First plea, alleging breach of the obligation to state reasons
67
KNIC submits that the Council and the Commission failed to fulfil their obligation to state clear, unequivocal and specific reasons for the entry of KNIC’s name on the lists at issue. It disputes, generally, all the reasons stated in support of its listing. In particular, KNIC claims that its listing was based on two factors which are not among the listing criteria, namely the alleged control by the North Korean State and the connection with Office 39 of the Korean Workers’ Party (‘Office 39’).
68
The Council and the Commission dispute KNIC’s arguments.
69
According to a consistent body of case-law, the purpose of the obligation to state the reasons on which an act adversely affecting an individual is based, which is a corollary of the principle of respect for the rights of the defence, is, first, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the Courts of the European Union and, second, to enable those Courts to review the legality of that act (see judgment of
15 November 2012,
Council v Bamba
, C‑417/11 P, EU:C:2012:718, paragraph 49
and the case-law cited; judgments of
18 February 2016,
Council v Bank Mellat
, C‑176/13 P, EU:C:2016:96, paragraph 74
, and of
8 September 2016,
Iranian Offshore Engineering & Construction v Council
, C‑459/15 P, not published, EU:C:2016:646, paragraph 23
).
70
As regards restrictive measures, without going so far as to require a detailed response to the comments made by the person concerned, the obligation to state reasons laid down in Article 296 TFEU entails in all circumstances that that statement of reasons identifies not only the legal basis of that measure but also the individual, specific and concrete reasons why the competent authorities consider that the person concerned must be subject to restrictive measures. The Courts of the European Union must, therefore, in particular determine whether the reasons relied on are sufficiently detailed and specific (see judgment of
18 February 2016,
Council v Bank Mellat
, C‑176/13 P, EU:C:2016:96, paragraph 76
and the case-law cited; see also, to that effect, judgment of
5 May 2015,
Petropars Iran and Others v Council
, T‑433/13, EU:T:2015:255, paragraph 35
and the case-law cited).
71
The statement of reasons required by Article 296 TFEU must be appropriate to the act at issue and the context in which it was adopted. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment of
15 November 2012,
Council v Bamba
, C‑417/11 P, EU:C:2012:718, paragraph 53
and the case-law cited).
72
It should also be borne in mind that the reasons given for a measure adversely affecting a person are sufficient if that measure was adopted in a context which was known to that person and which enables him to understand the scope of the measure concerning him (see judgment of
18 February 2016,
Council v Bank Mellat
, C‑176/13 P, EU:C:2016:96, paragraph 75
and the case-law cited).
73
The obligation to state adequate reasons in a measure is an essential procedural requirement which must be distinguished from the question whether the reasoning is well founded, which is concerned with the substantive legality of the measure at issue. The reasoning in a measure consists in a formal statement of the grounds on which that measure is based. If those grounds are vitiated by errors, those errors will vitiate the substantive legality of the act, but not the statement of reasons in it, which may be adequate even though it sets out reasons which are incorrect (see judgment of
4 February 2014,
Syrian Lebanese Commercial Bank v Council
, T‑174/12 and T‑80/13, EU:T:2014:52, paragraph 86
and the case-law cited).
74
In the present case, KNIC contends that the reasons for the second set of contested measures and Decision 2016/849 are not stated to the requisite legal standard so far as concerns the inclusion of its name, since the reasoning at issue is vague and unfounded.
75
In that regard it must be noted that recitals 1 to 12 of Decision 2013/183 set out the relevant factors of the political context within which the restrictive measures at issue were adopted. Furthermore, it is apparent from the first recital of Regulation No 329/2007 that, as a result of the nuclear test conducted on 9 October 2006, the UNSC found that there was a clear threat to international peace and security. Those acts, which the second set of contested measures seeks to amend and which therefore form part of a context that was known to KNIC, thus describe the overall situation that led to their adoption and the general objectives they are intended to achieve. Similarly, as regards the overall situation that led to the adoption of Decision 2016/849, recital 6 of that decision notes in particular that the actions of the Democratic People’s Republic of Korea earlier in 2016 are considered to be a grave threat to international peace and security in the region and beyond.
