JUDGMENT OF THE GENERAL COURT (Seventh Chamber)
26 November 2015 (*)
(Common foreign and security policy — Restrictive measures against Iran with a view to preventing nuclear proliferation — Freezing of funds — Actions for annulment — Period allowed for commencing proceedings — Point from which time starts to run — Admissibility — Right to be heard — Obligation to notify — Obligation to state reasons — Rights of defence — Manifest error of assessment)
In Joined Cases T‑159/13 and T‑372/14,
HK Intertrade Co. Ltd, established in Wanchai, Hong Kong (China), represented by J. Grayston, Solicitor, P. Gjørtler, G. Pandey, D. Rovetta, N. Pilkington and D. Sellers, lawyers,
applicant,
v
Council of the European Union, represented by V. Piessevaux and M. Bishop, acting as Agents,
defendant,
APPLICATION, in Case T‑159/13, for annulment of Council Decision 2012/829/CFSP of 21 December 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2012 L 356, p. 71) and Council Implementing Regulation (EU) No 1264/2012 of 21 December 2012 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran (OJ 2012 L 356, p. 55), and, in Case T‑372/14, for annulment of the Council decision contained in the letter of 14 March 2014 concerning the maintenance of the restrictive measures adopted in respect of the applicant,
THE GENERAL COURT (Seventh Chamber),
composed of M. van der Woude (Rapporteur), President, I. Wiszniewska-Białecka and I. Ulloa Rubio, Judges,
Registrar: L. Grzegorczyk, Administrator,
having regard to the written procedure and further to the hearing on 17 June 2015,
gives the following
Judgment
Background to the dispute
1 The applicant, HK Intertrade Co. Ltd, is a company established in Hong Kong (China) which operates in the crude oil and oil-based products sector.
2 The present joined cases have been brought in connection with the restrictive measures introduced in order to apply pressure on the Islamic Republic of Iran to end proliferation-sensitive nuclear activities and the development of nuclear weapon delivery systems.
3 On 9 June 2010, the United Nations Security Council (‘the Security Council’) adopted UNSCR 1929 (2010) (‘UNSCR 1929’), which widened the scope of the restrictive measures imposed by UNSCR 1737 (2006), UNSCR 1747 (2007) and UNSCR 1803 (2008) and introduced additional restrictive measures against the Islamic Republic of Iran.
4 On 17 June 2010, the European Council underlined its deepening concern about Iran’s nuclear programme and welcomed the adoption of UNSCR 1929. Recalling its Declaration of 11 December 2009, the European Council invited the Council of the European Union to adopt measures implementing those contained in UNSCR 1929 as well as accompanying measures, with a view to supporting the resolution of all outstanding concerns regarding the Islamic Republic of Iran’s development of sensitive technologies in support of its nuclear and missile programmes, through negotiation. These measures were to focus on the areas of trade, the financial sector, the Iranian transport sector, key sectors in the oil and gas industry and additional designations, in particular for the Islamic Revolutionary Guards Corps.
5 On 26 July 2010, 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), Annex II to which decision lists the persons and entities — other than those designated by the Security Council or by the Sanctions Committee created by Resolution 1737 (2006) mentioned in Annex I — whose assets are to be frozen. Recital 22 in the preamble to that decision refers to UNSCR 1929 and states that that resolution notes the potential connection between the revenue derived by the Islamic Republic of Iran from its energy sector and the funding of its proliferation-sensitive nuclear activities.
6 Article 20(1)(b) of Decision 2010/413 provides, inter alia, for the freezing of funds of persons and entities ‘that have assisted designated persons or entities in evading or violating the provisions of UNSCR 1737 (2006), UNSCR 1747 (2007), UNSCR 1803 (2008) and UNSCR 1929 (2010) or [that] Decision’.
7 On 23 January 2012, the Council adopted Decision 2014/35/CFSP amending Decision 2010/413/CFSP (OJ 2012 L 19, p. 22). According to recital 13 in the preamble to that decision, the restrictions on admission and the freezing of funds and economic resources should be applied to additional persons and entities providing support to the Iranian Government allowing it to pursue proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems, in particular persons and entities providing financial, logistical or material support to that government.
8 Article 1(7)(a)(ii) of Decision 2012/35 added a point to Article 20(1) of Decision 2010/413, providing for the freezing of funds belonging to the following persons and entities:
‘(c) other persons and entities not covered by Annex I that provide support to the Government of Iran, and persons and entities associated with them, as listed in Annex II.’
9 As a result, the Council adopted, on 23 March 2012, Regulation (EU) No 267/2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2010 (OJ 2012 L 88, p. 1). In order to implement Article 20(1)(b) and (c) of Decision 2010/413, Article 23(2) of Regulation No 267/2012 provides for the freezing of funds belonging, inter alia, to the persons, entities and bodies listed in Annex IX thereto, identified as:
‘(b) being a natural or legal person, entity or body that has assisted a listed person, entity or body to evade or violate the provisions of this Regulation, Council Decision 2010/413/CFSP or UNSCR 1737 (2006), UNSCR 1747 (2007), UNSCR 1803 (2008) and UNSCR 1929 (2010);
…
(d) being other persons, entities or bodies that provide support, such as material, logistical or financial support, to the Government of Iran, and persons and entities associated with them;
…’
10 On 15 October 2012, the Council adopted Decision 201/635/CFSP amending Decision 2010/413 (OJ 2012 L 282, p. 58). According to recital 16 in the preamble to that decision, additional persons and entities were to be included in the list of persons and entities subject to restrictive measures as set out in Annex II to Decision 2010/413, in particular Iranian State-owned entities engaged in the oil and gas sector, since they provide a substantial source of revenue for the Iranian Government.
