JUDGMENT OF THE GENERAL COURT (Fourth Chamber)
8 July 2020 (*)
(Common foreign and security policy — Restrictive measures taken against Iran with the aim of preventing nuclear proliferation — Freezing of funds — Retention of the applicant’s name on the lists of persons, entities and bodies subject to the freezing of funds and economic resources — Obligation to state reasons — Error of law — Error of assessment — Temporal adjustment of the effects of an annulment)
In Case T‑490/18,
Neda Industrial Group, established in Tehran (Iran), represented by L. Vidal, lawyer,
applicant,
v
Council of the European Union, represented by V. Piessevaux and M. Bishop, acting as Agents,
defendant,
APPLICATION pursuant to Article 263 TFEU for annulment, first, of Council Decision (CFSP) 2018/833 of 4 June 2018 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2018 L 140, p. 87), and of Council Implementing Regulation (EU) 2018/827 of 4 June 2018 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran (OJ 2018 L 140, p. 3), in so far as those acts concern the applicant, and, second, of the letter of 6 June 2018 from the Council to the applicant,
THE GENERAL COURT (Fourth Chamber),
composed of S. Gervasoni, President, L. Madise (Rapporteur) and J. Martín y Pérez de Nanclares, Judges,
Registrar: E. Artemiou, Administrator,
having regard to the written part of the procedure and further to the hearing on 6 February 2020,
gives the following
Judgment
Background to the dispute
Context
1 The applicant, Neda Industrial Group, is a private company that was established in 1984 under the name Pariz Industries Company and is registered in Iran. Its name was changed on 10 December 2003. The applicant’s activities were initially focused on industrial automation and were then extended to the supply of electrical utilities for various industries, the renovation and retrofitting of various plants, and the supply of a range of field instruments, fire and gas detection equipment and industrial valves. At present, it offers its services in various fields, including the design, procurement, integration and commissioning of industrial automation systems, of electrical utilities for industrial plants, of fire and gas detection systems and of kiln shell scanners, specifically for cement plant furnaces; the supply of a wide variety of field instruments, of various ranges of industrial valves and of high-integrity pressure protection system packages for oil and gas industries; and, last, the renovation and retrofitting of plants, including turbo-compressors, gas and oil pumping stations and boilers.
2 The present case arose in connection with restrictive measures put in place by the Council of the European Union in order to apply pressure on the Islamic Republic of Iran to end its proliferation-sensitive nuclear activities and the development of nuclear weapon delivery systems.
3 In June 2006, the applicant provided services to the Iranian company Kala-Electric Company (also known as Kalaye Electric Company, ‘KEC’).
4 On 23 December 2006, the United Nations Security Council adopted Resolution 1737 (2006) (UNSCR 1737 (2006)), paragraph 12 of which, read in conjunction with the annex thereto, listed a series of persons and entities allegedly involved in nuclear proliferation and whose funds and economic resources were required to be frozen. In accordance with that resolution, KEC was included on the list of persons and entities subject to the sanctions imposed by the United Nations Security Council for having been the provider of the pilot fuel enrichment plant at Natanz (Iran) (point 3 of Title A of the Annex to UNSCR 1737 (2006)).
Basic acts and subsequent amendments establishing the system of restrictive measures
5 On 26 July 2010, on the basis of Article 29 TEU, the Council adopted Decision 2010/413/CFSP concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP (OJ 2010 L 195, p. 39). Annexes I and II to Decision 2010/413 list the persons and entities whose assets are to be frozen.
6 On 25 October 2010, on the basis of Article 215 TFEU, the Council adopted Regulation (EU) No 961/2010 on restrictive measures against Iran and repealing Regulation (EC) No 423/2007 (OJ 2010 L 281, p. 1). Annex VIII to Regulation No 961/2010 listed the persons and entities whose assets were frozen.
7 On 23 March 2012, on the basis of Article 215 TFEU, the Council adopted Regulation (EU) No 267/2012 concerning restrictive measures against Iran and repealing Regulation No 961/2010 (OJ 2012 L 88, p. 1). Annex IX to Regulation No 267/2012 reproduced the list that was set out in Annex VIII to Regulation No 961/2010 and thus lists the persons and entities whose assets are to be frozen.
8 On 14 July 2015, the five permanent members of the United Nations Security Council and the Federal Republic of Germany, supported by the High Representative of the Union for Foreign Affairs and Security Policy, concluded with the Islamic Republic of Iran a Joint Comprehensive Plan of Action on the Iranian nuclear issue (‘the JCPOA’). On 20 July 2015, the Security Council unanimously adopted Resolution 2231 (2015), by which it endorsed the JCPOA. In order to implement the JCPOA, the Council adopted, on 18 October 2015, Decision (CFSP) 2015/1863 amending Decision 2010/413 (OJ 2015 L 274, p. 174), and Regulation (EU) 2015/1861 amending Regulation No 267/2012 (OJ 2015 L 274, p. 1).
Criterion applied on the adoption of restrictive measures against the applicant
9 Article 20(1)(b) of Decision 2010/413, as amended by Council Decision 2013/497/CFSP of 10 October 2013 (OJ 2013 L 272, p. 46), provides for the freezing of the funds and economic resources of ‘persons and entities not covered by Annex I that are engaged in, directly associated with, or providing support for, Iran’s proliferation-sensitive nuclear activities or for the development of nuclear weapon delivery systems, including through the involvement in procurement of the prohibited items, goods, equipment, materials and technology, or persons or entities acting on their behalf or at their direction, or entities owned or controlled by them, including through illicit means, or persons and entities that have evaded or violated, or assisted designated persons or entities in evading or violating, the provisions of [United Nations Security Council Resolution (UNSCR)] 1737 (2006), UNSCR 1747 (2007), UNSCR 1803 (2008) and UNSCR 1929 (2010) or of [Decision 2010/413], as well as other members and entities of [the Islamic Revolutionary Guard Corps (IRGC)] and [Islamic Republic of Iran Shipping Lines (IRISL)] and entities owned or controlled by them or persons and entities acting on their behalf or persons and entities providing insurance or other essential services to IRGC and IRISL, or to entities owned or controlled by them or acting on their behalf, as listed in Annex II [to Decision 2010/413]’.
10 In accordance with Article 20(1)(b) of Decision 2010/413, Article 23(2)(a) of Regulation No 267/2012 provides for the freezing of the funds of the persons, entities and bodies listed in Annex IX thereto, who have been identified as ‘being engaged in, directly associated with, or providing support for Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems by Iran, including through involvement in the procurement of prohibited goods and technology, or being owned or controlled by such a person, entity or body, including through illicit means, or acting on their behalf or at their direction’.
Inclusion of the applicant’s name by acts subsequent to the basic acts
11 By Decision 2011/299/CFSP of 23 May 2011 amending Decision 2010/413 (OJ 2011 L 136, p. 65), the Council included the applicant on the list of persons and entities covered by Article 20(1)(b) of Decision 2010/413 (see paragraph 9 above). That list is set out in Annex II to Decision 2010/413.
12 By Implementing Regulation (EU) No 503/2011 of 23 May 2011 implementing Regulation No 961/2010 (OJ 2011 L 136, p. 26), the Council included the applicant on the list of persons and entities covered by Article 16(2)(a) of Regulation No 961/2010. That provision provided for the freezing of the funds and economic resources belonging to, owned, held or controlled by the persons, entities and bodies listed in Annex VIII thereto. Annex VIII to Regulation No 961/2010 included the natural and legal persons, entities and bodies not covered by Annex VII who, in accordance with Article 20(1)(b) of Decision 2010/413, had been identified as ‘being engaged in, directly associated with, or providing support for Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems by Iran, including through involvement in the procurement of prohibited goods and technology, or being owned or controlled by such a person, entity or body, including through illicit means, or acting on their behalf or at their direction’.
