Case T‑563/12

Central Bank of Iran

v

Council of the European Union

(Common foreign and security policy — Restrictive measures taken against Iran with the aim of preventing nuclear proliferation — Freezing of funds — Obligation to state reasons — Rights of defence — Right to effective judicial protection — Error of assessment — Right to property — Right to reputation — Proportionality)

Summary — Judgment of the General Court (First Chamber), 25 March 2015

1.      Judicial proceedings — Objection of lis pendens — Same parties, subject-matter and submissions in two actions — Pleas identical to those of a later action declared inadmissible on account of lis pendens — Admissibility

2.      Judicial proceedings — Pleas in the application — Modification in the course of proceedings — Assimilation to the bringing of an action by means of an application

3.      Fundamental rights — Scope ratione personae — Legal persons constituting emanations of non-member States — Included

(Charter of fundamental rights of the European Union)

4.      Common foreign and security policy — Restrictive measures taken against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Obligation to identify in the statement of reasons individual and specific reasons justifying such measures — Decision falling within a context known to the person concerned, enabling him to understand the scope of the measure taken against him — Admissibility of a summary or implied statement of reasons — Limits

(Council Decision 2012/635/CFSP)

5.      Common foreign and security policy — Restrictive measures taken against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Alternative criteria fixed by EU measures for the inclusion of an entity in the lists of persons and entities concerned by the restrictive measures — Scope

(Council Decision 2010/413/CFSP, Art. 20(1)(b) and (c); Council Regulation No 267/2012, Art. 23(2)(a), (b) and (d))

6.      Acts of the institutions — Statement of reasons — Obligation — Scope — Reference to the legal basis of a restrictive measure taken in the context of the common foreign and security policy — Omission not constituting a substantial defect — Limits — Express reference indispensable to the exercise of judicial review

(Council Decision 2012/635/CFSP; Council Regulation No 945/2012)

7.      Acts of the institutions — Statement of reasons — Obligation — Scope — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Alternative criteria fixed by EU measures for the inclusion of an entity in the lists of persons and entities concerned by the restrictive measures — Sufficiency of reasoning based on only one of those criteria

(Council Decision 2012/635/CFSP; Council Regulation No 945/2012)

8.      Common foreign and security policy — Restrictive measures taken against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Obligation to state reasons — Criterion of support provided to nuclear proliferation — Reference to financial support provided by the central bank of Iran to Government activities — Sufficient statement of reasons

(Council Decision 2012/635/CFSP; Council Regulation No 945/2012)

9.      EU law — Principles — Right to effective judicial protection — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Obligation to communicate the incriminating elements with a view to putting the person concerned in a position usefully to refer the matter to the EU judicature and enable the latter to review the legality of the act in question — No infringement

(Charter of Fundamental Rights of the European Union, Art. 41(2)(a); Council Decision 2012/635/CFSP; Council Regulation No 945/2012)

10.    Common foreign and security policy — Restrictive measures taken against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Restriction of the right to property and the free exercise of an economic activity — No breach of principle of proportionality

(Council Regulation No 945/2012)

1.      See the text of the decision.

(see paras 32-37)

2.      See the text of the decision.

(see para. 33)

3.      See the text of the decision.

(see para. 49)

4.      Where acts containing restrictive measures taken in the context of the common foreign and security policy are based on the criterion of assistance in circumventing other restrictive measures, and where it has been noted in those acts that the applicant had been involved in activities to circumvent sanctions, the statement of reasons is insufficient, where it does not enable the applicant or the Court to understand the circumstances which led the Council to consider that that criterion was satisfied in the case of the applicant and, accordingly, to adopt the said acts. That statement of reasons appears to be no more than a reproduction of the criterion itself. It contains nothing in the form of specific reasons why that criterion is applicable to the applicant. In the absence of any other details, that statement of reasons is insufficient to enable the applicant to determine, having regard to the criterion of assistance in circumventing restrictive measures, whether the contested acts are well founded and to state a defence before the Court, and to enable the Court to exercise its power of review.

In that regard, whilst the reasoning may be implicit on condition that it enables the persons concerned to know why the measures in question were taken and provides the competent court with sufficient material for it to exercise its power of review, it is not obvious in the case of the central bank of the Islamic Republic of Iran that the latter necessarily assisted persons or entities involved in the Government of Iran or controlled by it, and whose names were included in the lists of persons and entities subject to the restrictive measures adopted against the Islamic Republic of Iran, to evade or violate those measures by providing them with banking services, for example, by making funds available.

(see paras 53-58, 75, 77-79)

5.      In so far as the criteria defined in Article 23(2)(a), (b) and (d) of Regulation No 267/2012 concerning restrictive measures against Iran and repealing Regulation No 961/2010, and in Article 20(1)(b) and (c) of Decision 2010/413 concerning restrictive measures against Iran are alternative criteria, it is necessary to specify to what extent, in those provisions, the criterion of support to the Government of Iran may be distinguished from the criterion of support for nuclear proliferation. In that regard, the latter criterion implies that the existence of a direct or indirect link is established between the activities of the person or entity concerned and nuclear proliferation. The criterion of support to the Government of Iran, which extends the scope of the restrictive measures in order to reinforce the pressure being brought to bear on the Islamic Republic of Iran, covers any activity of the person or entity concerned which, regardless of any direct or indirect link established with nuclear proliferation, is capable, by its quantitative or qualitative significance, of encouraging that proliferation, by providing the Government of Iran with support in the form of resources or facilities of a material, financial or logistical nature which allow it to pursue nuclear proliferation. The existence of a link between the provision of such support to the Government of Iran and the pursuit of nuclear proliferation activities is thus presumed by the applicable legislation, which is aimed at depriving the Government of Iran of its sources of revenue, in order to oblige it to end the development of its nuclear proliferation programme as a result of insufficient financial resources.

(see paras 63, 66)

6.      In the matter of restrictive measures taken in the context of the common foreign and security policy, in addition to indicating the legal basis of a measure, the obligation to state reasons by which the Council is bound relates to the circumstances which enable it to hold that one or other of the listing criteria is satisfied in the case of the parties concerned. Failure to refer to a precise provision need not necessarily constitute an infringement of essential procedural requirements when the legal basis for the measure may be determined from other parts of the measure. However, such explicit reference is indispensable where, in its absence, the parties concerned and the Courts of the European Union are left uncertain as to the precise legal basis.

(see paras 67, 68)

7.      See the text of the decision.

(see paras 75, 86-88)

8.      In the matter of restrictive measures taken in the context of the common foreign and security policy, and in particular of the freezing of funds of the central bank of the Islamic Republic of Iran, although, as regards the criterion of support to the Government of Iran, the Council is obliged to state and to specify the resources and facilities which the applicant allegedly provided to that government, it is not obliged to give reasons for the contested acts in relation to the possible use of those resources and facilities by the Government of Iran for the purpose of its pursuit of nuclear proliferation. Thus, by merely expressly referring to financial support to the Government of Iran, without referring to the financial services which the bank provides to the Iranian Government, in its capacity as the central bank of the Islamic Republic of Iran, the Council nevertheless places that bank in a position to understand that it is referring to the said financial services, which it provides in that capacity to the said government.

(see paras 81-84)

9.      See the text of the decision.

(see paras 92-94)

10.    See the text of the decision.

(see paras 114, 115, 117-120)