11 Article 1(8)(a) of Decision 2012/635 amended Article 20(1) of Decision 2010/413 by including the following provision indicating that certain persons and entities are to be subject to restrictive measures, namely:
‘(c) other persons and entities not covered by Annex I that provide support to the Government of Iran and entities owned or controlled by them or persons and entities associated with them, as listed in Annex II.’
12 Article 2 of Decision 2012/635 added the name of the National Iranian Oil Company (NIOC) to Annex II to Decision 2010/413, on the ground that that entity, owned and operated by the Iranian State, provided financial resources to the Iranian Government.
13 Consequently, on the same day, 15 October 2012, the Council adopted Implementing Regulation (EU) No 945/2012 implementing Regulation No 267/2012 (OJ 2012 L 282, p. 16). Article 1(1) of that implementing regulation included the name of NIOC in Annex IX to Regulation No 267/2012 for the same reason as that set out in Decision 2012/635.
14 On 21 December 2012, the Council adopted Decision 2012/829/CFSP amending Decision 2010/413 (OJ 2012 L 356, p. 71). Article 1(1) of that decision included the applicant’s name in Annex II to Decision 2010/413.
15 On 21 December 2012, the Council also adopted Regulation (EU) No 1263/2012 amending Regulation No 267/2012 (OJ 2012 L 356, p. 34). Article 1(11) of Regulation No 1263/2012 amended Article 23(2)(d) of Regulation No 267/2012, which thus provides for the freezing of funds of the persons, entities and bodies listed in Annex IX thereto, identified as:
‘(d) being other persons, entities or bodies that provide support, such as material, logistical or financial support, to the Government of Iran and entities owned or controlled by them, or persons and entities associated with them[.]’
16 In accordance with Decision 2012/829, Council Implementing Regulation (EU) No 1264/2012 of 21 December 2012 implementing Regulation No 267/2012 (OJ 2012 L 356, p. 55) (hereinafter, together with Decision 2012/829, ‘the contested measures’) amended Annex IX to Regulation No 267/2012 by adding, inter alia, the name of the applicant.
17 In the contested measures, the Council gave the following reasons for the freezing of the applicant’s funds and economic resources:
‘[The applicant] is assisting designated entities to violate the provisions of the EU regulation on Iran and is providing financial support to the government of Iran. [The applicant] is a front company controlled by EU-designated [NIOC]. In mid-2012 [the applicant] was scheduled to receive millions of dollars from NIOC oil sales.’
18 The Council published a notice for the attention of the persons and entities to which the restrictive measures adopted in the contested measures applied in the Official Journal of the European Union of 22 December 2012 (OJ 2012 C 398, p. 8).
19 By letter of 19 February 2013, the applicant informed the Council that it had received no notification letter and asked the Council to confirm that it had been designated by the contested measures and that a notification letter had been sent to it and also to send a copy of that letter as well as the supporting documents.
20 By letters of 20 February 2013, the Council acknowledged receipt of the applicant’s letter of 19 February 2013 and stated that the letter was in the process of being examined and also sent the applicant a copy of the notification letter addressed to it, indicating that the letter had been returned to the Council unopened.
21 In reply to the Council’s letter of 20 February 2013, the applicant wrote to the Council again on 28 February 2013, requesting, in essence, access to the documents used in determining the applicant’s identity and address and also to the documents proving that the notification letter had been posted and that it had been returned to the sender. The applicant requested the Council, in the event that it did not grant access to those documents, to confirm that there were no documents to disclose.
22 By letter of 8 May 2013, the applicant informed the Council that there was no entity established in Hong Kong under the name stated in the contested measures and therefore requested that that name be removed from the lists in Annex II to Decision 2014/413 and in Annex IX to Regulation No 267/2012 (‘the lists at issue’).
23 By letters of 14 May 2013, the applicant, first, requested the Council to remove its name from the lists at issue, contending that the reasons given for the inclusion of its name on those lists were insufficient and not substantiated by any evidence and, second, reiterated its request for access to the documents referred to in paragraph 21 above.
24 By letter of 19 June 2013, the Council sent the applicant the documents in its file.
25 By letter of 2 October 2013, the applicant submitted to the Council its observations on the Council’s letter of 19 June 2013. It stated that the documents disclosed by the latter contained no proof justifying its designation and therefore asked the Council to remove its name from the lists at issue.
26 By letter of 14 March 2014, the Council responded to the applicant’s observations in its letters of 8 and 14 May and 2 October 2013. It observed, inter alia, that the applicant did not dispute that it was owned by NIOC and reiterated the reasons why NIOC had been included on the lists at issue. The Council therefore informed the applicant of its decision to maintain its name on the lists at issue (‘the decision to maintain the applicant’s name on the lists at issue’).
Procedure and forms of order sought by the parties
27 By application lodged at the Registry of the General Court on 15 March 2013, the applicant brought the action in Case T‑159/13.
28 By order of the President of the Fourth Chamber of the General Court of 3 September 2013, the proceedings in Case T‑159/13 were stayed pending delivery of the judgment in National Iranian Oil Company v Council (T‑578/12, under appeal, EU:T:2014:678).
29 By a new application lodged at the Registry of the General Court on 26 May 2014, the applicant brought the action in Case T‑372/14.
30 The judgment in National Iranian Oil Company v Council referred to in paragraph 28 above (EU:T:2014:678) was delivered on 16 July 2014 and the proceedings in Case T‑159/13 were resumed. The Court asked the parties to submit their comments on the inferences to be drawn from that judgment for the action in Case T‑159/13. The parties complied with that request within the period prescribed.
31 Following a change in the composition of the Chambers of the General Court, the Judge-Rapporteur was assigned to the Seventh Chamber, to which the present cases were accordingly allocated.
32 The applicant claims that the Court should:
– In Case T‑159/13:
– annul the contested measures, in so far as they concern the applicant;
– order the Council to pay the costs.
– In Case T‑372/14: :
– annul the decision to maintain the applicant’s name on the lists at issue;
– order the Council to pay the costs.
