1. Authorities in Charge

In general, in the United States each sanction program has its own rules. So, President Clinton’s Executive Order 12947 delegated authority to the Secretary of State to designate persons or entities that have committed, were likely to commit, or provided support for acts of terrorism in the Middle East. It also empowered the Secretary of the Treasury to determine the persons or entities owned or controlled by said designees.³⁵

Similarly, President Bush’s Executive Order 13224 (2001) delegated authority to the Secretary of State to ascertain the persons or entities that have committed, or posed a significant risk of committing, acts of terrorism. Additionally, it gave authority to the Secretary of the Treasury to determine persons or entities “owned or controlled by, or act for or on behalf of” the persons or entities that “assist in, sponsor, or provide financial, material, or technological support for ... or other services to or in support of” specified persons or entities; or that were “otherwise associated with” said entities.³⁶

In Mexico, financial statutory laws grant the Mexican Secretariat of Finance and Public Credit the authority to issue a List of Blocked Persons and dictate the procedure to introduce, modify or remove the entry of any name on the list.³⁷

So, it is clear that in the United States, the power to freeze assets basically lies in two main bodies: the Department of State identifying threats to national security and the Department of the Treasury determining the direct and indirect participation of entities owned or controlled by those named as threats. On the other hand, in Mexico, asset freezing is an exclusive power of the Secretariat of Finance. The national authority in charge of national security is not involved at all.

2. The Listing Process

In the United States, the designation process is carried out by the Office of Foreign Assets Control (OFAC), an office in the Department of the Treasury that collaborates with several other federal agencies. This office identifies possible targets to be added to the list of designated terrorists. All classified and non-classified information is gathered in a record compiled by the OFAC and forms the basis for this list. The record is then analyzed by the legal office of the Department of Justice in order to establish legal designations. The final decision is taken by the National Security Council Policy Coordinating Committee on Terrorist Financing, composed of representatives from the Central Intelligence Agency (CIA), the Federal Bureau of Investigation (FBI), and the Departments of Treasury, State, Defense, Justice, and Homeland Security.³⁸

After 9/11, the IEEPA was amended by the Act for Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism, best known as the Patriot Act.³⁹ Consequently, Section 1702 (a) (1) (B) of the IEEPA allows freezing assets during an investigation.⁴⁰ Thus, even though the designation and the record have not been formally completed, an entity can find its assets frozen.

In Mexico, the rules to introduce, modify or remove entries on the List of Blocked Persons⁴¹ empower the Mexican Secretariat of Finance to introduce or modify entries by taking into consideration the lists issued by the un Security Council pursuant to its own Resolutions 1267 (1999) and 1373 (2001), and lists released by international organizations or inter-governmental groups. However, no guidelines or principle has been provided to do so.

As for national sources, the Mexican Secretariat can add people when national authorities have enough proof to prosecute them for performing terrorist activities, financing terrorism and money laundering; as well as those who have been condemned for such crimes, and those who refuse to give information about the mentioned crimes, or conceal the origin, objectives, location or property of funds derived from said crimes.

In short, in the United States, the final decision to blacklist someone is taken by a high level group in which departments involved in national security play an important role while in Mexico, the designation process is carried out solely by the Secretariat of Finance.

In Mexico, the bases for creating the List of Blocked Persons can be classified into two groups: international causes and national ones. As international sources are more active, the determination of blocked persons might be largely deemed as an administrative procedure to assist in the execution of blocking orders issued by countries that have suffered terrorist attacks or have designated certain individuals or entities as terrorist supporters. Nonetheless, other domestic criminal causes are also considered for the List of Blocked Persons.