76
In addition, it must be noted that the grounds for including the name of KNIC on the lists in question must be read in conjunction with, and in the light of, the listing criteria set out in Article 15(1)(b)(ii) of Decision 2013/183, Article 6(2)(b) of Regulation No 329/2007 and Article 27(1)(b) of Decision 2016/849. Thus, it is clear from those provisions that all funds and economic resources belonging to the persons and entities listed in Annex II to Decision 2013/183, at point D of Annex V to Regulation No 329/2007 and in Annex II to Decision 2016/849 are to be frozen. KNIC was listed at point II B of Annex II to Decision 2013/183, as amended by Decision 2016/475, at point D of Annex V to Regulation No 329/2007, in the version amended by Regulation 2016/659, and at point II B of Annex II to Decision 2016/849.
77
Furthermore, it must be noted that the headings of the annexes concerned clearly refer to those provisions in which the criteria constituting the legal basis of the inclusion of KNIC’s name on the lists at issue are set out unambiguously.
78
The grounds relied on in support of the inclusion of KNIC’s name on the lists at issue are those set out in paragraph 19 above. It is clear from this that KNIC was listed on the ground that it was a State-owned and controlled company generating substantial foreign exchange revenue which could contribute to the nuclear-related, ballistic missile-related or other weapons of mass destruction-related programmes (‘nuclear proliferation’) of the Democratic People’s Republic of Korea. It is also evident from this that the headquarters of KNIC, in Pyongyang, is linked to Office 39, a designated entity.
79
Thus, notwithstanding the concise nature of that statement of reasons, KNIC was clearly in a position to understand the key facts used against it by the Council and the Commission and to defend itself adequately, as is confirmed by the line of argument it put forward in connection with the second plea. The Council and the Commission detailed the specific and concrete reasons for their view that the listing criteria did apply to KNIC.
80
First, that statement of reasons is founded on a legal base that is clearly identified and refers to the listing criteria and, second, that statement of reasons includes grounds that relate directly to KNIC enabling it to understand the reasons that justified the inclusion of its name on the lists in question.
81
Likewise, the grounds relied on and articulated by the Council and the Commission enable the Court to review the legality of the acts disputed by KNIC.
82
As regards the argument of KNIC as to the inadequacy of the statement of reasons with respect to the supposed link between its headquarters and Office 39, first, it is apparent from the wording of the grounds relating to KNIC that the information concerning the link between KNIC and Office 39 is put forward on a supplementary basis. Second, the reference to the link between the headquarters of KNIC and Office 39 relates to the listing criteria mentioned in Article 15 of Decision 2013/183 and Article 6 of Regulation No 329/2007 as well as in Article 27(1)(b) of Decision 2016/849. Third, it was not necessary for the Council and the Commission to clarify in detail the nature of that link, since KNIC was able, on reading the grounds and taking into account the context that gave rise to its name being included on the lists in question, to understand the statement of reasons at issue. In accordance with the aforementioned case-law, it is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. The question whether that link has been established to the requisite legal standard will be considered in the analysis of the second plea in the present case.
83
In those circumstances, the first plea in law in the action in Case T‑264/16 must be rejected.
Second plea, alleging manifest error of assessment
84
By its second plea, KNIC maintains that the Council and the Commission erred in considering that the listing criteria were satisfied in KNIC’s case. In KNIC’s submission, its inclusion on the list of entities subject to sanctions has no factual basis. KNIC claims that the Council and the Commission failed to adduce sufficient evidence.
85
Thus, KNIC maintains that it does not provide financial services that could contribute to the weapons programmes of the Democratic People’s Republic of Korea as referred to in the listing criteria concerned. It states that it is an insurance company providing insurance to retail customers in North Korea. KNIC claims not to be State-controlled but to be an independent public undertaking. It claims not to generate substantial foreign exchange revenue.
86
Similarly, according to KNIC, the Council and the Commission have adduced no evidence to substantiate the assertion that its revenues have been or will be used in connection with nuclear proliferation programmes of the Democratic People’s Republic of Korea, or put forward any argument that would explain how sums ‘generated’ by KNIC could make a material contribution to those programmes. It states that the only money it transfers to the government is that corresponding to its ‘ordinary tax payment’, which would not in any event be sufficient to justify its designation.
87
In that context, according to KNIC, the reference to a ‘contribution’ to the weapons programmes to which the relevant listing criteria refer should be interpreted as requiring either a direct payment or payments of such significance that, without them, the weapons programme would be materially affected. KNIC refers, in that regard, to the judgments of
12 May 2016,
Bank of Industry and Mine v Council
(C‑358/15 P, not published, EU:C:2016:338
), and of
16 July 2014,
National Iranian Oil Company v Council
(T‑578/12, not published, EU:T:2014:678
).