33 The Council contends that the Court should: :
– In Case T‑159/13:
– dismiss the action as inadmissible or, in the alternative, as unfounded;
– order the applicant to pay the costs.
– In Case T‑372/14: :
– dismiss the action as unfounded;
– order the applicant to pay the costs.
34 Upon application by the applicant, and after the Council had been heard, Cases T‑159/13 and T‑372/14 were joined for the purposes of the oral procedure and the judgment, in accordance with Article 50 of the Rules of Procedure of the General Court of 2 May 1991.
Admissibility
35 The Council maintains that the action in Case T‑159/13, lodged on 14 March 2013, is out of time. Relying on the case-law of the Court of Justice in its judgment in Gbago and Others v Council of 23 April 2013 (C‑478/11 P to C‑482/11 P, ECR, EU:C:2013:258), it argues that the two-month period for commencing proceedings against the contested measures began to run of the date of publication of the notice in the Official Journal of the European Union, on 22 December 2012, and that, in those circumstances, the 14-day period provided for in Article 102(1) of the Rules of Procedure of 2 May 1991 does not apply. In the Council’s submission, the period for commencing proceedings, extended by the standard period on account of distance of 10 days provided for in Article 102(2) of the Rules of Procedure of 2 May 1991, therefore expired on 4 March 2013.
36 The applicant maintains that it was possible, even easy, to find its address and that the publication of the notice in the Official Journal of the European Union cannot therefore constitute the point from which time started to run for the purpose of commencing proceedings.
37 First, as regards the starting point of the period for bringing proceedings, it must be borne in mind that, under the sixth paragraph of Article 263 TFEU, an action for annulment must be brought within two months of the publication of the contested measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be.
38 Furthermore, according to case-law, the principle of effective judicial protection means that the European Union authority which adopts restrictive measures against a person or entity is bound to communicate the grounds on which those measures are based, either when those measures are adopted or, at the very least, as swiftly as possible after they have been adopted, in order to enable those persons or entities to exercise their right to bring an action (see, to that effect, judgment in Bank Melli Iran v Council, C‑548/09 P, ECR, EU:C:2011:735, paragraph 47 and case-law cited).
39 In the present case, that principle is given specific effect by Article 24(3) of Decision 2010/413 and Article 46(3) of Regulation No 267/2012, which provide that the Council is to communicate its decision, including the grounds for the inclusion of their name in the list of persons and entities covered by the restrictive measures, to the person or entity concerned, either directly, if the address is known, or through the publication of a notice, providing such person or entity with an opportunity to submit observations.
40 It follows that the period for bringing an action for annulment of an act imposing restrictive measures on a person or entity only begins to run either from the date of the individual communication of that act to the party concerned, if his address is known, or from the date of publication of a notice in the Official Journal of the European Union, where it was impossible directly to communicate that act to the party concerned (see, to that effect, judgment in Gbagbo and Others v Council, paragraph 35 above, EU:C:2013:258, paragraphs 59 to 62).
41 Lastly, it must be observed that the Council is not free to choose arbitrarily the means of communication of its decisions to the persons concerned. It is clear from paragraph 61 of Gbagbo and Others v Council, paragraph 35 above (EU:C:2013:258), that the Court of Justice intended that indirect communication of contested acts by means of the publication of a notice in the Official Journal of the European Union should be permissible solely in cases where it is impossible for the Council to undertake individual communication.
42 Secondly, as regards the calculation of the period for bringing proceedings, under Article 102(1) of the Rules of Procedure of 2 May 1991, where the period allowed for commencing proceedings against a measure adopted by an institution runs from the date of publication of that measure, that period runs from the end of the 14th day after publication of the measure in the Official Journal of the European Union. In that regard, it must be borne in mind that it follows from both the wording and purpose of Article 102(1) of the Rules of Procedure of 2 May 1991 that the 14-day extension provided for in that article applies to all measures communicated by means of publication, including measures of individual application communicated to the persons concerned through the publication of a notice in the Official Journal of the European Union (see, to that effect, judgment of 3 July 2014 in Zanjani v Council, T‑155/13, EU:T‑2014:605, paragraphs 39 to 45).
43 It should also be noted that, according to the case-law cited in paragraph 42 above, the 14-day period provided for in Article 102(1) of the Rules of Procedure of 2 May 1991 is applicable where the restrictive measures have been communicated indirectly to the entity concerned.
44 It therefore matters little whether or not the Council was able to communicate the contested measures by publishing a notice in the Official Journal of the European Union, given that the action brought by the applicant is, in any event, admissible. Taking as the point at which time began to run the date on which the notice was published in the Official Journal of the European Union, namely 22 December 2012, the two-month period for bringing proceedings provided for in the sixth paragraph of Article 263 TFEU, extended by 14 days and by the standard period on account of distance of 10 days provided for in Article 102(2) of the Rules of Procedure of 2 May 1991, expired on 18 March 2013. As it lodged its application on 15 March 2013, the applicant therefore complied with the statutory time-limit.
45 Accordingly, the Council’s argument that the action is inadmissible must be rejected.
Substance
46 The applicant relies on five pleas in law in support of its action in Case T‑159/13. The first plea alleges breach of the right to be heard. The second plea alleges breach of the obligation to give proper notice. The third plea alleges breach of the obligation to state reasons. The fourth plea alleges breach of the rights of the defence and the fifth pleas alleges manifest error of assessment.
47 In Case T‑372/13, the applicant raises two pleas in law, the first alleging breach of the obligation to state reasons and the second manifest error of assessment. In the reply, the applicant also alleges breach of the rights of the defence.
48 Since the first plea relied on in Case T‑372/14 is essentially the same as the third plea relied on in Case T‑159/13, the Court will consider those pleas together. The same applies to the second plea relied on in Case T‑372/14 and the fifth plea relied on in Case T‑159/13, both of which allege an error of assessment on the part of the Council. It is also appropriate to examine together the first, second and fourth pleas in Case T‑159/13 and the plea put forward in the reply in Case T‑372/14, as all those pleas allege, in essence, breach of the rights of the defence.