13 By Regulation No 267/2012, which repealed Regulation No 961/2010, the applicant’s name was listed in Annex IX to Regulation No 267/2012, in accordance with Article 23(2)(a) of that regulation (see paragraph 10 above).
Reasons justifying the restrictive measures against the applicant
14 In Decision 2010/413, as amended by Decision 2011/299, and in Regulation No 267/2012, the Council justified the adoption of restrictive measures against the applicant by reference to the criterion laid down in Article 20(1)(b) of Decision 2010/413 and in Article 23(2)(a) of Regulation No 267/2012 (‘the criterion at issue’). It included the applicant on the lists of entities set out in Annex II to Decision 2010/413 and Annex IX to Regulation No 267/2012 (together, ‘the lists at issue’).
15 At point 47 of each of the lists at issue, the reason for the inclusion of the applicant’s name is stated as follows:
‘Industrial automation company that has worked for the [United Nations]-sanctioned Kalaye Electric Company (KEC) at the uranium fuel enrichment plant at Natanz.’
Notification and review of the restrictive measures
16 By letter from the Council of 24 May 2011, the applicant was informed of its inclusion on the lists in Annex II to Decision 2010/413 and Annex VIII to Regulation No 961/2010. On that occasion, the Council sent the applicant a copy of Decision 2011/299 and Implementing Regulation No 503/2011 (together, ‘the 2011 acts’) and gave the applicant until 31 July 2011 to request a review of its inclusion on those lists. The Council also informed the applicant of the possibility of bringing proceedings for annulment of the 2011 acts before the General Court of the European Union, in accordance with the second paragraph of Article 275 TFEU and the fourth and sixth paragraphs of Article 263 TFEU.
17 By letter of 13 July 2011, the applicant submitted its observations to the Council.
18 By letter of 5 December 2011, the Council informed the applicant of the decision to maintain its name on the lists of persons and entities subject to restrictive measures set out in Annex II to Decision 2010/413 and Annex VIII to Regulation No 961/2010, and again sent it a copy of the 2011 acts concerning the applicant. The Council also reminded the applicant of the possibility of bringing proceedings for annulment of the 2011 acts before the General Court of the European Union, in accordance with the second paragraph of Article 275 TFEU and the fourth and sixth paragraphs of Article 263 TFEU.
19 By letter from the Council of 11 December 2012, the applicant was informed that its name had been included on the list set out in Annex IX to Regulation No 267/2012, as a result of the repeal of Regulation No 961/2010. With that letter, the Council sent the applicant a copy of Decision 2010/413 and Regulation No 267/2012 and informed it that the deadline for requesting a review of its inclusion on the lists at issue had been set as 31 January 2013.
20 By letter of 20 August 2013, the applicant submitted its observations to the Council.
21 By letter of 14 March 2014, the Council informed the applicant, first, that it had reviewed the applicant’s inclusion in the lists at issue, having regard to the observations submitted by the applicant in its letter of 20 August 2013; second, that, following that review, its name had been maintained on the lists in question; and, third, that if the applicant had new or further observations, these were to be submitted before 15 April 2014. The applicant did not submit observations within the prescribed period.
22 On 13 October 2017, the applicant submitted to the Council a petition for the removal of its name from the lists at issue. That petition was based on the fact that, as was apparent from its internal organisation, its activities, the projects it carried out and the identities of its main clients, the applicant had no connections with entities active in the nuclear sector and did not provide services to that sector. In particular, the applicant alleged that, since its provision of services to Kalaye Electric Company (KEC) in June 2006, it had been implementing a strict policy of rejecting any potential partner or client that was subject to United Nations sanctions or EU restrictive measures. That much could be seen from the list of projects that it had carried out in the preceding five years (see letter of 13 October 2017, paragraphs 1 to 32). Moreover, the petition was based on the fact that, in so far as the JCPOA had permitted the continuation of activities at the uranium enrichment plant at Natanz, the Council’s main concern, which was about the location of activities which the applicant had carried out for KEC in 2006, had been removed (see letter of 13 October 2017, paragraph 33). Last, the applicant emphasised that the continuation of the restrictive measures against it not only had caused it considerable losses in terms of turnover and commercial opportunities but was also contrary to the spirit of cooperation referred to in the text of the JCPOA.
Decision to maintain the applicant’s name on the lists at issue
23 By letter of 6 June 2018, the Council replied to the letter of 13 October 2017 (see paragraph 22 above), stating the following:
‘[Neda Industrial Group] should remain on the list of designated persons and entities [and] the continuation of the restrictive measures against Neda Industrial Group is in accordance with the 2015 Joint Comprehensive Plan of Action (JCPOA) with Iran, as endorsed by UN Security Council Resolution 2231 (2015).’
24 Moreover, in its letter of 6 June 2018, the Council referred to its Decision (CFSP) 2018/833 of 4 June 2018 amending Decision 2010/413 (OJ 2018 L 140, p. 87), and to Council Implementing Regulation (EU) 2018/827 of 4 June 2018 implementing Regulation No 267/2012 (OJ 2018 L 140, p. 3) (together, ‘the 2018 acts’).
25 Decision 2018/833 was adopted in accordance with Article 26(3) of Decision 2010/413, as amended by Council Decision 2012/35/CFSP of 23 January 2012 (OJ 2012 L 19 p. 22), and Implementing Regulation 2018/827 was adopted in accordance with Article 46(7) of Regulation No 267/2012, as amended by Regulation 2015/1861. Those provisions require the Council to conduct an annual review of the lists at issue.
26 By the 2018 acts, the Council updated the lists at issue without, however, removing the applicant’s name from them. The criterion at issue (see paragraphs 9 and 10 above) and the reasons justifying the restrictive measures against the applicant (see paragraph 15 above) remained, therefore, implicitly but necessarily unchanged.
Procedure and forms of order sought
27 By application lodged at the General Court Registry on 16 August 2018, the applicant brought an action for annulment of the Council’s decision to maintain the applicant’s name on the lists at issue.
28 On 5 and 12 September 2018, the applicant was invited by the Court Registry to regularise its application, in particular so as precisely to identify the acts forming the subject matter of its action and to produce them to the Court.
29 On 24 September 2018, the applicant lodged a letter at the Court Registry, explaining that the action which it had brought was for annulment of the Council’s decision contained in the letter of 6 June 2018 to maintain its name on the lists at issue.
30 On 7 December 2018, the Council lodged its defence.
31 By a measure of organisation of procedure, adopted on 19 December 2018 in accordance with Articles 89 and 90 of the Rules of Procedure of the General Court, the parties were invited to answer a question.
32 The Council and the applicant replied, respectively, on 15 and 16 January 2019.
33 On 25 March 2019 the applicant lodged its reply and on 8 May 2019 the Council lodged its rejoinder.
34 On 7 June 2019, the applicant requested that a hearing be held.
35 As a result of changes in the composition of the Chambers of the General Court pursuant to Article 27(5) of the Rules of Procedure, the Judge-Rapporteur was assigned to the Fourth Chamber, to which the present case was accordingly allocated.
36 The applicant claims that the Court should:
– ‘cancel the decision taken by the Council on 6 June 2018 to maintain the sanctions against the applicant’;
– order the Council to pay the costs.
37 The Council contends that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
Law
Preliminary observations on the subject matter of the proceedings
38 It must be noted that, in the application, the applicant identifies as acts forming the subject matter of the action the Council’s letter of 6 June 2018, as well as Annex IX to Regulation No 267/2012 and Annex II to Decision 2010/413, in so far as those acts concern it.