88
In addition, KNIC takes issue with the Council for wrongly treating the present case as though it were one in which it would have been sufficient for it to establish that the entity referred to supports the Government of the Democratic People’s Republic of Korea in order to justify its designation. It refers to the judgment of
3 May 2016,
Iran Insurance v Council
(T‑63/14, not published, EU:T:2016:264
). KNIC denies, moreover, having any connection with Office 39.
89
Last, it challenges both the probative value and the veracity of the evidence submitted in relation to allegedly fraudulent activities, describing it as ‘false allegations’ and ‘malicious internet gossip’.
90
The Council and the Commission dispute KNIC’s arguments.
91
First of all, it should be borne in mind that fund-freezing measures taken against a person or an entity, on the basis of the provisions relating to the common foreign and security policy, constitute targeted preventive measures for countering threats to international peace and security. Adoption of such measures falls strictly within the framework of the legal conditions established by a decision adopted on the basis of Article 29 TEU and by a regulation founded on Article 215(2) TFEU implementing that decision within the scope of the FEU Treaty. By their precautionary nature and their preventive purpose, those measures can be distinguished in particular from criminal penalties (see judgment of
16 July 2014,
National Iranian Oil Company v Council
, T‑578/12, not published, EU:T:2014:678, paragraph 105
and the case-law cited).
92
In the present case, it should be borne in mind that, as is evident from the recitals of Decision 2013/183 and Decision 2016/849, the Council introduced restrictive measures against the Democratic People’s Republic of Korea in response to a number of nuclear tests carried out by that State, tests which were condemned by UNSC resolutions and were considered a serious threat to international peace and security in the region and beyond. Account must, moreover, be taken of the importance for the European Union of the objective of maintaining international peace and security.
93
With regard to the rigour of the judicial review, matters of two kinds must be distinguished within an act concerning restrictive measures such as those at issue in the present case. Such an act is composed, on the one hand, of the general rules defining the procedures for giving effect to the restrictive measures which it introduces and, on the other, of a body of measures applying those general rules to specific entities (see, by analogy, judgment of
9 July 2009,
Melli Bank v Council
, T‑246/08 and T‑332/08, EU:T:2009:266, paragraph 44
).
94
As regards the general rules defining the procedures for giving effect to the restrictive measures, the Council has a broad discretion as to what to take into consideration for the purpose of adopting economic and financial sanctions on the basis of Article 215 TFEU, consistent with a decision adopted on the basis of Chapter 2 of Title V of the EU Treaty, in particular Article 29 TEU. Because the Courts of the European Union may not substitute their assessment of the evidence, facts and circumstances justifying the adoption of such measures for that of the Council, the review carried out by those Courts must be restricted to checking that the rules governing procedure and the statement of reasons have been complied with, that the facts are materially accurate and that there has been no manifest error of assessment of the facts or misuse of power. That limited review applies, especially, to the assessment of the considerations of appropriateness on which such measures are based (see judgment of
30 November 2016,
Rotenberg v Council
, T‑720/14, EU:T:2016:689, paragraph 70
and the case-law cited).
95
However, although the Council thus has a broad discretion as regards the general criteria to be taken into consideration for the purpose of adopting restrictive measures, the effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires that, as part of the review of the lawfulness of the grounds which are the basis of the decision to include or to maintain a person’s name on the list of persons subject to restrictive measures, the Courts of the European Union are to ensure that that decision, which affects that person individually, is taken on a sufficiently solid factual basis. That entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, are substantiated by sufficiently specific and concrete evidence (judgments of
21 April 2015,
Anbouba v Council
, C‑605/13 P, EU:C:2015:248, paragraphs 41 and 45
; of
26 October 2016,
Portnov v Council
, T‑290/14, EU:T:2015:806, paragraph 38
; and of
30 November 2016,
Rotenberg v Council
, T‑720/14, EU:T:2016:689, paragraph 71
).
96
To that end, it is for the Courts of the European Union, in order to carry out that examination, to request the competent EU authority, when necessary, to produce information or evidence, confidential or not, relevant to such an examination (see judgment of
28 November 2013,
Council v Fulmen and Mahmoudian
, C‑280/12 P, EU:C:2013:775, paragraph 65
and the case-law cited).