The pleas alleging breach of the obligation to state reasons
49 The applicant submits that the reasons set out in the contested measures and those in the decision to maintain the applicant’s name on the lists at issue are, individually and collectively, insufficient and not substantiated by any evidence.
50 The applicant also maintains that the Council was under an obligation to provide more detailed reasons because, first, the applicant is not in any way involved in terrorist activities and operates openly and transparently under Hong Kong law and, second, the restrictive measures adopted against it are unilateral sanctions, in the sense that they were not agreed within the Security Council.
51 At the hearing, the applicant added that the error in the formulation of its name in the contested measures, where it is described as ‘Hong Kong Intertrade’, as opposed to ‘HK Intertrade’, meant that it had not been possible for it to understand that it was the subject of those measures.
52 In the first place, it must be borne in mind that the question of the statement of reasons, which concerns an essential procedural requirement, is separate from that of the evidence of the conduct alleged, which concerns the substantive legality of the act in question and involves assessing the truth of the facts set out in that act and the characterisation of those facts as evidence justifying the use of restrictive measures against the person concerned (see, to that effect, judgment of 15 November 2012 in Council v Bamba, C‑417/11 P, ECR, paragraph 133 above, EU:C:2012:718, paragraph 60).
53 Accordingly, in the present case, the questions whether evidence was put forward to substantiate the reasons given for the contested measures and whether, as it did not operate or hold any funds within the European Union, it is possible to hold the applicant responsible for violating EU sanctions or for providing financial support to the Iranian Government are relevant only in the context of the pleas alleging error of assessment. On the other hand, those questions are not relevant in the context of the pleas under consideration.
54 First of all, it must be borne in mind that, according to a consistent body of case-law, the purpose of the obligation to state the reasons on which an act adversely affecting an individual is based, which is a corollary of the principle of respect for the rights of the defence, is, first, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the Courts of the European Union and, secondly, to enable those Courts to review the legality of that act (see judgment in Council v Bamba, paragraph 53 above, EU:C:2012:718, paragraph 49 and the case-law cited).
55 The statement of reasons required by Article 296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the court with jurisdiction to exercise its power of review (judgment in Council v Bamba, paragraph 53 above, EU:C:2012:718, paragraph 50).
56 Next, as regards restrictive measures adopted under the common foreign and security policy, it should be noted that, where the person concerned is not afforded the opportunity to be heard before the adoption of an initial decision to include his name on the list, compliance with the obligation to state reasons is all the more important because it constitutes the sole safeguard enabling the person concerned, at least after the adoption of that decision, to make effective use of the legal remedies available to him in order to challenge the lawfulness of that decision (judgments in Council v Bamba, paragraph 53 above, EU:C:2012:718, paragraph 51, and of 12 December 2006 in Organisation des Modjahedines du peuple d’Iran v Council, T‑228/02, ECR, (‘judgment in OMPI I’), EU:T:2006:384, paragraph 140).
57 Therefore, the statement of reasons for an act of the Council which imposes a restrictive measure must not only identify the legal basis for 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 (see, to that effect, judgments in Council v Bamba, paragraph 53 above, EU:C:2012:718, paragraph 52; OMPI I, paragraph 57 above, EU:T:2006:384, paragraph 146; and of 14 October 2009 in Bank Melli Iran v Council, T‑390/08, ECR, EU:T:2009:401, paragraph 83).
58 The statement of reasons must, however, be appropriate to the measure at issue and 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 matters of fact and law, since the question whether the statement of reasons is adequate 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 decision are sufficient if it was adopted in circumstances known to the party concerned which enable him to understand the scope of the measure concerning him (judgments in Council v Bamba, paragraph 53 above, EU:C:2012:718, paragraphs 53 and 54; OMPI I, paragraph 57 above, EU:T:2006:384, paragraph 141; and Bank Melli Iran v Council, paragraph 58 above, EU:T:2009:401, paragraph 82).
59 Lastly, it should be noted that if, at the very least, one of the reasons mentioned in contested measures is sufficiently detailed and specific, is substantiated and constitutes in itself a sufficient basis to support those measures, the fact that the same cannot be said of other such reasons cannot justify the annulment of the measures (see, to that effect, judgment of 18 July 2013 in Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, ECR (‘judgment in Kadi II), EU:C:2013:518, paragraph 130).
60 In the present case, first, the Court considers that the obligation to state reasons is applicable regardless of the identity of the entity concerned by a decision to freeze funds and regardless of whether that decision was taken following a Security Council resolution. The applicant’s argument that the Council was under an obligation to provide a more detailed statement of reasons when it decided to include its name on the lists at issue must therefore be rejected.
61 With regard to the entity concerned, it must be noted that the principles underpinning the case-law cited in paragraphs 55 to 59 above, which are bound up with respect for fundamental rights, must also be applied when reviewing the lawfulness of a decision imposing restrictive measures with a view to combating terrorism (see, to that effect, judgment in Kadi II, paragraph 60 above, EU:C:2013:518, paragraph 116). The applicant was therefore incorrect to claim that a limited statement of reasons is acceptable where sanctions are to be imposed on persons or entities involved in terrorist acts and a more detailed statement required in a case such as the present.