3. The Execution of Asset Freezing

In the United States, once an individual or an entity has been blacklisted, the OFAC orders to block all “property or interests in property” held by the designated entity or individual in the United States or within the control or possession of US nationals. As a result of the blocking order, the rights to exercise any powers and privileges of ownership are transferred indefinitely and exclusively to the OFAC although the legal title of these frozen assets remains with the designated individual or entity.⁴²

The OFAC prohibits US persons from dealing in assets that have been blocked or from providing any kind of services for the benefit of designated persons or entities, including legal services, charitable contributions or donations intended to “relieve human suffering.”⁴³ Nonetheless, under limited circumstances, a license to engage in otherwise prohibited transactions may be granted by OFAC to designees or third parties.⁴⁴

The term “US person” means any US citizen, permanent resident alien, entity organized under the laws of the United States (including foreign branches), or person in the United States.⁴⁵ Consequently, this obligation is applicable not only to financial entities, but also to any kind of natural or legal person in the United States.

All US persons who have in their possession or control any property or interests in blocked property, including financial institutions that receive and block payments or transfers, are required to report to the OFAC, within 10 business days from the date said property becomes blocked.⁴⁶

In Mexico, the Mexican Secretary of the treasury notifies financial institutions when an entity or an individual has been so designated. The financial institutions that are obliged to freeze accounts or banned from celebrating operations with blocked persons are banks, brokerage firms (casas de bolsa); investment fund operators and distributor companies of investment fund shares (sociedades operadoras y sociedades distribuidoras de acciones de fondos de inversión), money exchange firms (casas de cambio); entities engaged in low-amount foreign exchange known as centros cambiarios; money remitters (transmisores de dinero); multiple purpose financial institutions (sociedades financieras de objeto múltiple);⁴⁷ savings and loan associations (sociedades financieras populares), financial cooperative associations (sociedades cooperativas de ahorro y préstamo); community financial associations (sociedades financieras comunitarias), credit unions and general deposit warehouses (almacenes generales de depósito); according to the provisions of their respective statutory laws.⁴⁸

Once an obliged financial institution has realized that one of their clients’ or users’ data match the List of Blocked Persons, it must basically do three things. First, it must cease all dealings involving the designee’s accounts or the delivery of any kind of services that benefit the designated persons or entities. Secondly, an Unusual Transaction Report (UTR)⁴⁹ must be filed with the Mexican Secretariat of Finance within twenty-four hours after finding a match.

A UTR is a form by which a financial institution informs the Mexican Secretariat of Finance and its Financial Intelligence Unit (FIU),⁵⁰ of its suspicions or reasonable grounds to suspect that the relevant funds might proceed from criminal activity, or be a match on the list.⁵¹

Thirdly, the financial institution must inform the blocked individual or entity in writing and must include the following information:⁵² 1) the accounts and transactions that have been frozen since the identification data match, 2) the applicable law and procedure, and 3) the clarification that any existing claims may be filed before the fiu within the following ten business days.

Additionally, the Mexican legal system allows some humanitarian exceptions in accordance with Resolution 1452 (2002) of the UN Security Council. Consequently, a blocked person might request a license to access blocked funds to pay for basic expenses, including the provision of legal services.

Up to this point, we can say that one big difference in assets freezing is its scope. In the United States, the measure covers financial and non-financial assets, and is mandatory for any person in the United States. However, in Mexico, this measure only applies to financial assets and is mandatory for the above-mentioned financial institutions.

The consequences of being blacklisted appear to be similar in both legal systems. Basically, the obliged subjects must stop dealing in the assets of or providing any service to individuals or entities who have been designated as a blocked person, in addition to filing a report with the competent financial authority.

Both the US and the Mexican regimes permit designees to access certain blocked funds to pay for basic living expenses, including limited legal services, in compliance with un Security Council resolutions.