97
It is the task of the competent EU authority to establish, in the event of challenge, that the reasons relied on against the person or entity concerned are well founded, and not the task of that person or entity to adduce evidence that those reasons are not well founded (see judgment of
28 November 2013,
Council v Fulmen and Mahmoudian
, C‑280/12 P, EU:C:2013:775, paragraph 66
and the case-law cited).
98
In addition, according to the case-law, in order to assess the nature, form and degree of the proof that the Council may be asked to provide, account must be taken of the specific nature and scope of the restrictive measures and of their purpose (judgment of
30 June 2016,
CW v Council
, T‑224/14, not published, EU:T:2016:375, paragraph 138
; see also, to that effect, judgment of
28 November 2013,
Council v Manufacturing Support & Procurement Kala Naft
, C‑348/12 P, EU:C:2013:776, paragraphs 74 to 85
, and Opinion of Advocate General Bot in
Anbouba v Council
, C‑605/13 P and C‑630/13 P, EU:C:2015:1, point 111
).
99
Last, it must also be noted that, in a situation where the Council defines abstractly the criteria which may justify the listing of a person, or entity, in the list of persons or entities subject to restrictive measures adopted on the basis of Articles 75 and 215 TFEU, it is the task of the Court to determine, on the basis of the pleas in law raised or, where necessary, raised of its own motion, whether the case in point corresponds to the abstract criteria defined by the Council (judgment of
18 September 2014,
Georgias and Others v Council and Commission
, T‑168/12, EU:T:2014:781, paragraph 74
).
100
It is necessary to check in the light of that case-law, first, the description used by the Council in the grounds relating to KNIC in the second set of contested measures and Decision 2016/849 and the relevance of those grounds in the light of the listing criteria and the amended listing criteria, and, second, the sufficiency of the evidence adduced by the Council in support of those grounds.
101
In so far as, by its second plea, KNIC seeks to challenge the description used by the Council in the grounds relating to KNIC in the light of the listing criteria and the amended listing criteria, the Court must find as follows.
102
As regards the argument by which KNIC disputes the relevance of a reason founded on State control in the light of the relevant listing criteria, it is sufficient to note that State control is not a separate ground for listing but one of the grounds relating to KNIC which concerns the listing criteria in question. It is clear that the listing criteria and the amended listing criteria cover all entities engaged in the transfer of funds or of financial assets that could contribute to nuclear proliferation activities, irrespective of their status as a State-owned undertaking or their capital structure. Consequently, in so far as the grounds relating to KNIC refer to the concept of a State-owned or controlled undertaking, they are consistent with the listing criteria.
103
As regards the argument by which KNIC contends that it does not provide financial services that could contribute to the weapons programmes of the Democratic People’s Republic of Korea such as those covered by the listing criteria in question, it is sufficient to note that the listing criteria and the amended listing criteria, which are expressed in very general terms, cover not only the entities which provide financial services but also those which provide the transfer to, through, or from the territory of Member States of any financial or other assets that could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
104
The term ‘financial services’ is not used in the grounds relating to KNIC, which mention the fact that KNIC was generating substantial foreign exchange revenue. That argument of KNIC cannot, therefore, be accepted.
105
In those circumstances, it must be held that the arguments as to the irrelevance of the grounds relating to KNIC in the light of the listing criteria in question cannot be accepted. KNIC’s challenge as regards the interpretation of the listing criteria, which it raises in the context of allegations based on the insufficiency of the evidence, will be analysed below in addressing those allegations.
106
In so far as, by its second plea, KNIC criticises the Council and the Commission for the insufficiency of the evidence, it must be noted that the grounds which the Council and the Commission are required to substantiate in the present case, in the light of the listing criteria, are those which concern, first, KNIC as a State-owned entity; second, the fact that KNIC generates substantial foreign exchange revenue; and, third, the fact that that revenue could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
107
In that regard, it is important to recall, as the Commission points out, that, in the absence of investigative powers in third countries, the assessment of the EU authorities must rely on publicly available sources of information, reports, articles in the press, intelligence reports or other similar sources of information.
108
According to the case-law, press articles may be used in order to corroborate the existence of certain facts if they are sufficiently specific, precise and consistent as regards the facts there described (see judgment of
25 January 2017,
Almaz-Antey Air and Space Defence v Council
, T‑255/15, not published, EU:T:2017:25, paragraph 147
and the case-law cited).
109
That is the case here, the Council and the Commission having produced a number of public documents and international press articles describing KNIC’s activities in detail.