62 As regards the question whether the decision to list a person, entity or body was preceded by the adoption of a measure by an international body, it should be noted that the principles underlying the obligation to state reasons are applicable in all circumstances, not least when the reasons stated for the measure represent reasons stated by an international body, such as the Security Council (see, to that effect, judgment in Kadi II, paragraph 60 above, EU:C:2013:518, paragraph 116). Although, in such circumstances, the Council may refer to the reasons given in the Security Council’s decision, case-law makes it clear that the Council is not relieved of its obligation to ascertain whether those reasons comply with the principles referred to in paragraphs 58 and 59 above. While the rigour with which a review must be carried out for the purpose of ensuring that the reasons given for an EU measure comply with fundamental principles is not therefore affected by the fact that that measure is a result of a decision adopted within the United Nations, it may not be concluded form this, as the applicant claims, that more detailed reasons must be given where restrictive measures are imposed autonomously by the Council.
63 In the second place, the reasons given for the contested measures include the following:
– the applicant is assisting designated entities to violate the provisions of EU legislation on Iran;
– the applicant is providing support to the Iranian Government;
– the applicant is a front company controlled by EU-designated NIOC;
– in mid-2012, the applicant was scheduled to receive millions of dollars from NIOC oil sales.
64 The Court finds that the third reason, namely that the applicant is a front company controlled by NIOC, is sufficiently detailed and specific, since it enabled the applicant to understand, at the very least, the reasons why the Council decided to include its name on the lists at issue.
65 First, it should be recalled that Article 20(1)(c) of Decision 2010/413, as amended, the terms of which are specified in Article 23(2)(d) of Regulation No 267/2012, lays down not only a substantive criterion allowing the Council to freeze the funds of entities that provide support to the Iranian Government, but also a criterion of ownership or control, on the basis of which the Council can adopt restrictive measures against entities owned or controlled by an entity providing such support to that government.
66 Consequently, by indicating that the applicant is a front company controlled by NIOC, which was designated under the restrictive measures at issue on the ground that it provided financial support to the Iranian Government, the statement of reasons for the contested measures enabled the applicant to understand that the restrictive measures had been adopted against it, in accordance with the provisions referred to above, on account of the capital links that existed between the applicant and NIOC and the fact that it was controlled by NIOC.
67 Secondly, the Court considers that the circumstances of the present case differ from those of the case giving rise to the judgment of 26 October 2012 in CF Sharp Shipping Agencies v Council (T‑53/12, ECR, EU:T:2012:578), which the applicant has invoked in support of its arguments. In the latter case, the Council justified the restrictive measures adopted against the applicant in that case by the fact that that applicant had helped another entity to avoid the effects of the restrictive measures directed at it by making or receiving certain payments, and maintained that the assertion that the applicant was a ‘front company’ for that entity made it possible for the reasons for its inclusion in the lists to be understood. In those circumstances, the Court held that, by stating merely that the applicant was a ‘front company’ for the entity it had allegedly helped, the statement of reasons for the contested measures in the case in question did not make it possible for the allegations against that applicant to be understood, as it did not contain any details of payments received or made by that applicant (judgment in CF Sharp Shipping Agencies v Council, EU:T:2012:578, paragraphs 39 to 44).
68 By contrast, in the present case, the Council justifies the adoption of the restrictive measures with respect to the applicant on the basis, inter alia, of the links of ownership and control that exist between the applicant and NIOC. In those circumstances, it can be concluded, without contradicting the Court’s reasoning in CF Sharp Shipping Agencies v Council, cited in paragraph 68 above, (EU:T:2012:578), that the claim that the applicant is a front company for NIOC, which was designated under the restrictive measures at issue, constitutes a sufficient statement of reasons with respect to the criterion of ownership and control laid down in Article 20(1)(c) of Decision 2010/413, as amended, and in Article 23(2)(d) of Regulation No 267/2012. Even though the notion of ‘front company’ has no specific legal meaning, it nevertheless expresses the idea of ownership and control by a parent company and therefore made it possible for the specific reasons that led the Council to freeze the applicant’s funds to be understood in this case.
69 Thirdly, while the precise, correct identification of the persons and entities at which restrictive measures are directed is an essential aspect of the statement of reasons, the Court finds in the present case that the error made by the Council in that regard did not prevent the applicant from understanding the scope of the contested measures. Various elements made it possible to dispel any uncertainty as to the identity of the entity at which those measures were directed.
70 First, it is clear that the capital letters ‘H’ and ‘K’ in the applicant’s name refer to its place of establishment, namely Hong Kong.
71 Next, it is clear from the explanations provided by the applicant at the hearing that the results of a search for a company called ‘Hong Kong Intertrade Co. Ltd’ in the Hong Kong Register of Companies, which may be accessed by Internet, gave the applicant’s name, namely HK Intertrade Co. Ltd. By carrying out a simple, swift search on line in that register, it was therefore possible to establish that the company ‘Hong Kong Intertrade Co. Ltd’ did not exist and that the only company that could be identified under that name was the applicant.
72 Lastly, the indication in the statement of reasons for the contested measures that the company ‘Hong Kong Intertrade Co. Ltd’ is controlled by NIOC could leave no room for any doubt as to the identity of the company that was the subject of the contested measures. Indeed, the applicant does not dispute that it is owned and controlled by NIOC. Given the context in which the contested measures were adopted, the applicant cannot therefore claim that it did not understand that, under the name ‘Hong Kong Intertrade Co. Ltd’, it was the subject of restrictive measures, in the same way as numerous other subsidiaries of NIOC whose names were also included on the lists at issue on account of the fact that they were owned or controlled by that entity.
73 Accordingly, the Court finds that the third reason set out in the contested measures made it possible for the applicant to understand that it was the subject of restrictive measures on the basis of the criterion based on ownership and control laid down in Article 20(1)(c) of Decision 2010/413 and Article 23(2)(d) of Regulation No 267/2012. In the light of the observations set out in paragraph 60 above, there is therefore no need to verify whether the other reasons given in the contested measures are sufficiently detailed and specific.