4. The Delisting Process

In the United States, removal from the list is possible on grounds of mistaken identity or an error if the blocked individual or entity challenges the designation. The interested party must submit a request in writing to OFAC to demonstrate that the State should not have seized their property or that they were innocent owners. However, at no point does the petitioner have the opportunity to review any classified evidence that the various agencies may have compiled against him.⁵³

OFAC designations could be subject to judicial review by district courts, pursuant to the Administrative Procedure Act (APA). Consequently, the review is governed by the “arbitrary and capricious” standard, which means that courts will review whether, given the relevant factors, the agency acted reasonably and within the scope of its authority. Over time, a highly deferential standard of review has been given to the President in the exercise of his powers under the IEEPA.⁵⁴

Moreover, as a result of the enhanced power granted to the US President after 9/11, the Patriot Act gave the President the power to submit classified evidence in camera and ex parte. ⁵⁵ This means that the Attorney General can present classified evidence against a blocked entity to the court without the presence of the blocked entity’s attorney and without ever disclosing this evidence to the party whose assets are frozen, depriving the designated entity of the usual right to confront the evidence against it.⁵⁶ In other words, courts are allowed to consider evidence that would otherwise be inadmissible under the Federal Rules of Evidence.⁵⁷

In Mexico, the relevant rules⁵⁸ establish a procedure before an administrative authority, the Financial Intelligence Unit (FIU), which is a Mexican Secretariat of Finance unit that functions as an administrative judge.⁵⁹

Based on the information provided by the financial institution that has blocked the accounts or denied rendering any service, the blocked person or entity can bring their claims before the FIU in writing and offer evidence. The fiu will then issue its decision explaining whether the removal is granted or not.

The blocked persons can be removed from the list when the abovementioned administrative procedure ends in an acquittal, when international organizations or intergovernmental groups remove the blocked person from their lists, when national authorities deem that the reasons for inclusion are no longer applicable, or when a criminal judge acquits the defendant of carrying out terrorist activities, financing terrorism and money laundering.

The Mexican review process afforded by the rules is focused on correcting false positives instead of challenging the causes of the asset freezing order or the inclusion of a person’s data on the List of Blocked Persons. This is especially worrying when the reason for that insertion is due to un Security Council sanctions because the review process would not help the designee revoke the Security Council designation. So, an affected person would have her assets frozen for as long as she is on the UN list.

In summary, both systems have established an administrative procedure to permit designees to be removed from the corresponding list. Nevertheless, neither can be considered to provide sufficient due process protection because they are more concerned with correcting false positives than reviewing the causes that motivated the listing.

The following section discusses the main constitutional and legal concerns arising from the deployment of the asset freezing measure in an effort to suppress fundraising of terrorism and money laundering.

2. Due Process Concerns: Secret Evidence

According to the Fifth Amendment of the US Constitution, the Due Process Clause prohibits the government from depriving any person of life, liberty, or property without due process of law. As a general rule, the due process system requires that each party have the same opportunity to refute the adversary’s evidence by providing evidence to the contrary. Surprisingly, under the new anti-terrorism regulation, defendants are not given any opportunity to confront the classified evidence used against them. Besides, the Patriot Act permits assets to be blocked pending investigation and to submit classified evidence in camera and ex parte, which could lead to freezing assets based on scarce or irrelevant evidence⁸¹ and without any time limit.

US courts have generally upheld the ability to confront witnesses and respond to evidence as a central part of due process. Nevertheless, where national security is concerned, the courts have historically been reluctant to interfere in due process claims. In this regard, the courts have upheld the use of in camera, ex parte evidence against an entity pending investigation when Congress and the President have determined the need to keep government information secret. The courts have also denied due process challenges, asserting that (1) the notification received at the time of the blocking assets was appropriate in view of pressing circumstances related to national security; and (2) the OFAC written review process provides an adequate opportunity to be heard.⁸²

On the other hand, in Mexico and following the arguments presented in the previous section, every single governmental act must be warranted in writing, pointing out the applicable law and the circumstances that made that law applicable. Consequently, it would not be legally possible to freeze financial assets based on classified information.

Once a financial institution finds a match on the list, it would only inform the designee that her data matches the List of Blocked Persons. However, the financial institution lacks sufficient information to explain the facts and reasons why the person or entity has been included on the List of Blocked Persons.