39 In response to a request from the Court for the applicant to produce, in addition to the letter from the Council of 6 June 2018, the acts forming the subject matter of the action, the applicant produced, on 24 September 2018, Regulation No 267/2012 and Decision 2010/413 as amended by Decision 2011/299. It also explained that, by its action, it sought annulment of the Council’s decision contained in the letter of 6 June 2018 to maintain its name on the lists at issue.
40 In the defence, lodged at the Court Registry on 7 December 2018, the Council did not raise any plea of inadmissibility but put forward a defence on the substance of the action.
41 By a measure of organisation of procedure adopted on 19 December 2018, in accordance with Articles 89 and 90 of the Rules of Procedure, the parties were invited to answer the question as to whether the Council’s letter of 6 June 2018 was an act which may be the subject of an action for annulment, for the purposes of Article 263 TFEU. In addition, the applicant was requested to indicate to the Court any other acts, apart from the Council’s letter of 6 June 2018, which formed the subject matter of its action and the paragraphs of the application in which those various acts were referred to.
42 By letter of 15 January 2019, the Council replied to the Court that the action had to be regarded as relating to the 2018 acts mentioned in its letter of 6 June 2018 and not to that letter as such.
43 By letter of 16 January 2019, the applicant replied to the Court, first, that its action had to be interpreted as covering the decision of the Council contained in the letter of 6 June 2018. In this respect, it stated that the letter was neither ‘purely informative’ nor ‘confirmation’ of the Council’s decision to include the applicant on the lists at issue. Second, the applicant indicated that the letter in question had in any event to be seen as a challengeable act in that it represented, in essence, the Council’s refusal to withdraw the applicant from the lists at issue. Third, the applicant argued that, in accordance with the case-law (judgment of 11 December 2012, Sina Bank v Council, T‑15/11, EU:T:2012:661, paragraphs 34 and 37), the content of the letter of 6 June 2018, interpreted in its context, was such that that letter could be categorised as a decision to maintain the applicant’s name on the lists at issue, thus rendering the letter capable of being the subject of an action for annulment for the purposes of Article 263 TFEU. Last, in its conclusions in its response of 16 January 2019, the applicant stated in particular that the subject matter of the action was, ‘without any ambiguity’, the annulment of the ‘letter of 6 June 2018, Regulation … No 267/2012 and … Decision [2010/413] as amended and supplemented up to the date of the application, in so far as they concern[ed] the applicant’, as produced to the Court with the document lodged at the Court Registry on 24 September 2018.
44 In reply to a question put by the Court during the hearing, the applicant stated, as has been recorded in the minutes, that the subject matter of the action was not only the letter of 6 June 2018 but also the 2018 acts referred to in that letter, in so far as those acts contained the Council’s decision to maintain the applicant’s name on the lists at issue. In addition, again during the hearing, and as has been recorded in the minutes, the applicant stated that its action was not intended to seek annulment of acts prior to those of 2018 by which the Council had first included its name and subsequently maintained it.
45 As regards identification of the acts that form the subject matter of the proceedings, the following observations must be made.
46 In the first place, in so far as the applicant’s action seeks cancellation of the Council’s letter of 6 June 2018, it must be recalled that it has been consistently held that any measure the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his or her legal position is an act or a decision which may be the subject of an action for annulment under Article 263 TFEU. Moreover, it has been held that a measure of a purely informative character can neither affect the interests of the addressee nor change his or her legal position compared with the situation prior to receipt of that measure (see judgment of 3 July 2014, Alchaar v Council, T‑203/12, not published, EU:T:2014:602, paragraph 58 and the case-law cited).
47 In the present case, the Council informed the applicant, by the letter of 6 June 2018, of the adoption of the 2018 acts maintaining the applicant’s name on the lists at issue. The Council stated in that regard, first, that the observations in the letter of 13 October 2017 had not altered its view and, second, that the retention of the applicant’s name on the lists at issue continued to be in accordance with the JCPOA, contrary to what was maintained by the applicant in those observations (see paragraphs 23 to 26 above).
48 The letter of 6 June 2018 does not constitute an act adopted following a formal review of the restrictive measures against the applicant pursuant to Article 24(3) of Decision 2010/413 and Article 46(5) of Regulation No 267/2012, according to which, where new evidence or where observations are submitted by the parties concerned, the Council is required to conduct a review of the restrictive measures and to communicate the reasons for its decision to the persons concerned. In fact, the letter merely informs the applicant that its name is to be maintained on the lists at issue following the adoption of the 2018 acts which update those lists. The lists are generally updated in connection with the annual review of restrictive measures, carried out in accordance with Article 26(3) of Decision 2010/413 and with Article 46(7) of Regulation No 267/2012, as a result of the amendment of that article by Regulation 2015/1861.
49 The letter of 6 June 2018, which is purely informative, is not, therefore, capable of being the subject of an action for annulment under Article 263 TFEU. It follows that the action must be declared inadmissible in so far as it relates to the letter of 6 June 2018.
50 In the second place, the Court must assess whether the object of the 2018 acts was to maintain the applicant’s name on the lists at issue and, in so far as it was, whether the action may be interpreted, as the Council contends in its observations in response to the measure of organisation of procedure (see paragraph 42 above) and as the applicant indicated in response to a question put during the hearing (see paragraph 44 above), as relating to those acts.
51 In that regard, it should be stated at the outset that the Council is required, under Article 26(3) of Decision 2010/413 and Article 46(7) of Regulation No 267/2012, to review the lists at issue at regular intervals and at least every 12 months, and that, in accordance with Article 26(3) of Decision 2010/413, the restrictive measures are to cease to apply in respect of the persons and entities concerned ‘if the Council determines, in accordance with the procedure referred to in Article 24 [of Decision 2010/413], that the conditions for their application are no longer met’.
52 In addition, it is apparent from the case-law that, even in a case in which the person concerned is not mentioned by a subsequent act amending the list on which his or her name has been entered, and even if that subsequent act does not alter the ground on which that person’s name was initially entered on the list, such an act must be understood as evidence of the Council’s intention to maintain the name of the person concerned on the list, which has the consequence that his or her funds remain frozen, given that the Council has a duty to examine that list at regular intervals (see judgment of 9 July 2014, Al-Tabbaa v Council, T‑329/12 and T‑74/13, not published, EU:T:2014:622, paragraph 44 and the case-law cited).
53 It has, moreover, been held that identification of the contested measure cannot always depend on a strictly literal reading of the form of order sought, if the right to effective judicial protection is not to be infringed (see, to that effect, judgment of 28 June 2018, Spliethoff’s Bevrachtingskantoor v Commission, C‑635/16 P, EU:C:2018:510, paragraphs 70 to 72). The contested measure can be identified by implication from the statements and from the whole argument set out in the application. It has also been held that an application formally brought against a decision which is part of a group of decisions forming a whole could be regarded as directed also, so far as necessary, against the others (see judgment of 13 October 2015, Commission v Verile and Gjergji, T‑104/14 P, EU:T:2015:776, paragraph 108 and the case-law cited).
54 In the present case, the Council communicated the 2018 acts to the applicant by its letter of 6 June 2018. It is apparent from the wording of those acts that they were adopted under Article 26(3) of Decision 2010/413 and Article 46(7) of Regulation No 267/2012 (see paragraph 25 above) and that they lay down the amendments to be made to the lists at issue without mentioning the applicant’s name. According to the case-law referred to in paragraph 52 above, it is the absence of a reference to the applicant’s name in the 2018 acts that leads to that name being maintained on the lists at issue.
