Crisis looms for U.N. terrorism sanctions regime

By Mark Trevelyan, Security Correspondent - Analysis

LONDON (Reuters) - A system of U.N. sanctions against suspected al Qaeda and Taliban backers is facing a crisis as the likelihood grows that the top EU court will rule the bloc has violated basic rights by applying them.

In two cases in the space of just eight days, an EU legal adviser has recommended the Court of Justice of the 27-nation European Union should cancel financial sanctions against a Saudi businessman and a Swedish-based money transfer business.

If the court follows the advice from the EU's advocate general, as happens in most cases, it would shatter the argument of the EU Council and Commission that they must implement international law unquestioningly and without review, as handed down by the United Nations Security Council.

A collision between the two legal systems could jeopardize the implementation of U.N. sanctions by a major group of powerful countries. Apart from Britain, which has separate legislation, EU members would have to come up with new laws to give effect to the U.N. measures on their territory, without themselves falling foul of the European Court of Justice (ECJ).

A court ruling that the EU had breached people's fundamental rights by implementing the U.N. sanctions against them "would certainly undermine the regime", said Richard Barrett, coordinator of the U.N.'s al Qaeda and Taliban monitoring team.

"I think that would cause huge upset and difficulties for all the member states of the EU that implement the (U.N.) sanctions through the EU regulation," he said in a telephone interview.

HARSH PENALTIES

Established after the September 11 attacks in 2001, the U.N. blacklist covers 142 alleged Taliban individuals and 228 linked to al Qaeda, as well as 112 business entities it says are connected with Osama bin Laden's network. Compliance is a major challenge for banks, which have to distinguish between listed people and those with similar or identical names.

Critics have long challenged the fairness of the system, saying it subjects people to harsh penalties -- freezing their assets and preventing them from traveling -- without giving them a court hearing or disclosing the evidence against them.

The list includes 12 people believed to be dead, and one acquitted of terrorism offences by a German court.

Cameron Doley, a British lawyer representing Saudi businessman Yassin Kadi in one of the cases before the ECJ, said his client had never received a clear statement of the allegations against him. He had filed his case in the EU because the U.N. had no equivalent tribunal to which he could appeal.

"What this gives us, we hope, is a statement by one of the most prominent and respected courts in the world that this system is an unjustified infringement of the fundamental human rights of those persons who are listed," said Doley, who is managing partner at London-based law firm Carter-Ruck.

In his legal opinion on the Kadi case, EU Advocate General Poiares Maduro said the EU regulation freezing his assets had infringed his rights to property, a fair hearing and effective judicial review.

The absence of an independent tribunal meant there was a real possibility the Saudi had been subjected indefinitely to disproportionate or misdirected sanctions, he said.

"The Court has no way of knowing whether that is the case in reality, but the mere existence of that possibility is anathema in a society that respects the rule of law."