Being included on the List of Blocked Persons might involve a grievance against an individual, as far as he had not received a written warrant from the authority explaining the causes of the inclusion on the List. In such a case, the individual would be deprived of appropriate information to mount a fair defense. Precisely, these are the kinds of situations Article 16 of the Mexican Constitution aims to prevent.

In sum, even though freezing financial assets based on secret evidence would not be possible under Mexican law, the lack of serving notice to designees amounts to a similar situation, as designees are unaware of specific facts and reasons for being blacklisted and are thus incapable of preparing an adequate defense. In this respect, both the US and the Mexican systems have a considerable area of opportunity to grant better protection of basic human rights.

3. Infringement of Property Rights

In the United States, it has also been argued that blocking assets constitutes an uncompensated taking,⁸³ in terms of property rights and in violation of the Taking Clause contained in the Fifth Amendment. Thereupon, the US government has stated that a blocking order does not constitute a taking since freezing does not entail a title transfer.

Over the years, courts have consistently rejected claims based on similar considerations. In the context of the IEEPA, courts have ruled that blocking under executive orders is a temporary deprivation and does not vest the assets with the government.⁸⁴ Nevertheless, some courts have cautiously suggested at the possibility that a long-term blocking order may have evolved into vesting property in the United States⁸⁵ or, at least at the lower tier, some courts have found it an infringement of property rights.⁸⁶

On the other hand, in Mexico, while the Supreme Court of Justice has not ruled on the infringement of property rights in cases of financial institutions’ freezing assets within the context of preventing money laundering and terrorist financing, its recent intervention has been limited to stating that similar preventive measures in forfeiture proceedings entail an interference action but do not entail the deprivation of property rights. During the imposition of this precautionary measure, the affected person or entity still holds property right, but an encumbrance is placed on it so as to temporarily prevent this right from being fully exercised.⁸⁷

As the Mexican Supreme Court has recognized that these kinds of preventative measures involve acts of government interference on an individual’s property right, serving a warrant would undoubtedly be needed to carry out the freezing of assets, pursuant to Article 16 of the Political Constitution of the United Mexican States. However, the opinion of the Mexican Supreme Court does not consider that this temporary measure could be extended indefinitely. In these circumstances, a long-term asset freezing would be equated to an infringement of property rights.

In short, despite the historically reluctant position of US courts to sustain the deprivation of property rights, they now seem to be more aware of the possible infringement of this right. In Mexico, this debate has not yet begun, as an indefinite extension of asset freezing has not been brought before Mexican Courts. However, in analogue cases, without considering PML/FT objectives, the Mexican Supreme Court has ruled that freezing assets is a preventative restriction on property rights.

4. Conflict of Interest

In the United States, conflicts of interest might arise when a designee, who has had his or her assets frozen, applies to the ofac for a license to release certain funds to pay legal expenses, among other reasons. Basically, Executive branch officials are in control of who can sue and how actively the lawsuit can be pursued if they allow the release of the funds.⁸⁸

In the Mexican legal system, the situation is similar. According to un resolutions, a blocked person or entity can request a license to access blocked funds in order to cover basic life expenses, the fulfillment of contract obligations previously incurred with a financial institution or legal services. However, this request may entail a conflict of interest since the officials authorized to give this license -the FIU- are the same ones who carry out the corresponding administrative proceedings, and against whom judicial proceedings could be potentially brought.

The applicable rules in both systems do not establish any provision to prevent conflicts of interest nor do they provide any principle or guideline for granting this request. Consequently, blocked persons are subjected to the discretion of the relevant authority. In short, both systems struggle with the same problem. One possible solution would be for an independent judge to rule on the petition for a license and thus avoid a conflict of interest.