55 Next, it must be noted that the Council is itself of the view that the applicant’s action should be interpreted as relating to the 2018 acts, which are mentioned in the letter of 6 June 2018 (see paragraph 42 above). In its observations of 15 January 2019 in response to a measure of organisation of procedure, it emphasises that it is evident from the expressions used by the applicant on the first and last pages of the application that the applicant seeks cancellation of the ‘decision taken by the Council on 6 June 2018 to maintain the sanctions against the applicant’. According to the Council, the only ‘decision’ to maintain sanctions against the applicant adopted in June 2018 is the decision implicitly contained in the 2018 acts.
56 Last, it must be borne in mind that, on 16 January 2019, in its response to the measure of organisation of procedure mentioned in paragraph 31 above, the applicant indicated in particular to the Court that the subject matter of the action was Regulation No 267/2012 and Decision 2010/413 ‘as amended and supplemented up to the date of the application’, in so far as they concerned the applicant (see paragraph 43 above). Moreover, on being questioned by the Court during the hearing, the applicant confirmed that its action should be interpreted as relating to the 2018 acts.
57 In so far as the 2018 acts amend Regulation No 267/2012 and Decision 2010/413 prior to the date on which the action was brought, in that they update the lists at issue contained in the latter acts, and in so far as the 2018 acts are those which were communicated to the applicant in the Council’s letter of 6 June 2018, in response to the applicant’s submissions requesting the removal of its name from the lists at issue, the action must be interpreted as relating, in essence, to the annulment of the 2018 acts, which incorporate the Council’s decision to maintain the applicant’s name on the lists at issue.
58 Given that the action was lodged at the Court Registry on 16 August 2018 and the 2018 acts were communicated to the applicant on 6 June 2018, it must be held that the action was brought within the time limit laid down in Article 263 TFEU, that is to say, within two months of notification of the retention of the applicant’s name on the lists at issue, extended on account of distance by the period of 10 days provided for in Article 60 of the Rules of Procedure.
59 In the light of all of the foregoing considerations, the action must be dismissed as inadmissible to the extent that it relates to the letter of 6 June 2018, and declared admissible to the extent that it is to be interpreted as being directed against the 2018 acts, in so far as those acts concern the applicant.
Substance
60 The applicant puts forward three pleas in law in support of the action. The first plea alleges that the decision to maintain its name on the lists at issue is vitiated by errors of law. The second plea alleges that the decision is vitiated by errors of assessment. The third plea alleges that the decision breaches the principle of proportionality.
61 In the context of the first plea, alleging that the decision to maintain the applicant’s name on the lists at issue is vitiated by errors of law, the applicant puts forward a number of arguments. First, it claims that the Council failed to demonstrate, in accordance with paragraphs 80, 81 and 83 of the judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft (C‑348/12 P, EU:C:2013:776), and paragraph 85 of the judgment of 14 September 2016, National Iranian Tanker Company v Council (T‑207/15, not published, EU:T:2016:471), the ‘quantitative or qualitative’ significance of the support it is alleged to have provided for the development of nuclear proliferation. Second, the applicant alleges that the grounds for including it on the lists at issue are not supported by any demonstration or supporting evidence. In other words, the Council’s decision to maintain the applicant’s name on the lists at issue was not taken on a sufficiently solid factual basis, as is required by paragraphs 42 and 43 of the judgment of 22 September 2015, First Islamic Investment Bank v Council (T‑161/13, EU:T:2015:667), one that existed at the time the decision was adopted. Third, the list of persons and entities subject to restrictive measures ‘did not conform to the principle of effective judicial protection’ and did not therefore comply with paragraph 349 of the judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, EU:C:2008:461). Fourth, the applicant maintains that the reasons put forward by the Council to justify the applicant’s inclusion on the lists at issue are vague. Fifth, the statement of reasons for maintaining the applicant’s listing, contained in the letter of 6 June 2018, was clearly insufficient since, in response to the arguments relied on in the applicant’s observations in the letter of 13 October 2017, the Council merely stated that those observations had not altered its view.
62 In the context of the second plea, alleging errors of assessment, the applicant argues that there is no basis for maintaining its name on the lists at issue. In that regard, it submits, first, that the ground for its listing, namely that it worked for a sanctioned entity, is incorrect. In fact it had provided services to KEC at a time when that company was not yet subject to United Nations sanctions. Second, it had not been demonstrated that the applicant had provided quantitatively or qualitatively significant support for the nuclear proliferation-sensitive activities of the Islamic Republic of Iran. Third, the applicant states that it is not related to any sanctioned entities or nuclear activities. Fourth, since the JCPOA had permitted the continuation of activities at the plant at Natanz, the main concern, which was about the location of the activities which it had carried out in 2006, had been removed.
63 In the context of the third plea, the applicant maintains, in the first place, that the policy pursued by the European Union’s application of restrictive measures against the Islamic Republic of Iran is contrary to EU law and cannot, moreover, derive any legitimacy from the principles of the United Nations Organisation. In the second place, the restrictive measures maintained against the applicant for eight years are neither appropriate nor necessary for attaining the objectives pursued by the Council, which are the preservation of international peace and security.
64 As a preliminary point, it must be noted that the issue of the grounds for the contested acts is different from that of the evidence of the conduct of which the applicant is accused, namely, the facts set out in those acts and the treatment of those facts as constituting support for nuclear proliferation in accordance with the criterion at issue applied (see, to that effect, judgment of 16 November 2011, Bank Melli Iran v Council, C‑548/09 P, EU:C:2011:735, paragraph 88).
65 The obligation to state reasons on which an act is based is an essential procedural requirement, to be distinguished from the question whether the reasons given are correct, which goes to the substantive legality of the contested act. The reasoning on which an act is based consists in a formal statement of the grounds on which that act is based. If those grounds are vitiated by errors of law or of fact, 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, to that effect, judgment of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraph 96 and the case-law cited).
66 It must be observed that, in the context of the first plea in law in the action, alleging that the retention of its name on the lists at issue is vitiated by errors of law, the applicant also raises arguments to the effect that the Council made errors of assessment and infringed essential procedural requirements. In the context of the first plea, the applicant submits, first, that the Council misinterpreted the criterion at issue (error of law); second, that the Council did not proceed on a sufficiently solid factual basis, one that existed at the time the 2018 acts were adopted (error of assessment); and, third, that the statement of reasons for maintaining the applicant’s name on the lists at issue is insufficient, which means that the continuation of the listing is vitiated by an infringement of essential procedural requirements. Last, by its second and third pleas, the applicant raises, in essence, errors of assessment.
67 In the light of the considerations set out in paragraphs 64 and 65 above, it is appropriate to address separately the applicant’s claims regarding an infringement of essential procedural requirements (external legality) and the claims challenging the substance of the grounds for the 2018 acts (internal legality), irrespective of the pleas in connection with which those claims are advanced.
68 On that basis, the Court considers it useful to examine, first, the applicant’s arguments that the 2018 acts are vitiated by an infringement of the obligation to state reasons; second, the applicant’s arguments that those acts are vitiated by errors of law; and, third, the applicant’s arguments that those acts are vitiated by errors of assessment.
Infringement of the obligation to state reasons
69 In the context of the first plea in law, the applicant puts forward, in particular, arguments to support its claim that the grounds for including its name on the lists at issue are vague and that the statement of reasons for maintaining its name on those lists, contained in the Council’s letter of 6 June 2018, are insufficient. More specifically, according to the applicant, in the letter of 6 June 2018, the Council was not entitled to confine itself to stating that the observations which the applicant had set out in its letter of 13 October 2017 (see paragraph 22 above) had not altered the Council’s view.