110
In the first place, it is apparent from the documents submitted by the Council and the Commission that KNIC is a State-owned and controlled company.
111
As was stated by the Commission at the hearing, under Article 21 of the Constitution of the Democratic People’s Republic of Korea, post and telecommunications, and major factories, enterprises, banks and ports are the exclusive property of the State. According to the same provision, the State gives priority to the protection and growth of its property which plays a leading role in the development of the national economy.
112
In the present case, it is clear from the evidence submitted to the Court that KNIC has a monopoly in the insurance sector and that, therefore, it is a large undertaking.
113
According to the information that was submitted by the Commission and which appears on KNIC’s website, KNIC is the ‘sole insurer of [North Korea]’ and ‘has over 10 provincial insurance branches and over 200 insurance offices at municipal (district) and county levels under its umbrella nationwide and representative offices overseas’.
114
In addition, the information provided by KNIC, which is best placed to provide information challenging the evidence produced by the Council and the Commission, does not contradict the finding that it is a State-owned and controlled company; in fact it confirms it.
115
In that regard and as a preliminary point, it should be pointed out that, while the lawfulness of acts by which the EU institutions adopt restrictive measures may, in principle, be assessed only on the basis of the elements of fact and of law on the basis of which those acts were adopted, the fact remains that a piece of evidence that has been submitted as exculpatory evidence by the person subject to the restrictive measures can be taken into consideration by the Courts of the European Union for the purpose of confirming an assessment of the lawfulness of the contested acts that is based on the elements of fact and of law underpinning the adoption of those acts (see, by analogy, judgments of
3 May 2016,
Iran Insurance v Council
, T‑63/14, not published, EU:T:2016:264, paragraph 109
, and of
3 May 2016,
Post Bank Iran v Council
, T‑68/14, not published, EU:T:2016:263
).
116
Thus, in the present case, it is apparent from the document submitted to the Court entitled ‘Statute and Regulations of the Company’ that the company’s position on the insurance market in North Korea is that of a monopoly. According to the ‘Internal Management Explanatory Note’ also submitted by KNIC, ‘the profits of the Company shall be invested in other State companies and additionally in the reserve fund’. Those profits ‘may also be used for government cash-flow, as security for bonds, for the further development of the Company, and for the welfare of the whole of the people of [North Korea]’.
117
Similarly, according to that ‘Internal Management Explanatory Note’, KNIC is owned by the Democratic People’s Republic of Korea. Point A of that document states that ‘Korea Insurance shall report its activities to the government each year’, that ‘there shall be no shareholders’ general meeting as there are no shareholders’ and that ‘the Company is owned by the whole of the people of [North Korea]’. Likewise, at point E of that document, it is made clear that all the company’s books are to be audited by the government each year. Moreover, at the hearing, KNIC’s representatives were unable to answer a question put by the Court as to who appoints the members of the executive board of KNIC.
118
It follows from the foregoing that the Council did not make an error of fact in stating that KNIC was ‘a State-owned and controlled company’.
119
In the second place, KNIC maintains that the Council and the Commission also erred in asserting that it ‘is generating substantial foreign exchange revenue’. KNIC does not generate foreign currency. The only foreign exchange transactions with which KNIC is concerned are (i) receipts of small premiums in euros from embassies in the Democratic People’s Republic of Korea for their motor insurance and (ii) its reinsurance programme, in which it pays out more in euros by way of premium than it receives.
120
It appears from document Coreu CFSP/0229/15 of 11 November 2015 that, according to secret information which the Council considers reliable, KNIC is tasked with obtaining foreign currency in order to support and stabilise the ruling regime of the Democratic People’s Republic of Korea. It is also evident from that document that the amounts involved are substantial.
121
In that regard, it must be pointed out that KNIC does not dispute its overall profitability. It does, however, take issue with the suggestion that part of those profits are generated in foreign currency by its reinsurance activities.
122
First, it must be borne in mind that a regulation providing for restrictive measures must be interpreted in the light not only of the decision adopted in the framework of the common foreign and security policy referred to in Article 215(2) TFEU, but also of the historical context in which the provisions were adopted by the European Union, that regulation being one such provision (see, to that effect, judgment of
28 November 2013,
Council v Manufacturing Support & Procurement Kala Naft
, C‑348/12 P, EU:C:2013:776, paragraph 75
, and order of
1 December 2015,
Georgias and Others v Council and Commission
, C‑545/14 P, not published, EU:C:2015:791, paragraph 33
). The same applies to a decision adopted in the area of the common foreign and security policy, which must be interpreted taking into account the context in which it is adopted (judgments of
1 March 2016,
National Iranian Oil Company v Council
, C‑440/14 P, EU:C:2016:128, paragraph 78
, and of
12 May 2016,
Bank of Industry and Mine v Council
, C‑358/15 P, not published, EU:C:2016:338, paragraph 50
).