74 It follows that the Council did not fail to have regard to its obligation to state reasons.
75 The same conclusion must be drawn in Case T‑372/14, given that it is apparent from the Council’s letter of 14 March 2014 that the reasons for the decision to maintain the applicant’s name on the lists at issue were no different from the reasons set out in the contested measures in Case T‑159/13 (see paragraph 26 above). In that letter, the Council repeated, inter alia, that the applicant was controlled by NIOC and that it was therefore necessary to maintain its name on the lists at issue in order to avoid any circumvention of the measures taken against that entity.
76 It follows from the analysis given above (paragraphs 66 to 75) that it must be concluded that the statement that the applicant is owned and controlled by NIOC constitutes a sufficient reason to enter, and accordingly maintain, its name on the lists at issue.
77 The pleas alleging breach of the obligation to state reasons must therefore be rejected as unfounded.
Breach of the rights of the defence and the right to effective judicial protection
Case T‑159/13
78 By its first, second and fourth pleas in Case T‑159/13, the applicant claims that the Council infringed its rights of defence, including its right to effective judicial protection, for three reasons: first, the Council failed to arrange a hearing prior to entering the applicant’s name on the lists at issue; second, the Council did not give the requisite notification of the contested measures; and, third, it did not reply to the applicant’s request for access to documents.
79 Before examining those three heads of complaint, it must be noted that the principle of observance of the rights of the defence requires, first, that the entity concerned is informed of the evidence adduced against it to justify the act adversely affecting it. Secondly, that entity must be afforded the opportunity effectively to make known its view on that evidence (see, by analogy, judgment in OMPI I, cited in paragraph 57 above, EU:T:2006:384, paragraph 93). On the other hand, neither the legislation in question, namely Decision 2010/413 and Regulation No 267/2012, nor the general principle of observance of the rights of the defence gives the persons concerned the right to a formal hearing (see, to that effect and by analogy, judgment of 23 October 2008 in People’s Mojahedin Organization of Iran v Council, T‑256/07, ECR, EU:T:2008:461, paragraph 93 and the case-law cited).
80 With regard to an initial measure whereby the funds of an entity are frozen, unless there are overriding considerations pertaining to the security of the European Union or of its Member States or to the conduct of their international relations which preclude it, the evidence adduced against that entity must be communicated either concomitantly with the adoption of the measure concerned or as soon as possible thereafter. At the request of the entity concerned, it also has the right to make known its view on that evidence after the adoption of the measure (see, to that effect and by analogy, judgments of 3 September 2008 in Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, ECR, EU:C:2008:461, paragraph 342, and in OMPI I, paragraph 57 above, EU:T:2006:384, paragraph 137).
81 Notification of the evidence adduced and a hearing of the parties concerned before the adoption of the initial decision to freeze funds would be liable to jeopardise the effectiveness of the sanctions and would thus be incompatible with the public interest objective pursued by the European Union. An initial measure freezing funds must, by its very nature, be able to benefit from a surprise effect and to be applied with immediate effect. Notification cannot therefore be given of such a measure before it is implemented (see, to that effect and by analogy, judgment in OMPI I, paragraph 57 above, EU:T:2006:384, paragraph 128).
82 Moreover, the principle of effective judicial protection is a general principle of EU law stemming from the constitutional traditions common to the Member States, which has been enshrined in Articles 6 and 13 of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, and in Article 47 of the Charter of Fundamental Rights of the European Union. The effectiveness of judicial review means that the EU authority in question is bound to disclose the grounds for a restrictive measure to the entity concerned, so far as possible, either when that measure is adopted or, at the very least, as swiftly as possible after its adoption, in order to enable the entity concerned to exercise, within the periods prescribed, its right to bring an action. Observance of that obligation to communicate the grounds is necessary both to enable the persons to whom restrictive measures are addressed to defend their rights in the best possible conditions and to decide, with full knowledge of the relevant facts, whether there is any point in their applying to the courts of the European Union, and also to put the latter fully in a position whereby they may carry out a review of the lawfulness of the measure in question, which is the duty of those courts (see, to that effect and by analogy, judgment in Kadi and Al Barakaat International Foundation v Council and Commission, paragraph 80 above, EU:C:2008:461, paragraphs 335 to 337 and case-law cited).
83 In the light of those principles, the Court must examine whether, in the present case, the applicant’s rights of defence and its right to effective judicial protection have been observed.
– Arrangement of a prior hearing
84 The applicant submits that the Council should have respected its right to a prior hearing in order to enable it to explain its status as a private company. At the hearing, the applicant also stated that it did not hold any funds in accounts within the European Union at the time of its entry on the lists at issue and that there was thus no need for its funds to be frozen without a prior hearing.
85 The Court notes, first, that it is unequivocally clear from the case-law cited in paragraph 82 above that an initial measure freezing funds and economic resources must, by its very nature, benefit from a surprise effect and there can therefore be no justification for a hearing before the measure is implemented. Accordingly, the applicant cannot reasonably maintain that it should have been granted a prior hearing.
86 Secondly, in view of the preventive nature of restrictive measures, even if the applicant was not holding any funds in accounts within the European Union when the contested measures were adopted, that could not create an obligation on the part of the Council to inform and to hear the applicant before adopting restrictive measures against it. If the applicant’s listing had been delayed and its surprise effect removed by the grant of a prior hearing, nothing would have prevented NIOC from using the applicant to transfer certain funds within the European Union and thus to circumvent the restrictive measures to which it was subject, before the Council had adopted its decision. The applicant is therefore wrong to maintain that there was no need to freeze its funds before it was heard.
87 It must, moreover, be held that requiring the Council to verify, in respect of each person or entity whose funds it intends to freeze, whether that person or entity actually has funds or economic resources within the European Union would constitute an excessive burden which would be liable to affect the effectiveness of the restrictive measures.
88 It must therefore be concluded that the Council did not infringe the applicant’s rights of defence as regards its right to be heard.
– Notification of the contested measures
89 The applicant states that the name and address given in the contested measures and in the notification letter are incorrect. In the applicant’s submission, the Council could easily have found the correct information relating to it if it had carried out the necessary checks.