70 The Council disputes the applicant’s arguments.
71 As regards the obligation to state the reasons for an act adversely affecting a person, as provided for by the second paragraph of Article 296 TFEU and, more particularly in the present case, Article 24(3) of Decision 2010/413 and Article 46(3) of Regulation No 267/2012, it should be noted that its purpose is, first, to provide the person concerned with sufficient information to make it possible to determine whether the act is well founded or whether it is vitiated by an error which may permit its validity to be contested before the Courts of the European Union and, second, to enable those Courts to review the lawfulness of the act. The obligation to state reasons thus laid down constitutes an essential principle of EU law which may be derogated from only for overriding reasons. The statement of reasons must therefore in principle be notified to the person concerned at the same time as the act adversely affecting him or her, and a failure to state the reasons cannot be remedied by the fact that the person concerned learns the reasons for the act during the proceedings before the Courts of the European Union (see, to that effect, judgments of 7 December 2011, HTTS v Council, T‑562/10, EU:T:2011:716, paragraph 32, and of 21 March 2012, Fulmen and Mahmoudian v Council, T‑439/10 and T‑440/10, EU:T:2012:142, paragraph 48 and the case-law cited).
72 Unless, therefore, overriding considerations pertaining to the security of the European Union or of its Member States or to the conduct of their international relations militate against the communication of certain matters, the Council is bound, by virtue of the provisions referred to in paragraph 71 above, to apprise the entity concerned by a measure adopted under Article 20(1)(b) of Decision 2010/413 and Article 23(2) of Regulation No 267/2012 of the actual specific reasons why the Council considers those provisions to be applicable to that entity. The Council must therefore state the facts and points of law on which the legal justification of the measure depend and the considerations which led the Council to adopt it (see judgment of 21 March 2012, Fulmen and Mahmoudian v Council, T‑439/10 and T‑440/10, EU:T:2012:142, paragraph 49 and the case-law cited).
73 Moreover, the statement of reasons must be appropriate to the measure at issue and to 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 statement of reasons to specify 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. In particular, 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 that person to understand the scope of the measure concerning him or her (judgment of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 54; see also, to that effect, judgment of 16 November 2011, Bank Melli Iran v Council, C‑548/09 P, EU:C:2011:735, paragraphs 76, 86 and 87).
74 Therefore, the statement of reasons for an act of the Council which imposes a restrictive measure must identify not only the legal basis of that measure but also the actual and specific reasons why the Council considers, in the exercise of its discretion, that that measure must be adopted in respect of the person concerned (judgments of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 52, and of 25 March 2015, Central Bank of Iran v Council, T‑563/12, EU:T:2015:187, paragraph 55).
75 Furthermore, when comments are made by the individual concerned on the summary of reasons, the competent EU authority is under an obligation to examine, carefully and impartially, whether the alleged reasons are well founded, in the light of those comments and any exculpatory evidence provided with those comments (judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 114).
76 Last, without going so far as to require a detailed response to the comments made by the individual concerned, the obligation to state reasons laid down in Article 296 TFEU means in all circumstances that the institution concerned must identify the individual, specific and concrete reasons why it is considered that the individual concerned must be subject to restrictive measures (judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 116).
77 It is in the light of that case-law that the Court must examine the applicant’s arguments as recalled in paragraph 69 above.
78 In that regard, in order to assess compliance with the obligation to state reasons and the obligation to notify the entity concerned of the evidence against it, it is necessary to take into account not only the reasons given in the 2018 acts but also the context of those acts (see paragraph 73 above).
79 In the present case it is necessary to ascertain, first, whether, having regard to the factual and legal context in which the 2018 acts were adopted, the applicant was in a position to understand the reasons for the retention of its name on the lists at issue and the criterion applied by the Council to justify that retention. Second, the Court must assess whether the applicant was put in a position to verify whether the statement of reasons for the decision to maintain its name on the lists at issue was well founded and to defend itself before the Court, and whether the Court is able to exercise its power of review.
80 First, it must be borne in mind that the 2018 acts were adopted in accordance with the provisions of Article 26(3) of Decision 2010/413 and the provisions of Article 46(7) of Regulation No 267/2012, according to which the Council is required to review the lists at issue at regular intervals and at least every 12 months (see paragraph 25 above). Those provisions therefore establish the principle that the Council is required to carry out a review and to periodically update the lists of persons and entities subject to restrictive measures.
81 The review of the situation of persons or entities included on the lists at issue may be completed otherwise than by the adoption of a formal act containing an express decision to maintain the name of the person or entity concerned on the lists in question. Thus, as is recalled in paragraph 52 above, the Courts of the European Union have made clear that even in a case in which the person concerned is not mentioned by name by a subsequent act amending the list on which that person’s name has been entered, and even if that subsequent act does not alter the ground on which that person’s name was initially entered on the list, such an act must be understood as evidence of the Council’s intention to maintain the applicant’s name on the list, which has the consequence that its funds remain frozen, given that the Council has a duty to examine that list at regular intervals (see judgment of 9 July 2014, Al-Tabbaa v Council, T‑329/12 and T‑74/13, not published, EU:T:2014:622, paragraph 44 and the case-law cited).
82 Second, it must be noted that, in its letter of 6 June 2018, the Council not only stated that the applicant’s observations in the letter of 13 October 2017 had not altered the Council’s view and that the retention of the applicant’s name on the lists at issue was in accordance with the JCPOA (see paragraph 23 above), but it also communicated to the applicant the 2018 acts (see paragraph 24 above), which were adopted in accordance with the provisions mentioned in paragraph 80 above.
83 Thus, it is possible to establish from the Council’s letter of 6 June 2018, informing the applicant of the adoption of the 2018 acts, that the wording of the reasons for the inclusion of the applicant’s name on the lists at issue was not amended or updated by the Council when it adopted those acts.
84 In this respect, it must be pointed out that the Council had informed the applicant, by the letters of 24 May 2011 and 11 December 2012, that, pursuant to Article 20(1)(b) of Decision 2010/413 and Article 23(2) of Regulation No 267/2012, the applicant’s name had been entered on the lists at issue. Those provisions prescribe, in particular, the freezing of the funds of ‘persons and entities … that are engaged in, directly associated with, or providing support for [nuclear proliferation]’.
85 In addition, it must be recalled that the ground relied on by the Council to justify freezing the applicant’s funds remained as follows in the 2018 acts:
‘Industrial automation company that has worked for the [United Nations]-sanctioned Kalaye Electric Company (KEC) at the uranium fuel enrichment plant at Natanz.’
86 It follows from the foregoing that the applicant’s name was included and maintained on the lists at issue on a legal basis that relates to the listing criteria referred to in paragraphs 9 and 10 above. Moreover, that listing states the actual and specific reasons why the Council considered, in the exercise of its discretion, that the applicant should continue to be subject to restrictive measures. Last, the context in which the 2018 acts were adopted, namely the annual review of restrictive measures adopted to prevent nuclear proliferation in Iran and the existence of the JCPOA, was also known to the applicant, since the applicant itself makes reference to it in its letter of 13 October 2017.
87 Having regard to the provisions recalled in paragraph 80 above and to the case-law cited in paragraphs 52 and 81 above, the applicant was in a position to understand, first, that the absence of a reference to its name in the 2018 acts led to its retention on the lists at issue and, second, that the reasons for its listing remained unaltered. The 2018 acts lay down, in the context of the annual review of restrictive measures which the Council is required to undertake, the changes to be made to the lists at issue without mentioning the applicant’s name and without altering the reasons for its listing.