123
In the present case, it is apparent from recital 11 of Decision 2013/183 that UNSC Resolution 2094 (2013) decides that States are to prevent the provision of financial services or the transfer to, through or from their territories of any financial or other assets or resources, including bulk cash, in relation to activities that could contribute to the nuclear or ballistic missile programmes of the Democratic People’s Republic of Korea, or other activities prohibited by UNSC Resolutions 1718 (2006), 1874 (2009), 2087 (2013) or 2094 (2013), or to the evasion of measures imposed by those resolutions.
124
Likewise, it is apparent from recitals 14 and 15 of Decision 2016/849 that UNSC Resolution 2270 (2016) expands the scope of the measures applicable to the financial sector. In the context of the measures applicable to the financial sector, the Council considers that it is appropriate to prohibit transfers of funds to and from North Korea, unless specifically authorised in advance, as well as investment by the Democratic People’s Republic of Korea in the territories under the jurisdiction of Member States and investment by nationals or entities of the Member States in North Korea.
125
Having regard to the foregoing, the grounds relating to KNIC must also be read in the light of the listing criteria in question, which are formulated in very general terms and refer to the concepts of ‘any financial or other assets or resources’. Furthermore, the listing criteria in question are also based on the transfer to, through or from the territories of the Member States, and that should be taken into account in interpreting the expression ‘generating foreign exchange revenue’ which is used in the grounds for the listing of KNIC.
126
Consequently, the expression ‘generating foreign exchange revenue’ used in the grounds relating to KNIC must be interpreted in accordance with its wording and its purpose not as referring to the foreign exchange profits obtained by KNIC but as referring to any foreign exchange resource generated by the entity concerned as a result of its activities.
127
Second, with regard to the expression used in the grounds relating to KNIC according to which KNIC is generating substantial foreign exchange revenue, the Council and the Commission relied, in that respect, on publicly available sources concerning KNIC’s activities, such as its website, the excerpt from the commercial register relating to Korea National Insurance Corporation Zweigniederlassung Deutschland (‘KNIC ZD’), KNIC’s branch in Germany, and press articles. It was apparent from all of that information that KNIC operates on the territory of the European Union, in particular, by concluding contracts with large economic operators in the insurance sector, and that it is in the context of the latter activity that KNIC is generating foreign exchange revenue.
128
According to information taken from that website and submitted by the Commission, KNIC is active both in the field of life and non-life insurance and in the field of reinsurance, among other activities such as trade operations. It is apparent from that website that KNIC generates a substantial annual profit (11.5 billion North Korean won (around EUR 80.5 million) in 2014 alone).
129
As the Commission correctly noted, since money is fungible, even if, as KNIC argues, KNIC’s ‘reinsurance’ branch generates losses, it still provides KNIC with a source of foreign currency and, so far as the losses are concerned, these can easily be offset by profits in other areas of KNIC’s activity.
130
Third, the information provided by KNIC does not contradict the statement that it is generating foreign exchange revenue.
131
While asserting that the reinsurance programme costs it more in premiums than it receives in insurance claims, KNIC explains, putting forward a quantified analysis in support of its assertions, that, over the past five years, it has paid a total of EUR 441 060 102 in premiums to reinsurers and has made reinsurance recoveries totalling EUR 324 412 306.
132
In so doing, KNIC itself acknowledges having received foreign currency in excess of EUR 300 000 000. That must be regarded as a substantial sum.
133
Moreover, KNIC does not dispute information supplied by the Commission according to which KNIC’s reinsurance business involves international insurance companies, some of which are within the territory of the European Union. Furthermore, in the reply, KNIC confirms that it carries out foreign exchange transactions. It is also apparent from the letter from KNIC of 16 June 2016 that KNIC had to ‘convert some of its Korean won income into euros ... in order to pay premiums to its reinsurers’.
134
KNIC also emphasises that it was subject to legal proceedings in the United Kingdom in connection with allegations of false reinsurance claims. According to the Washington Post article submitted by the Council, those proceedings before the courts of the United Kingdom culminated in KNIC receiving USD 58 million.