5. Privacy

In the United States, any federal agency can now obtain sensitive and private data without a subpoena or judicial intervention when investigating one of the approximately two hundred possible offenses under the Patriot Act.⁸⁹ In January 2002, Assistant Attorney General Michael Chertoff notified the Senate Banking Committee that with the new information-gathering powers, “the principal provisions of the Right to Financial Privacy Act no longer apply to letter requests by a government authority authorized to conduct investigations or intelligence analysis for purposes related to international terrorism”.⁹⁰

In Mexico, financial service user’s private data is protected against unlawful transmission by the statutory law that governs financial institution transactions. For example, in the banking sector, Article 142 of the Credit Institutions Law (LIC) prohibits credit institutions from providing information about accounts or services to any person other than the one with the legal right to receive such information. However, the exceptions and conditions under which financial institutions are allowed to transmit or share information with some authorities are specified in the same provision.⁹¹

The Mexican Secretariat of Finance and Public Credit is among those allowed to request personal data in order to prevent money laundering and terrorist fundraising.⁹² Therefore, the Mexican legal system has no major concern in this field.

6. The Right to Free Exercise of Religion

In the United States, it has been widely believed that terrorists are funding their objectives through charitable organizations, particularly those focused on fulfilling Muslim obligations, like the zakat -the obligation to pay two and a half percent of their wealth when it exceeds a minimum level.⁹³ It is commonly believed that charity organizations are attractive targets for terrorist entities due to the reluctance to scrutinize the use of money collected in countries where the zakat and Sadaqah (supporting charitable works through voluntary contributions) are religious obligations. Moreover, the US Government does not easily discern whether the charity that collects funds for humanitarian causes is actually being utilized for that purpose or used as a monetary source to support terrorism.⁹⁴

As a result, after 9/11, twenty-seven Islamic charities were designated terrorist organizations or terrorist supporters by the US Treasury Department. Since the charity organizations were all Islamic, it was also argued that OFAC designations violated the Religious Freedom Restoration Act (RFRA) as the asset freezing measure substantially encumbers the free exercise of religious belief.⁹⁵

In Holy Land Foundation for Relief & Dev. v. Ashcroft (2002), the court considered⁹⁶ that First Amendment freedom of religion claims were debatable since the charitable organization that filed the claim had failed to prove that it was a religious organization per se⁹⁷ nor did it prove that the exercise of religion had been substantially impeded. During the appeal, on the grounds that even if the charity could in fact exercise religion as protected by the First Amendment, the circuit court sustained that “there is no free exercise right to fund terrorists” and “preventing such a corporation from aiding terrorists [did] not violate any right contemplated in the Constitution or the RFRA.”⁹⁸

The Mexican legal system has not experienced a bias on targeted listed persons due to their religious belief, race, political opinions or any other opinions since the sources for creating the List of Blocked Persons are other international lists and some national criminal causes. A deviation from this would not be directly attributable to the Mexican government.

7. The Right to Free Association

In the Holy Land Foundation for Relief & Dev. v. Ashcroft (2002) case, it was argued that the government’s actions were unconstitutional because the government’s imposition of guilt due to Holy Land’s association with Hamas failed to establish that the Holy Land Foundation actually had a specific intent⁹⁹ to further terrorists’ illegal aims, specifically those of Hamas.¹⁰⁰ The court rejected the contention that the First Amendment required specific intent to further terrorists’ unlawful aims, reasoning that the requirement of a specific intent was only involved when the government sought to impose guilt by association alone; whereas in this case, it was not mere association that created guilt, but rather the possible funding of terrorism.¹⁰¹ Similarly, the court also held that freedom of association had not been violated because the designation and blocking of funds promote governmental interests in combating terrorism by undermining its financial base, and “there is no other, narrower means of ensuring that charitable contributions to a terrorist organization are for a legitimate purpose.”¹⁰²

Under the Mexican legal system, it would be difficult for the freezing of financial assets to be tantamount to a claim of free of association since the causes for including somebody on the List of Blocked People is not related to the right to participate in any association,¹⁰³ but for having been included on a certain list or being involved in specific local criminal causes.