90 It must be noted that the lack of individual notification of the contested measures, although it has an effect on when the time for bringing proceedings started to run, does not, on its own, justify annulment of the measures in question. In that regard, the applicant does not put forward any argument to demonstrate that, in the present case, that lack of individual notification resulted in interference with its rights such as to justify annulment of those measures (see, to that effect, judgment of 6 September 2013 in Bank Melli Iran v Council, T‑35/10 and T‑7/11, ECR, EU:T:2013:397, paragraphs 112 and 113). Moreover, there is no evidence in the file of any such interference, given that, notwithstanding the lack of individual communication, the applicant was able to submit its comments on the restrictive measures adopted against it to the Council and to bring before the Court, within the periods prescribed, an action for annulment of the contested measures.
91 Accordingly, irrespective of the question whether the Council was required to seek the applicant’s address, the failure to comply with the obligation to give due notification did not prevent the applicant from being informed of the inclusion of its name on the lists at issue or from being apprised of the specific reasons for its inclusion because, as concluded above (paragraphs 50 to 75), the statement of reasons provided in that regard was sufficient. Consequently, the failure to communicate the contested measures to the applicant individually cannot, in the present case, justify the annulment of those measures.
92 Moreover, the same conclusion must be drawn as regards the error in the formulation of the applicant’s name, that is, the error of identifying it as ‘Hong Kong Intertrade’ rather than ‘HK Intertrade’. Since that error did not prevent the applicant from understanding that it was the subject of the contested measures (see paragraphs 70 to 74 above), or from defending its rights by bringing proceedings before the Courts of the European Union, it cannot justify the annulment of those measures.
93 Accordingly, the Council did not infringe the applicant’s rights of defence as regards the initial disclosure of inculpatory evidence.
– Access to documents
94 The applicant claims that, by failing to reply to its request for disclosure of documents, the Council infringed its rights of defence and its right to effective judicial protection.
95 Moreover, the applicant notes that the Council decided to enter its name on the lists at issue on the basis of a proposal from a Member State without any consideration as to whether there was any evidence to justify that listing. It submits that the Council thus introduced a new decision-making procedure that has no legal basis in Article 215 TFEU, the consequence of which is that the applicant is prevented from having access to the evidence on the basis of which the restrictive measures concerning the applicant were adopted and from identifying the Member State in which it could commence proceedings in order to assert its rights, in particular its right to obtain access to such evidence.
96 It must be borne in mind that the belated disclosure of a document on which the Council relied in order to adopt or maintain the restrictive measures concerning an entity or the failure to disclose such a document does not constitute a breach of the rights of the defence that would justify the annulment of the acts concerned unless it is established that the restrictive measures in question could not have been lawfully adopted or maintained if the document belatedly disclosed had to be excluded as inculpatory evidence (judgment of 6 September 2013 in Persia International Bank v Council, T‑493/10, ECR (Extracts), EU:T:2013:398, paragraph 85).
97 As a consequence, in this instance, even assuming that the Council did belatedly disclose or failed to disclose certain material contained in its file, that could justify the annulment of the contested measures only if it were also established that the adoption of the restrictive measures concerning the applicant could not be justified in the light of the material disclosed to the applicant in good time, that is to say, in the light of the grounds stated in the contested measures. The question whether those grounds, concerning the links of ownership and control between NIOC and the applicant, were a sufficient basis for the restrictive measures imposed on the applicant will be examined below in the context of the examination of the pleas alleging error of assessment (see paragraphs 107 to 119).
98 Moreover, it should be pointed out that the fact that the applicant was listed on a proposal from a Member State does not alter the fact that the contested measures are acts of the Council, which has the power to adopt restrictive measures on the basis of Article 23(2) of Decision 2010/413 and Article 46(2) of Regulation No 267/2012. Furthermore, in a case such as this, the Council was not obliged to follow the procedure laid down in Article 215(1) TFEU in order to adopt individual fund-freezing measures since it could, under Article 291(2) TFEU, confer on itself an implementing power such as that provided for in Article 46(2) of Regulation No 267/2012.
99 Subject to establishing whether the grounds set out in the contested measures were sufficient to justify freezing the applicant’s funds, which is covered by the examination of the pleas alleging error of assessment, it must be concluded that the Council did not infringe the applicant’s rights of defence with regard to access to the documents on which the Council relied in order to adopt restrictive measures against the applicant.
100 In those circumstances, the Court considers that the applicant was able to defend its rights and that the Court was fully in a position to carry out its review of the lawfulness of the contested measures. The applicant’s right to effective judicial protection has not, therefore, been infringed.
101 The Court must therefore reject the first, second and fourth pleas in law in Case T‑159/13, alleging infringement of the rights of the defence and of the right to effective judicial protection, as unfounded.
Case T‑372/14
102 The applicant invoked, at the stage of the reply in Case T‑372/14, infringement of the rights of the defence in that the Council should have informed the applicant of the reasons why it proposed to maintain the applicant’s name on the lists at issue, and thus have allowed the applicant to comment on those reasons before, not after, adopting a decision in that respect.
103 It should be noted that, under Article 84(1) of the Rules of Procedure of the General Court, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure.
104 In the present case, the Court notes that, in the application in Case T‑372/14, the applicant did not raise any plea alleging that the Council infringed its rights of defence in adopting the decision to maintain the applicant’s name on the lists at issue. Accordingly, since the argument put forward by the applicant in that respect in the reply is not based on any new matter that has come to light in the course of the procedure, and that argument cannot be regarded as amplifying a complaint made previously in the application, it must be rejected as inadmissible.