88 In the light of the — unchanged — wording of the reasons for the applicant’s inclusion on the lists at issue, the legal basis of the 2018 acts which relates to the listing criteria recalled in paragraphs 9 and 10 above, and the factual and legal context in which the restrictive measures against the applicant were maintained, the applicant was therefore in a position to challenge effectively the justification for maintaining the restrictive measures adopted in its case. That is, moreover, what the applicant did when it claimed that the entry of its name was vitiated by errors of law and of fact.
89 Consequently, it must be concluded that, in the light of the context in which the applicant’s name was maintained on the lists at issue, the — unchanged — wording of the reasons for the inclusion of the applicant’s name on those lists, and the body of relevant legal rules and the case-law set out in paragraphs 71 to 76 above, the 2018 acts are sufficiently reasoned to enable the applicant to challenge the validity, and the Court to review the lawfulness, of those acts.
90 Accordingly, the arguments relating to infringement of the obligation to state reasons referred to in paragraph 69 above must be rejected.
Errors of law
91 The applicant submits, by the first part of the first plea, that the Council included it on the lists at issue without complying with the conditions established by case-law for considering the criterion at issue, alleging support for nuclear proliferation in Iran, to be satisfied. In that respect, the applicant refers to paragraphs 80, 81 and 83 of the judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft (C‑348/12 P, EU:C:2013:776), and to paragraph 85 of the judgment of 14 September 2016, National Iranian Tanker Company v Council (T‑207/15, not published, EU:T:2016:471), in order to argue that, according to the case-law, the application of that criterion requires that the Council demonstrate the ‘quantitative or qualitative’ significance of the support for nuclear proliferation in Iran. In addition, the applicant refers to paragraphs 81and 83 of the judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft (C‑348/12 P, EU:C:2013:776) in order to argue that the criterion at issue requires that the Council demonstrate the existence of ‘intentional support’ that is ‘capable, by its quantitative or qualitative significance’, of encouraging the development of nuclear proliferation in Iran. Last, it refers to paragraphs 42 and 43 of the judgment of 22 September 2015, First Islamic Investment Bank v Council (T‑161/13, EU:T:2015:667) in order to argue that the criterion at issue requires, according to the case-law, that the Council demonstrate that the activities carried out by the person or entity targeted by the restrictive measures are intended for the nuclear industry sector.
92 The Council disputes the applicant’s arguments.
93 As a preliminary point, it must be borne in mind that the applicant’s name was initially entered and maintained on the lists at issue on the basis of Article 20(1)(b) of Decision 2010/413 and, in virtually identical terms, on the basis of Article 23(2)(a) of Regulation No 267/2012.
94 Article 20(1)(b) of Decision 2010/413 provides that the funds and economic resources of persons and entities that are ‘engaged in, directly associated with, or providing support for, Iran’s proliferation-sensitive nuclear activities or for the development of nuclear weapon delivery systems, including through the involvement in procurement of the prohibited items, goods, equipment, materials and technology, or persons or entities acting on their behalf or at their direction, or entities owned or controlled by them, including through illicit means’, are to be frozen.
95 The Council stated that the criterion on the basis of which the applicant’s name was included and then maintained on the lists at issue is that of the provision of support for the proliferation-sensitive nuclear activities of the Islamic Republic of Iran.
96 In the first place, it should be noted that, as the Council correctly contends, paragraph 85 of the judgment of 14 September 2016, National Iranian Tanker Company v Council (T‑207/15, not published, EU:T:2016:471) concerns the application of a different criterion laid down in Article 20(1)(c) of Decision 2010/413 and Article 23(2)(d) of Regulation No 267/2012. That criterion is to be construed as being aimed at any support which, although having no direct or indirect connection with the development of nuclear proliferation, is nonetheless capable, by its quantitative or qualitative significance, of encouraging such development, by providing the Government of Iran with resources or facilities of a material, financial or logistical nature which allow it to pursue nuclear proliferation activities. It is in the light of the latter criterion that the Courts of the European Union specified that it does not cover all forms of support to the Government of Iran but only those forms of support which, by reason of their quantitative or qualitative significance, could contribute to the pursuit of Iran’s nuclear activities.
97 In addition, the Court of Justice, in paragraph 80 of the judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft (C‑348/12 P, EU:C:2013:776), cited by the applicant, held that the concept of ‘support’ implied a lesser degree of connection to Iran’s nuclear activities than ‘engagement’ or ‘direct association’, and that that concept was capable of covering the procurement of or trade in goods and technology linked to the gas and oil industry. In that judgment, the Court considered that trading in equipment for the gas and oil sector that could be used for Iran’s nuclear programme justified the entry of the entity concerned on the lists at issue, on the basis of the criterion of ‘support for Iran’s proliferation-sensitive nuclear activities’, without there being a need to demonstrate that such equipment had actually been sold to an Iranian nuclear facility (judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 85; see also, to that effect, judgment of 7 March 2017, Neka Novin v Council, T‑436/14, not published, EU:T:2017:142, paragraphs 29 to 31).
98 As the Council, in essence, contends, the situation examined by the Court of Justice in paragraph 80 of the judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft (C‑348/12 P, EU:C:2013:776) differed from that of the present case. In the abovementioned case, the Court examined the extent to which gas, oil and petrochemical activities, that is to say, activities outwith the nuclear sector, could be regarded as meeting the criterion relating to the provision of support for nuclear activities. By contrast, in the present case, since the retention of the applicant’s name on the lists at issue was based on the services it had provided to the uranium fuel enrichment plant at Natanz, that is to say, directly to the nuclear sector, the criterion relating to the provision of support for Iran’s proliferation-sensitive nuclear activities was a fortiori satisfied. In those circumstances, the Council was not required to prove the qualitative or quantitative significance of that support.
99 It follows from the foregoing that the Council cannot be criticised for having made an error of law because it failed to demonstrate the qualitative or quantitative significance of the applicant’s support for nuclear proliferation.
100 In the second place, the applicant submits, in essence, that the application of the criterion at issue requires that it be demonstrated that the person or entity subject to the restrictive measures provides ‘intentional support’ to the Iranian nuclear programme.
101 That line of argument is founded on a misinterpretation of the criterion at issue.
102 It is sufficient to note that it has been held that the criterion at issue is an objective criterion that is linked to the activities of the person targeted by the restrictive measures and does not include an element of intention (see, to that effect, judgment of 7 March 2017, Neka Novin v Council, T‑436/14, not published, EU:T:2017:142, paragraph 31).
103 It follows that the criterion at issue does not, contrary to what is claimed by the applicant, require that it be demonstrated that the person or entity targeted by the restrictive measures intends to be engaged in the Iranian nuclear programme.
104 Accordingly, it must be held that the Council did not err in law in finding that the criterion at issue did not require that, in order for the restrictive measures to be maintained, it had to be demonstrated that the person or entity targeted by those measures was providing intentional support to the Iranian nuclear programme.
105 In the light of the foregoing, the applicant’s arguments alleging errors of law must be rejected.
Errors of assessment
106 In the second part of the first plea, the applicant refers to paragraphs 42 and 43 of the judgment of 22 September 2015, First Islamic Investment Bank v Council (T‑161/13, EU:T:2015:667), in order to argue that the Council’s decision to maintain the applicant’s name on the lists at issue was not taken, as the case-law requires, on a sufficiently solid factual basis, one that existed at the time the decision was adopted. It adds that the listing grounds are not supported by any demonstration or supporting evidence.
107 In addition, the applicant argues, by its second plea, that the reasons given to justify the retention of its name on the lists at issue are founded on errors of fact.
108 In that regard, first, it observes that, at the time when it provided services to KEC, that company had not yet been sanctioned by the United Nations. Thus, the ground for listing, indicating that the applicant worked for a sanctioned entity, was incorrect and invalidated the Council’s decision to maintain its name on the lists at issue. The applicant adds that it could not have anticipated, six months earlier, that KEC would be sanctioned by the United Nations.