135
KNIC is highly critical of the information concerning possible reinsurance fraud.
136
It is sufficient in that regard to note that the issue of fraud is outside the scope of the listing criteria and the amended listing criteria. Nor is the fraud issue among the grounds relating to KNIC. Accordingly, there is no need for the Court to rule on KNIC’s claims in relation to that issue.
137
Having regard to all of the foregoing, it must be concluded that the Council did not make any error of assessment in finding that KNIC generated substantial foreign exchange revenue.
138
In the third place, as regards KNIC’s contention that the revenue it generates could not contribute to nuclear proliferation-related programmes of the Democratic People’s Republic of Korea, there are two elements that must be distinguished in KNIC’s arguments.
139
First, KNIC claims that the expression ‘contribute to the programmes’ in the listing criteria in question must be interpreted as requiring either a direct payment or payments of such significance that, without them, the weapons programme would be materially affected.
140
In that regard, it should be noted that KNIC did not put forward a plea of illegality, as provided for in Article 277 TFEU, on account of the allegedly disproportionate nature of the listing criteria in question. By its arguments, however, KNIC criticises the Council’s and the Commission’s interpretation of the listing criteria in question.
141
It should be recalled, first of all, that the Council enjoys a broad discretion as regards the general and abstract definition of the legal criteria and procedures for adopting restrictive measures (see, to that effect, judgments of
28 November 2013,
Council v Manufacturing Support & Procurement Kala Naft
, C‑348/12 P, EU:C:2013:776, paragraph 120
, and of
29 April 2015,
Bank of Industry and Mine v Council
, T‑10/13, EU:T:2015:235, paragraphs 75 to 80, 83, 84 and 88
).
142
In the present case, neither the listing criteria nor the amended listing criteria require that direct payments or quantitatively significant payments be made to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
143
The terms used in the relevant provisions applicable in the present case are clearly those of economic resources and assets that ‘could contribute’ to those programmes.
144
Contrary to what is maintained by KNIC, the listing criteria in question do not cover all entities linked to the Democratic People’s Republic of Korea or all North Korean taxpayers but, in essence, persons and entities providing financial services or the transfer to, through or from the territory of Member States of any financial or other assets that could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
145
In the light of the actual purpose, nature and object of the restrictive measures in question, the criterion ‘could contribute’ as set out in the listing criteria and the amended listing criteria must be interpreted as relating to persons and entities whose activities could contribute to nuclear proliferation given their status in the regime in question, even if they do not, as such, have any direct or indirect link with nuclear proliferation.
146
As is apparent from paragraphs 130 to 137 above, in the context of its activities, KNIC generates substantial foreign exchange revenue and its overall profitability is in excess of EUR 80 million per year. Accordingly, it does not, in any event, fall within the category of ordinary taxpayers to which it refers.
147
Furthermore, the arguments of KNIC based on the judgments of
12 May 2016,
Bank of Industry and Mine v Council
(C‑358/15 P, not published, EU:C:2016:338
), and of
16 July 2014,
National Iranian Oil Company v Council
(T‑578/12, not published, EU:T:2014:678
), and according to which the reference to a weapons programmes ‘contribution’ covered by the relevant listing criteria should be interpreted as requiring either a direct payment or payments of such significance that, without them, the weapons programme would be materially affected cannot call those findings in question.
148
The interpretation of the relevant listing criteria that is proposed in the present case is entirely consistent with the statements on interpretation recalled by the Court of Justice in the judgment of
1 March 2016,
National Iranian Oil Company v Council
(C‑440/14 P, EU:C:2016:128
). Thus, it was held that a regulation providing for restrictive measures must be interpreted in the light not only of the decision adopted in the framework of the common foreign and security policy referred to in Article 215(2) TFEU, but also of the historical context in which the provisions were adopted by the European Union, that regulation being one such provision. The same applies to a decision adopted in the area of the common foreign and security policy, which must be interpreted taking into account the context in which it is adopted (judgment of
1 March 2016,
National Iranian Oil Company v Council
, C‑440/14 P, EU:C:2016:128, paragraph 78
).
149
As has already been pointed out in paragraph 92 above, the restrictive measures against the Democratic People’s Republic of Korea were imposed in response to a number of nuclear tests carried out by the Democratic People’s Republic of Korea, which were condemned by UNSC resolutions and considered a serious threat to an important objective of the European Union, that of maintaining international peace and security.
