments intended to be made into accounts which are subject to the freezing measures imposed under Article 5(1) of Regulation No 204/2011, that is to say accounts belonging to persons, entities or bodies on the lists in Annexes II and III to that regulation. Therefore, with regard to the proceedings before the national court, only payments made or to be made to HIB or Sahara Bank during the period when those entities were listed in Annex III to Regulation No 204/2011, would be liable to fall within the scope of Article 9(1) of that regulation. However, the main proceedings do not concern payments to HIB. Moreover, it would appear not to be disputed by the parties that TG did not make any payment to Sahara Bank during the period when the latter was on the list. It follows that the claims made by TG in the main proceedings do not concern sums connected with payments which could, potentially, have fallen within the scope of Article 9 of Regulation No 204/2011.

Conclusion

64.In the light of all the foregoing, I suggest that the Court reply as follows to the questions referred for a preliminary ruling by the Kùria (Supreme Court, Hungary):

(1)Article 5(2) of Council Regulation (EU) No 204/2011 of 2 March 2011 concerning restrictive measures in view of the situation in Libya must be interpreted as meaning that:

–the payment by a bank established in the European Union to a Libyan bank listed in Annex III to that regulation of the costs of providing a guarantee to an entity also included on that list constitutes a prohibited making available of funds;

–the payment by a bank established in the European Union to a Libyan bank not listed in Annexes II and III to Regulation No 204/2011 of the costs of providing a guarantee to an entity included on one of those lists does not constitute a prohibited making available or use of funds, provided that:

–the sums of money which are the subject of such payments are not remitted to a natural person, entity or body included on those lists;

–there is no legal or financial link between any of those persons and the legal person governed by Libyan law receiving the payment such as to enable that person to obtain the power to dispose of the sums in question;

–those payments do not affect, directly or indirectly, the capacity of the Libyan beneficiary entity to obtain enforcement of the guarantee from the Libyan bank, and do not constitute acceptance by the bank established in the European Union of responsibility for costs which are, under the contract, payable by that entity;

–under the same conditions, the payment by one bank established in the European Union to another bank established in the European Union of the costs of providing a counter-guarantee in favour of a Libyan bank not listed in Annexes II and III to Regulation No 204/2011 for the issue of a guarantee to an entity included on those lists after the issue of that guarantee does not constitute a prohibited making available or use of funds;

(2)Article 12 of Regulation No 204/2011, both in the version prior to the amendment made by Regulation No 45/2014 and in the version resulting from the amendment, must be interpreted as meaning that a claim for payment of the costs relating to the issue of a guarantee or a counter-guarantee is not excluded from the prohibition on satisfying claims laid down by that article where such a claim is made by one of the persons referred to in that article and where the measures imposed pursuant to Regulation No 204/2011 have affected, directly or indirectly, in whole or in part, the enforcement of the guarantee or counter-guarantee agreement or the transaction of which that agreement forms part.

(3)Article 12(1) of Regulation No 204/2011, in the version resulting from the amendment made by Regulation No 45/2014, must be interpreted as meaning that a bank established in the European Union which is required, by virtue of a counter-guarantee agreement forming part of a series of related contracts for the provision of a guarantee in favour of a Libyan entity, to pay to a Libyan bank the costs of issuing the guarantee, does not fall within the category of persons mentioned in point (c) of that provision in the absence of evidence pointing to the conclusion that it is acting in the name of or on behalf of the Libyan bank.

(4)Article 9 of Regulation No 204/2011 must be interpreted as not applying to payments, such as those at issue in the main proceedings, made or to be made to persons not affected by the restrictive measures imposed by that regulation.

* * *

(1) Original language: Italian.

(2) OJ 2011 L 58, p. 1.

(3) Council Regulation (EU) 2016/44 of 18 January 2016 concerning restrictive measures in view of the situation in Libya and repealing Regulation (EU) No 204/2011 (OJ 2016 L 12, p. 1).

(4) Council Decision 2011/137/CFSP of 28 February 2011 concerning restrictive measures in view of the situation in Libya (OJ 2011 L 58, p. 53). That decision was repealed by the consolidated Decision (CFSP) 2015/1333 adopted by the Council on 31 July 2015 (OJ 2015 L 206, p. 34).

(5) Adopted on 26 February 2011.

(6) See recital 1 of Regulation No 204/2011.

(7) It is specified in Article 6(1) and (2) of Regulation No 204/2011 that ‘1. Annex II shall include the natural or legal persons, entities and bodies designated by the United Nations Security Council or by the Sanctions Committee in accordance with paragraph 22 of UNSCR 1970 (2011). 2. Annex III shall consist of natural or legal persons, entities and bodies not covered by Annex II who, in accordance with Article 6(1) of Decision 2011/137/CFSP, have been identified by the Council as being persons and entities involved in or complicit in ordering, controlling, or otherwise directing, the commission of serious human rights abuses against persons in Libya, including by being involved in or complicit in planning, commanding, ordering or conducting attacks, in violation of international law, including aerial bombardments, on civilian populations and facilities, or individuals or entities acting on their behalf or at their direction, or entities owned or controlled by them.’

(8) In accordance with Article 1(a)(iv), (v) and (vi) of Regulation No 204/2011, for the purpose of that regulation, ‘funds’ means ‘(iv) interest, dividends or other income on or value accruing from or generated by assets; (v) credit, right of set-off, guarantees, performance bonds or other financial commitments; (vi) letters of credit, bills of lading, bills of sale’.

(9) Council Regulation (EU) No 488/2013 of 27 May 2013, amending Regulation (EU) No 204/2011 concerning restrictive measures in view of the situation in Libya (OJ 2013 L 141, p. 1).