109 Second, the applicant highlights the fact that the Council did not establish the ‘quantitative or qualitative’ significance of the support that the applicant had provided to Iran’s proliferation-sensitive nuclear activities. Moreover, the value of the services provided by the applicant to KEC clearly excluded the possibility that those services could have had any kind of significance.
110 Third, the applicant maintains that it is not related either to sanctioned entities or to nuclear activities, as is clear from the nature of the services which it currently provides, which are primarily focused on industrial automation (see paragraph 1 above), the main projects which it has implemented and the identities of its main clients, namely oil, gas and electrical power companies of domestic and international reputation.
111 Fourth, the applicant submits that, since the JCPOA permitted the continuation of activities at the Natanz plant, the main concern, which was about the location of the activities which it had carried out in 2006, has been removed. There are therefore no longer any grounds to justify the Council’s decision to maintain its name on the lists at issue. The Council could not, therefore, justify the applicant’s continued listing by reference to a single operation consisting in the provision of services to KEC in Natanz in June 2006, that is to say, 1 year before the sanctions regime against Iran was first established by the European Union, 5 years before the Council decided to include the applicant’s name on the lists at issue and 12 years before the Council’s decision to maintain its name on those lists. According to the applicant, it is clear from the case-law that restrictive measures should be based on an appraisal of a present or future threat rather than on the evaluation of past conduct. A mere risk that the entity concerned might engage in, be associated with or provide support for prohibited activities in the future is not sufficient.
112 The Council disputes the applicant’s arguments.
113 The effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires in particular that the Courts of the European Union ensure that the decision by which restrictive measures were adopted or maintained, which affects the person or entity concerned 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, is substantiated (judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 119).
114 Furthermore, it must be noted that, when adopting subsequent acts affecting the same entity, the Council is required, in accordance with Article 24(4) and Article 26(3) of Decision 2010/413, to review at regular intervals and at least every 12 months the need to maintain those measures, in particular, in the light of observations submitted by that entity (see, to that effect, judgment of 5 February 2013, Bank Saderat Iran v Council, T‑494/10, EU:T:2013:59, paragraph 94).
115 In the present case, first, it must be observed that the applicant does not dispute having provided services to KEC in June 2006, or the fact that the provision of those services took place at Natanz. Accordingly, as the Council contends, the Council is not required to produce evidence of those facts which have been admitted by the applicant itself.
116 Second, the Court must assess whether the facts in question permit the inference that the retention of the applicant’s name on the lists at issue has a sufficiently solid factual basis and is therefore justified.
117 In the first place, as regards the applicant’s argument as set out in paragraph 108 above, it must be noted, as did the Council, that the point in time at which KEC was sanctioned by the United Nations and its name entered on the list of persons and entities subject to restrictive measures would have been relevant only if the applicant’s name had been included on the lists at issue on the basis of the criterion covering persons and entities who had assisted a designated person or entity in violating the restrictive measures of the European Union or the United Nations. Since the applicant’s name was not included on the lists at issue on the basis of that criterion but as a result of support for Iran’s nuclear activities, the fact that KEC was sanctioned by the United Nations after the applicant had provided services to the nuclear fuel enrichment plant at Natanz is not relevant to the assessment as to whether the applicant provided or is capable of providing support for nuclear proliferation.
118 Accordingly, the applicant’s argument that it provided services to KEC at a time when KEC had not yet been sanctioned by the United Nations does not support the conclusion that the applicant’s continued listing is vitiated by an error of assessment and must be rejected.
119 In the second place, as regards the applicant’s arguments as set out in paragraph 109 above, they are, as has been established in paragraphs 96 to 105 above, based on a misinterpretation and misapplication of the case-law. They are, therefore, unfounded. In other words, the Council did not make an error of assessment by failing to ascertain the ‘quantitative or qualitative’ significance of the applicant’s support for nuclear activities.
120 In the third place, the following observations must be made in respect of the applicant’s arguments as set out in paragraphs 110 and 111 above.
121 As a preliminary point, it must be recalled that the Council contests the applicant’s arguments and contends that, while the activities at the Natanz nuclear fuel enrichment plant were not forbidden by the JCPOA or Annex 1 thereto, they were made subject to very strict conditions and were continuously monitored by the International Atomic Energy Agency (IAEA), which attests to the fact that there continues to be a risk that Iran will engage, at that site, in proliferation-sensitive nuclear activities. In addition, the work carried out by the applicant at the uranium fuel enrichment plant at Natanz was done at a time when Iran’s nuclear activities were causing great concern to the international community. Moreover, the JCPOA distinguishes between restrictive measures to be lifted on Adoption Day (18 October 2015), on Implementation Day (16 January 2016), on Transition Day (in 2023) and on Termination Day (in 2025). Furthermore, the JCPOA establishes that the applicant’s name is not on the list of persons and entities which were delisted on Implementation Day, 16 January 2016. Accordingly, the retention of the applicant’s name on the lists at issue by the 2018 acts was consistent with the JCPOA and supported by a valid legal ground.
122 It must also be stated that, under Article 24(4) of Decision 2010/413 and Article 46(5) of Regulation No 267/2012, where new evidence or observations are submitted by the persons concerned, the Council is required to carry out a review of the restrictive measures and to notify the persons concerned of the reasons for its decision.
123 Principally, first of all, it must be noted that, for the purpose of entering the applicant’s name on the lists at issue, the Council relied on the operation which the applicant carried out for KEC, in June 2006, at the uranium fuel enrichment plant at Natanz.
124 Next, it must be observed that the decision to maintain the restrictive measures against the applicant was taken in 2018, that is to say, as the applicant emphasises, 12 years after the provision of services for the benefit of KEC at Natanz in 2006. As regards the years that elapsed between the listing of its name and the adoption of the 2018 acts, the applicant submits, without being challenged by the Council in that respect, that it is apparent from the nature of the services which it currently provides, the main projects which it has implemented and the identities of its main clients for the years 2014-2015, 2015-2016 and 2016-2017, that it does not provide services in the nuclear sector.
125 It is, moreover, common ground that the activities at the Natanz plant were not prohibited by the JCPOA or Annex I thereto. Those activities were subject to very strict conditions and to continuous monitoring by the IAEA. In that regard, paragraph 48.2 of Annex I to the JCPOA states that ‘[Iran will remove] … electrical cabling, individual cascade control cabinets, vacuum pumps and centrifuge mounting blocks’ and that ‘these excess centrifuges and infrastructure will be stored at Natanz in Hall B of [the Fuel Enrichment Plant] under IAEA continuous monitoring’. In addition, paragraph 71 of Annex I states that ‘Iran will permit the IAEA regular access, including daily access as requested by the IAEA, to relevant buildings at Natanz, including all parts of the [Fuel Enrichment Plant] and [Pilot Fuel Enrichment Plant], for 15 years’.
126 Last, it should be noted that the applicant asserts, without being contradicted in that respect by the Council, that the reports issued by the IAEA since 16 January 2016 confirm that, at the date of the adoption of the 2018 acts, Iran was abiding by its enhanced commitments under the JCPOA and that its nuclear programme was exclusively peaceful.
127 The circumstances referred to in paragraphs 123 to 126 above were such that the Council was obliged to examine, in accordance with the provisions mentioned in paragraph 122 above, whether the grounds that had justified the entry of the applicant’s name on the lists at issue remained valid and justified maintaining that listing, having regard to the risk that the applicant was then providing, and would in the future provide, support for nuclear proliferation in Iran.