8. The Right to Free Speech

In the United States, designated persons argued that the First Amendment of the Constitution includes the solicitation of funds under free speech clause. According to them, this is a necessary component for the effective flow of information and citizens’ ability to advocate different positions.¹⁰⁴

Nonetheless in this respect, US courts have found an important government interest in regulating the non-speech element to justify incidental limitation to the First Amendment. According to United States v. O’Brien (1968), the elements are the following: 1) the President had the power to issue executive orders under the IEEPA; 2) an Executive order advanced an important government interest -to combat terrorism by undermining its financial bases; 3) this government interest was unrelated to the suppression of free expression, and 4) this incidental restriction was no greater than necessary to further government’s interest.¹⁰⁵

Under the Mexican legal system, holding that the freezing of financial assets could be viewed as an infringement of free of speech could hardly be sustained since freedom of speech can only be restricted when it “offends good morals, infringes the rights of others, incites to crime, or disturbs the public order,”¹⁰⁶ pursuant to Articles 6 and 7 of the Mexican Constitution. The interpretation of this right has not been extended to cover the collection of money to support ideas.¹⁰⁷

In brief, US Courts have set forth the requirements under which freedom of speech can be restrained in terms of asset freezing. In the Mexican regime, the freezing of financial assets could hardly amount to a violation of freedom of speech.

9. Burden of Proof

Globally, the strategy to combat money laundering and financing terrorism has changed in recent years. Initially, it required criminalizing both money laundering and terrorism financing, pursuant to the Vienna Convention and the Palermo Convention. Then, country members were urged to adopt legislative measures that empowered their competent authorities to freeze or seize and confiscate laundered property, proceeds from, or instrumentalities used in or intended for use in money laundering or allocated for use in, the financing of terrorism, terrorist acts or terrorist organizations, without requiring a criminal conviction.¹⁰⁸

As a way to address financing terrorist activities, criminal law has been practically replaced by administrative preventative measures, weakening the burden of proof from beyond a reasonable doubt, as required in criminal cases, to the preponderance of proof used in non-criminal cases.¹⁰⁹ Consequently, both countries have administrative procedures for freezing assets, in addition to criminal procedures to pursue the crimes of money laundering and financing terrorism.

In the United States, the standard of proof for an SDGT designation is lower than the “beyond a reasonable doubt” for criminal procedure. Additionally, the OFAC now has the power to base SDGT designations on classified information, which is not available to the prosecution during criminal proceedings for material support of terrorism.

As a result, the difference in standards of proof applicable to a criminal trial (proof beyond a reasonable doubt) and a regulatory review (preponderance of proof) makes it highly unlikely that an acquittal in the criminal procedure could challenge or affect the administrative designation.¹¹⁰ Furthermore, the courts have held that because terrorist financial freezing does not fall under criminal law, the defendant’s claim to the Sixth Amendment right to confront accusers does not apply,¹¹¹ nor does any other protection under criminal law.¹¹²

Following international standards, the Mexican administrative procedure for freezing assets is independent of criminal prosecution, and is carried out before an administrative official. As such, it is not a legal action brought before a judge.

The asset freezing measure is supplemental to a criminal process against a designated person or entity, but it is not conditional to the existence of such proceedings, according to FATF Recommendation 6.¹¹³ Consequently, the inclusion of any person or entity on the List of Blocked Persons and the resolution of the corresponding administrative procedure do not depend on the existence of criminal proceedings.

Under the relevant rules, the affected person or entity can file a claim before the FIU, where they explain the reasons their financial assets should be freed and submit the relevant evidence. Subsequently, the administrative authority has the discretionary power to decide on the case. An important difference with the US legal system is that in the Mexican regime, an acquittal of the corresponding criminal proceedings would be sufficient to remove a designee from the List of Blocked Persons.

All in all, even though both systems have administrative procedures to review the execution of asset freezing, the consequences of an acquittal in a criminal process are different. In the U.S., the administrative procedure is continued, while in Mexico the procedure is ended. Broadly, these are the main domestic legal concerns involving the freezing of assets in the context of the United States and Mexican legal systems. However, overseas, European courts have reached different determinations for similar concerns. These are discussed in the following section.