105 In the light of all foregoing, all the pleas alleging infringement of the rights of the defence must be rejected.
The pleas alleging error of assessment
106 The applicant submits that the Council failed to make any assessment of the facts. It draws that conclusion from the fact that, first, neither its name nor its address were correctly identified by the Council, even though a simple Internet search would have enabled it to obtain that information, and, secondly, that the Council did not adduce any evidence to substantiate its decision to enter its name on the lists at issue. The applicant also maintains in the reply that the publication of a corrigendum in order to replace ‘Hong Kong Intertrade Company’ by its correct name is not sufficient and that a separate decision giving reasons should have been adopted.
107 As a preliminary point, it must be observed that the effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights requires inter alia that, as part of the review of the lawfulness of the grounds which are the basis of the decision to list or to maintain the listing of a given person, the Courts of the European Union are to ensure that that decision 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 in Kadi II, paragraph 60 above, EU:C:2013:518, paragraph 119).
108 It is the task of the competent EU authority to establish, in the event of challenge, that the reasons relied on against the person concerned are well founded, and not the task of that person to adduce evidence of the negative — that those reasons are not well founded. It is necessary that the information or evidence produced should support the reasons relied on against the person concerned. If that material is insufficient to allow a finding that a reason is well founded, the Courts of the European Union are to disregard that reason as a possible basis for the contested decision to list or maintain a listing (judgment in Kadi II, paragraph 60 above, EU:C:2013:518, paragraphs 121 to 123).
109 Next, it must be pointed out that, given the not insignificant danger that an entity identified as providing support to the Iranian Government may exert pressure on the entities it owns or controls in order to circumvent the effect of the fund-freezing measures applying to it, by encouraging them either to transfer their funds to it, directly or indirectly, or to carry out transactions which it cannot itself perform by reason of the freezing of its funds, Article 20(1)(c) of Decision 2010/413, as amended, and Article 23(2)(d) of Regulation No 267/2012 require a fund-freezing measure to be adopted against those entities owned or controlled by an entity identified as providing support to the Iranian Government, and the Council has no discretion in that regard (see, to that effect, the judgment of 13 March 2012 in Melli Bank v Council, C‑380/09 P, ECR, EU:C:2012:137, paragraphs 39 and 58)
110 Accordingly, when adopting a decision under Article 20(1)(c) of Decision 2010/413, as amended, and Article 23(2)(d) of Regulation No 267/2012, the Council must assess the circumstances of the case in order to determine which entities are entities that are owned or controlled. On the other hand, the nature of the activities of the entity concerned and any lack of a link between those activities and the provision of support to the Iranian Government are not relevant criteria in that context, since the reason for the adoption of a fund-freezing measure against the entity that is owned or controlled need not be that that entity is itself directly providing support to the Iranian Government (see, to that effect, judgment in Melli Bank v Council, cited in paragraph 109 above, EU:C:2012:137, paragraphs 40 to 42).
111 Lastly, it is also settled case-law that, where the capital of an entity is entirely owned by an entity providing support to the Iranian Government, the criterion for inclusion laid down in Article 20(1)(c) of Decision 2010/413, as amended, and in Article 23(2)(d) of Regulation No 267/2012 is satisfied (see, to that effect, judgment in Melli Bank v Council, paragraph 109 above, EU:C:2012:137, paragraph 79).
112 It follows that the adoption of restrictive measures against an entity wholly owned by an entity considered to be providing support to the Iranian Government is not a consequence of an assessment by the Council as to the risk that the wholly owned entity might be led to circumvent the effect of the measures adopted against the parent entity, but is the direct result of the implementation of the relevant provisions of Decision 2010/413 and Regulation No 267/2012 (see, to that effect, judgment of 20 February 2013 in Melli Bank v Council, T‑492/10, ECR, EU:T:2013:80, paragraph 57).
113 In the present case, first of all, it should be borne in mind that the basis of the third reason relied on against the applicant is that it is a front company controlled by NIOC, which was designated by the Council on the basis that it provided support to the Iranian Government. The applicant does not dispute the fact that it was set up and is wholly owned by NIOC or that NIOC is subject to restrictive measures on the ground that it provides financial resources to the Iranian Government.
114 In accordance with the principle derived from the case-law mentioned in paragraph 112 above, it must therefore be concluded that the entry of the applicant’s name on the lists at issue was justified in the light of the criterion laid down in Article 20(1)(c) of Decision 2010/413, as amended, and Article 23(2)(d) of Regulation No 267/2012. On the basis of that criterion, the Council was not in fact required to demonstrate that the applicant itself directly provided financial support to the Iranian Government.
115 Accordingly, the third reason relied on has been proven to the requisite legal standard and justifies in itself the inclusion of the applicant’s name on the lists at issue.
116 Next, as regards the error in the formulation of the applicant’s name, it should be recalled that that error did not prevent the applicant from understanding the allegations levelled against it (see paragraphs 70 to 74 above) and the Court finds that that error does not alter the fact that the reason relied on, namely that NIOC owns and controls the applicant, is well founded. Thus, while undoubtedly regrettable, that error on the part of the Council cannot justify the annulment of the contested measures or therefore oblige the Council to adopt new measures.
117 Lastly, as regards the justification for the decision to maintain the applicant’s name on the lists at issue, since the applicant does not dispute that it is owned or controlled by NIOC in Case T‑372/14 either, it must be concluded that the entry of its name on the lists at issue remained justified when that decision was adopted.
118 In view of the foregoing, the pleas alleging error of assessment must be rejected as unfounded.
119 It follows from all the foregoing considerations that the actions in Joined Cases T‑159/13 and T‑372/14 must be dismissed in their entirety.
Costs
120 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 applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Council.
On those grounds,
THE GENERAL COURT (Seventh Chamber)
hereby:
1. Dismisses the actions.
2. Orders HK Intertrade Co. Ltd to bear its own costs and to pay the costs incurred by the Council of the European Union.
Van der Woude | Wiszniewska-Białecka | Ulloa Rubio |
Delivered in open court in Luxembourg on 26 November 2015.
[Signatures]