128 First, to justify maintaining the applicant on the lists at issue, the Council merely recalled the operation carried out by the applicant at the uranium fuel enrichment plant at Natanz in 2006. Moreover, in its letter of 6 June 2018, the Council replied to the observations of the applicant contained in the letter of 13 October 2017 by stating that the retention of the applicant’s name on the lists at issue was in accordance with the JCPOA. In that regard, the Council made clear, in the written pleadings which it put before the Court, that it was apparent from paragraph 16.3 of Annex V to the JCPOA that the persons and entities whose names had been removed from the lists at issue on Implementation Day, that is 16 January 2016, were mentioned in Attachment 1 to Annex II to the JCPOA. Since the applicant was not among them, its name would therefore have been maintained on the lists at issue in accordance with the JCPOA.
129 Second, it must be noted that, in the 2018 acts and in the letter of 6 June 2018, the Council merely referred to the JCPOA and did not respond to the applicant’s arguments relating to the passage of time and, in particular, the long period of time between the single provision of services which it is accused of having provided to KEC in June 2006 and the retention of its name by the 2018 acts. The Council did not, moreover, take into consideration the fact that it would be apparent from the nature of the services now provided by the applicant, focused on industrial automation (see paragraph 1 above), the main projects which it implemented and the identities of its main clients, namely oil, gas and electrical power companies of national and international reputation, that it is no longer related to the sanctioned entities, nor does it provide services in the nuclear sector. Thus, in the absence of an express view of the Council on the arguments advanced by the applicant, and given that it merely noted that the applicant’s name did not appear on the list of persons and entities which, according to the JCPOA, were to be removed from the lists at issue on 16 January 2016, it must be held that the Council did not properly verify the need to maintain the restrictive measures against the applicant.
130 Admittedly, Resolution 2231 (2015) called for the immediate implementation of the JCPOA on the timetable established in the JCPOA. However, the requirement to adhere to the timetable in question did not relieve the Council of its obligation, when reviewing the lists at issue, to examine, in concreto, whether the grounds that had justified the inclusion of a person’s or entity’s name on the lists at issue remained valid and justified maintaining that listing, by providing specific information in that respect in the acts adopted in accordance with the provisions referred to in paragraph 122 above.
131 Third, as has been stated in paragraph 126 above, the Council did not dispute that, according to the reports issued by the IAEA since 16 January 2016, at the time when the 2018 acts were adopted, the Islamic Republic of Iran was abiding by its enhanced commitments under the JCPOA and its nuclear programme was exclusively peaceful. In that context, the Council could not simply claim that the absence of complete confidence in the nuclear programme of the Islamic Republic of Iran being exclusively peaceful and the decision that the IAEA should closely monitor that country’s nuclear activities justified the continuation of the measures taken against the applicant until 2023, provided that the Islamic Republic of Iran continued to comply with its obligations under the JCPOA. The Council should have assessed and specified in particular the evidence from which it could be inferred that there was, at the time when the applicant’s name was maintained on the lists at issue, a reasonable risk of the applicant providing support for nuclear proliferation in Iran, in order to justify maintaining restrictive measures against the applicant.
132 In those circumstances, the Court must uphold the second part of the first plea in law and the second plea in law, by which it is alleged that the Council did not proceed on a sufficiently solid basis when it adopted the 2018 acts. It must be held that the Council did not properly examine whether, at the time when the 2018 acts were adopted, there was any direct or indirect link between the applicant’s activities and nuclear proliferation (see, to that effect, judgment of 7 March 2017, Neka Novin v Council, T‑436/14, not published, EU:T:2017:142, paragraph 30) or whether such a link could be presumed. The mere fact established by the Council that the applicant had, in 2006, provided services at Natanz — the substance of those services being, moreover, unspecified — is not sufficient to support a finding that, in 2018, that is to say, 12 years after the provision of those services, there was still a link between the applicant’s activities and nuclear proliferation. Thus, the Council has not demonstrated that the continued application of the restrictive measures to the applicant had a sufficiently solid factual basis and was thus justified. The decision to maintain the applicant’s name on the lists at issue, arising from the adoption of the 2018 acts, is therefore vitiated by errors of assessment.
133 In so far as the decision to maintain the applicant’s name on the lists at issue is implicit in the 2018 acts, those acts must be annulled to the extent to which they concern the applicant, and there is no need to analyse the applicant’s arguments concerning breach of the principle of effective judicial protection and the third plea in law in the case.
Effects of the annulling judgment
134 As regards Implementing Regulation 2018/827, it must be recalled that, under the second paragraph of Article 60 of the Statute of the Court of Justice of the European Union, by way of derogation from Article 280 TFEU, decisions of the General Court declaring a regulation to be void are to take effect only as from the date of expiry of the period for bringing an appeal referred to in the first paragraph of Article 56 of the Statute or, if an appeal has been brought within that period, as from the date of dismissal of the appeal (see judgment of 5 February 2013, Bank Saderat Iran v Council, T‑494/10, EU:T:2013:59, paragraph 119 and the case-law cited).
135 In those circumstances, in the absence of an appeal, the Council has a period of two months, extended on account of distance by a period of 10 days, as from the notification of the present judgment, to remedy the infringements established by adopting, if appropriate, new restrictive measures with respect to the applicant.
136 With regard to the temporal effects of the partial annulment of Decision 2010/413, as amended by Decision 2018/833, it must be recalled that, under the second paragraph of Article 264 TFEU, the General Court may, if it considers it necessary, state which of the effects of the act which it has declared void are to be considered definitive.
137 When questioned at the hearing as to whether the applicant had been retained on the lists at issue by the adoption of acts subsequent to the 2018 acts, the Council did not give a clear answer. It did, however, ask the Court, in the event of annulment, to maintain the effects of Decision 2018/833 as regards the applicant, until the annulment of Implementing Regulation 2018/827 takes effect.
138 In the present case, if the dates when the annulment of Implementing Regulation 2018/827 and that of Decision 2018/833 take effect were to differ, that would be likely seriously to jeopardise legal certainty, since those two acts impose on the applicant measures which are identical. The effects of Decision 2018/833 must therefore be maintained, as regards the applicant, until the annulment of Implementing Regulation 2018/827 takes effect (see, to that effect, judgment of 16 September 2011, Kadio Morokro v Council, T‑316/11, not published, EU:T:2011:484, paragraph 39).
Costs
139 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Council has been largely unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.
On those grounds,
THE GENERAL COURT (Fourth Chamber)
hereby:
1. Annuls Council Decision (CFSP) 2018/833 of 4 June 2018 amending Decision 2010/413/CFSP concerning restrictive measures against Iran, and Council Implementing Regulation (EU) 2018/827 of 4 June 2018 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran, in so far as they concern Neda Industrial Group;
2. Orders that the effects of Decision 2018/833 be maintained as regards Neda Industrial Group until the annulment of Implementing Regulation 2018/827 takes effect;
3. Dismisses the action as to the remainder;
4. Orders the Council of the European Union to pay the costs.
Gervasoni | Madise | Martín y Pérez de Nanclares |
Delivered in open court in Luxembourg on 8 July 2020.
Table of contents
Background to the dispute
Context
Basic acts and subsequent amendments establishing the system of restrictive measures
Criterion applied on the adoption of restrictive measures against the applicant
Inclusion of the applicant’s name by acts subsequent to the basic acts
Reasons justifying the restrictive measures against the applicant
Notification and review of the restrictive measures
Decision to maintain the applicant’s name on the lists at issue
Procedure and forms of order sought
Law
Preliminary observations on the subject matter of the proceedings
Substance
Infringement of the obligation to state reasons
Errors of law
Errors of assessment
Effects of the annulling judgment
Costs