1. The Use of Classified Information

Concerning national security policy, the European Court of Human Rights has recognized that even when national security is at stake and the use of confidential information may be necessary, it does not mean that national authorities can declare that the case concerns national security and terrorism and be free from any review by national courts.¹¹⁴ Likewise, on the topic of secret evidence, the Court of First Instance of the European Communities (Seventh Chamber) in People’s Mojahedin Organization of Iran v Council [2008] stated that the Council of the European Union is not entitled to base its decision to freeze funds on information or material in a file communicated by a Member State if said Member State is not willing to authorize its communication to the Community judicature whose task it is to review the legality of that decision.¹¹⁵ This refusal put the Court in a position of being unable to review the lawfulness of the contested decision. Consequently, the Court concluded that, under such circumstances, the applicant’s right to effective judicial protection had been infringed.¹¹⁶

2. The Right to Be Heard

Regarding rights of defense, in particular the right to be heard, in the joined cases of Kadi and Al Barakaat International Foundation v Council and Commission [2008], the European Court of Justice asserted that this right had been infringed because the Council of the European Union neither communicated to the applicants the evidence used against them to justify the restrictive measures which had been imposed on them, nor afforded them the right to be informed of the evidence within a reasonable period after they were enacted. Consequently, the applicants had not been in a position to make their point of view heard in that respect. ¹¹⁷

3. Effective Judicial Review

Similarly, with reference to the right to effective judicial review, in the Kadi case, the European Court of Justice asserted that its review of the validity of any Community measure concerning fundamental rights must be considered an expression of a constitutional guarantee stemming from the European Community Treaty, which was not to be prejudiced by an international agreement -namely the Charter of the United Nations.¹¹⁸

Likewise, the European Court of Justice held that the Community judicature must ensure a review of the lawfulness of all Community acts in the light of fundamental rights, including a review of Community measures designed to give effect to the resolutions adopted by the Security Council under Chapter VII of the Charter of the United Nations.¹¹⁹ Accordingly, the European Court of Justice has stated that while the re-examination procedure carried out by the Sanctions Committee clearly failed to offer guarantees of effective judicial protection that must remain the case.

In particular, the European Court of Justice has asserted that the creation of a focal point and the Office of the Ombudsperson cannot be equated with the provision of an effective judicial procedure for the review of decisions made by the Sanctions Committee¹²⁰ given that: (1) the request is a matter of inter-governmental consultation; (2) the Sanctions Committee is not obligated to consider the views of the blocked person; and (3) there was no provision other than minimal access to the information on which the decision was based to include the petitioner on the list.¹²¹

In other words, the de-listing procedure is not independent and impartial since the accuser is also the judge. It is common that the nation requesting the listing is one of the members of the body deciding whether to list or de-list a person.¹²² Therefore, the Court of Justice concluded that the applicants suffered an infringement of their right to effective judicial review because of the failure to inform the applicant of the evidence given against him and the inability to defend his rights regarding the evidence in question in satisfactory conditions before the Community judicature.¹²³ In short, while no other instance affords real access to judicial protection,¹²⁴ domestic European courts are rather concerned about providing minimal procedural safeguards in European Union courts.

4. Infringement of Property Rights

In this regard, in the Kadi case, the European Court of Justice concluded that the applicants suffered from an infringement of their right to property, resulting from the freezing measures imposed under Regulation No 881/2002. This measure was adopted without providing any guarantee that would enable a designated person or entity to bring his case before the competent authorities. Such a general application and actual open-ended continuation of the restrictive measures constituted an unjustified far-reaching restriction of his peaceful enjoyment of property with potentially devastating consequences, even when arrangements are made for basic needs and expenses.¹²⁵

5. The Right to Freedom of Movement

In Ahmed and Others, the Supreme Court of the United Kingdom was of the opinion that designated persons were effectively ‘prisoners’ of the State as their freedom of movement was severely restricted without access to their funds and the effect of asset freezing on them and their families can be devastating.¹²⁶