Certain Underwriters At Lloyds London & Ors, R (On the Application Of) v HM Treasury

In construing an EU sanctions regulation, the court must read the provisions purposively and as a coherent whole. The purposes of a sanctions regime may include both restrictive measures and the derogations that moderate their effects and ensure proportionality.

Information supplied under article 29 to facilitate compliance with the regulation may therefore be used to facilitate an application under article 18 for release of frozen funds to satisfy a judgment. Article 29(2) does not require an artificially narrow interpretation confined to enforcement of the asset freeze, particularly where disclosure is confidential and not intended for the public domain.

The claimants were reinsurers with a United States judgment against Syria and associated individuals arising from the destruction of EgyptAir Flight 648. The judgment had been recognised and made enforceable in England.

Syrian assets were frozen under Consolidated Regulation (EU) No 36/2012. The claimants sought information from HM Treasury about the location of frozen funds so that they could seek authorisation under article 18 to release funds in satisfaction of the judgment. HM Treasury refused, relying on article 29(2).

The central issue was whether disclosure for that limited and confidential purpose would facilitate compliance with the Regulation.

1. Claim allowed. HM Treasury’s contrary decision was quashed and the issue was remitted to HM Treasury for reconsideration.
2. The Regulation required a broad purposive interpretation, reading its provisions in context and as a coherent whole. The sanctions imposed by the Regulation were balanced by derogations designed to moderate their effects and secure a proportionate and lawful regime. Those derogations formed part of the Regulation’s purposes, rather than standing wholly outside them.
3. Article 18 permitted the competent authority to authorise release of frozen funds to satisfy a judgment, subject to the stated conditions. Releasing funds pursuant to that power was compliance with the Regulation.
4. Article 29(1)(a) required information that would facilitate compliance with the Regulation to be supplied to the competent authority. Article 29(2) restricted subsequent use to the purposes for which the information was provided or received. Those purposes included facilitating an article 18 authorisation request, because identifying funds eligible for release could make compliance with article 18 possible or easier.
5. The court rejected HM Treasury’s submission that the relevant purposes were confined to applying the restrictive measures. The confidential disclosure sought was materially different from placing information in the public domain. The reasoning in RAID by its Executive Director Patricia Feeney v The Information Commissioner and HM Treasury EA/2015/0019, concerning disclosure under freedom of information legislation, did not require the same conclusion.
6. The sensitive nature of the information and the privacy and data-protection interests of listed persons did not justify an artificially narrow construction. Those interests were protected through the Regulation’s proportionate structure and its derogations. The interests of judgment creditors and other persons suffering hardship were also relevant.

This was a first-instance judicial review in the Administrative Court. The judgment records that the claimants had previously obtained a United States judgment and an order of the High Court recognising it as enforceable in England. The present court quashed HM Treasury’s decision and remitted the issue for reconsideration.