150
In that context, if, as KNIC submits, the restrictive measures in question covered only entities or persons directly linked to nuclear proliferation activities and contributing directly to those activities, and not also entities and persons who ‘could contribute’ to those activities, the attainment of the Council’s objectives might be frustrated since support, particularly financial support, for nuclear proliferation activities could easily be given through other entities or persons indirectly linked with those activities.
151
It follows that the Council was entitled to consider that the formulation of the listing criteria in question and the adoption of restrictive measures against KNIC was likely to contribute to putting pressure on the North Korean regime that might put an end to, or attenuate, the nuclear proliferation activities (see, to that effect and by analogy, judgment of
5 November 2014,
Mayaleh v Council
, T‑307/12 and T‑408/13, EU:T:2014:926, paragraphs 147 and 148
).
152
Second, in so far as KNIC relies on the insufficiency of the evidence and disputes the fact that the revenue which it generates contributes to the nuclear proliferation-related activities of the Democratic People’s Republic of Korea, suffice it to note that, in the light of the listing criteria in question, the Council is not obliged to present evidence that the resources of a particular entity have been used directly for the purposes of the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea; rather, it is for the Council to substantiate its decision in the most plausible manner possible with a body of evidence showing that those resources may contribute to that end (see, by analogy, judgment of
21 April 2015,
Anbouba v Council
, C‑630/13 P, EU:C:2015:247, paragraph 53
).
153
Any other interpretation would conflict not only with the wording of the listing criteria in question but above all with the object and purpose of the restrictive measures regime in relation to the Democratic People’s Republic of Korea. In addition, in the absence of investigative powers in third countries, gathering evidence of a tangible contribution to nuclear activities in that State is, at the very least, excessively difficult.
154
In the present case, first of all, it must be pointed out that KNIC has acknowledged that it paid ordinary tax to the North Korean State, although it did not specify the amount.
155
Next, it must be noted that it is apparent from the analysis in paragraphs 112 to 114, 120 to 121 and 130 to 137 above that KNIC is a profitable undertaking, with a monopoly in the insurance market, which generates substantial foreign exchange revenue.
156
Last, as is apparent from the analysis in paragraphs 110 to 118 above, KNIC is a State entity, the property of the North Korean State.
157
Given all those points, it must be held that, as the Commission correctly submits, the fact that KNIC is a State entity would tend to indicate that the foreign exchange revenue generated by that entity may contribute to the State programme of nuclear proliferation, in so far as the North Korean State can decide how the revenue generated by KNIC is to be used. Accordingly, the Council and the Commission did not make any error of assessment in finding that the revenue generated by KNIC could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
158
In the light of the foregoing, it must be held that all the abovementioned matters constitute a set of indicia sufficiently specific, precise and consistent to establish in all likelihood that KNIC is a State-owned and controlled company and that it is generating substantial foreign exchange revenue which could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
159
In those circumstances, it must be held that the Council and the Commission did not make any error of assessment in stating, in the grounds relating to KNIC, that KNIC is a State-owned and controlled company and that it is generating substantial foreign exchange revenue which could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea.
160
In the fourth place, as regards the existence of a link between KNIC and Office 39, which KNIC denies, it must be noted, having regard to the file submitted to the Court, that, in the absence of any information or evidence as to the nature and existence of that link, the Council and the Commission have not substantiated to the requisite standard that aspect of the grounds.
161
However, the fact that the Council and the Commission have not substantiated to the requisite standard that aspect of the grounds at issue before the Court does not call in question the legality of those grounds. It is evident from the case-law that if, at the very least, one of the reasons mentioned in the summary provided is sufficiently detailed and specific, that it is substantiated and that it constitutes in itself sufficient basis to support that measure, the fact that the same cannot be said of other such reasons cannot justify the annulment of that measure (see, by analogy, judgment of
14 January 2015,
Abdulrahim v Council and Commission
, T‑127/09 RENV, EU:T:2015:4, paragraph 68
and the case-law cited).
162
In the present case, the finding that KNIC is a State-owned and controlled company which is generating substantial foreign exchange revenue that could contribute to the nuclear proliferation-related programmes of the Democratic People’s Republic of Korea constitutes in itself sufficient basis for the entry of KNIC’s name on the lists at issue.
163
Consequently, the second plea in law must be rejected.