[JURIST] The European Court of Justice (ECJ) [official website; JURIST news archive] has ruled [case materials; press release, PDF] that the EU violated the fundamental property rights of a Saudi business and a Swedish foundation linked to al-Qaeda [JURIST news archive] by freezing their assets without giving them a hearing. The EU's highest court on Wednesday reversed a 2005 Court of First Instance decision dismissing complaints [JURIST report] brought by Yassin Abdullah Kadi and the Al Barakaat International Foundation, whose bank accounts were frozen in 2001. Although the ECJ agreed with the lower chamber that the European Council [official website] had the authority to adopt a regulation [PDF text] allowing such seizures, it found that EU courts had jurisdiction to review the measure and, further, that Kadi and Al Barakaat had a right to effective judicial review. According to the ECJ opinion,

the contested regulation, in so far as it concerns the appellants, was adopted without any guarantee being given as to the communication of the inculpatory evidence against them or as to their being heard in that connection, so that it must be found that that regulation was adopted according to a procedure in which the appellants' rights of defence were not observed, which has had the further consequence that the principle of effective judicial protection has been infringed.

It follows from all the foregoing considerations that the pleas in law raised by Mr Kadi and Al Barakaat in support of their actions for annulment of the contested regulation and alleging breach of their rights of defence, especially the right to be heard, and of the principle of effective judicial protection, are well founded.

The ECJ gave the council three months in which to cure the defects in the regulation. AP has more. The Financial Times has additional coverage.

Other groups and individuals have successfully challenged similar measures in the EU courts. Earlier this year, some European Parliament members criticized the watch list [JURIST report] as unfair and opaque, saying that the process for adding names to the list should be changed. In July 2007, the Court of First Instance overturned [JURIST report] an EU decision freezing the assets of the Communist Party of the Philippines (CPP) chairman and the Hamas-affiliated al-Aqsa Foundation, finding that the EC did not give the plaintiffs an opportunity to challenge the legal basis for their inclusion on a terrorist watch list. In December 2006, the same court similarly annulled an asset freeze [JURIST report] against the People's Mojahedin Organization of Iran. That judgment prompted the European Council to revise the procedures [JURIST report] used in establishing and maintaining the EU's terror list.