Case T‑433/13

Petropars Iran Co. and Others

v

Council of the European Union

(Common foreign and security policy — Restrictive measures against Iran with the aim of preventing nuclear proliferation — Freezing of funds — Obligation to state reasons — Error of assessment — Plea of illegality — Right to conduct business — Right to property — Protection of public health, security and the environment — Precautionary principle — Proportionality — Rights of defence)

Summary — Judgment of the General Court (Seventh Chamber), 5 May 2015

1.      Acts of the institutions — Statement of reasons — Obligation — Scope — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Decision falling within a context known to the person concerned, enabling him to understand the scope of the measure taken against him — Whether a summary statement of reasons is sufficient

(Art. 296 TFEU; Council Decisions 2010/413/CFSP and 2013/270/CFSP; Council Regulations No 267/2012 and No 522/2013)

2.      Acts of the institutions — Statement of reasons — Obligation — Scope — Restrictive measures against Iran — Freezing of funds of entities owned by an entity providing financial support to the Iranian Government — Minimum requirements — Mention of the said entities as subsidiaries — Context enabling identification of the parent company

(Art. 296 TFEU; Council Decisions 2010/413/CFSP and 2013/270/CFSP; Council Regulations No 267/2012 and No 522/2013)

3.      Judicial proceedings — Introduction of new pleas during the proceedings — Conditions — Amplification of an existing plea — No amplification — Inadmissibility

(Rules of Procedure of the General Court, Arts 44(1)(c), and 48(2))

4.      European Union — Judicial review of the legality of the acts of the institutions — Restrictive measures against Iran — Ambit of the review

(Charter of Fundamental Rights of the European Union, Art. 47; Council Decisions 2010/413/CFSP and 2013/270/CFSP; Council Regulations No 267/2012 and No 522/2013)

5.      Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Obligation to extend that measure to entities owned or controlled by such an entity — Whether an entity is owned or controlled — Assessment on a case-by-case basis by the Council — Criteria

(Council Decisions 2010/413/CFSP, Art. 20(1)(c), and 2013/270/CFSP; Council Regulations No 267/2012, Art. 23(2)(d), and No 522/2013)

6.      Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of entities owned by an entity providing financial support to the Iranian Government — Restriction of the right to property and the right to free exercise of an economic activity — No breach of principle of proportionality

(Charter of Fundamental Rights of the European Union, Arts 16 and 17; Council Decisions 2010/413/CFSP and 2013/270/CFSP; Council Regulations No 267/2012 and No 522/2013)

7.      Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of entities owned by an entity providing financial support to the Iranian Government — No infringement of the principle of protection of the environment and of the health and safety of workers and citizens – No infringement of the precautionary principle

(Council Decisions 2010/413/CFSP and 2013/270/CFSP; Council Regulations No 267/2012 and No 522/2013)

8.      Acts of the institutions — Statement of reasons — Obligation — Scope — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Obligation to communicate the reasoning to the person concerned at the same time as the measure adversely affecting him or immediately thereafter — Limits — Safety of the Union and the Member States or conduct of their international relations — Right of access to documents subject to a request in that behalf to the Council

(Art. 296 TFEU; Council Decisions 2010/413/CFSP and 2013/270/CFSP; Council Regulations No 267/2012 and No 522/2013)

9.      EU law — Principles — Rights of defence — Right to effective judicial protection — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Obligation to disclose incriminating evidence — Scope

(Charter of Fundamental Rights of the European Union, Art. 47; Council Decisions 2010/413/CFSP and 2013/270/CFSP; Council Regulations No 267/2012 and No 522/2013)

10.    Actions for annulment — Judgment annulling a measure — Effects — Limitation by the Court — Restrictive measures against Iran — Partial annulment of two acts containing restrictive measures — Risk of legal certainty being seriously affected — Maintenance of the effects of the annulled measures until the expiry of the deadline for lodging an appeal or until the dismissal thereof

(Art. 264, second para., TFEU; Statute of the Court of Justice, Art. 60, second para.; Council Decisions 2010/413/CFSP and 2013/270/CFSP; Council Regulations No 267/2012 and No 522/2013)

1.      See the text of the decision.

(see paras 32-36)

2.      In the context of restrictive measures against Iran, such as the freezing of funds of entities supporting the Iranian Government and entities associated with them, which is required of the Council by Article 20(1)(c) of Decision 2010/413 concerning restrictive measures against Iran and Article 23(2)(d) of Regulation No 267/2012 concerning the adoption of restrictive measures against Iran, the statement of reasons for measures listing certain entities as being amongst those supporting the nuclear and ballistic missile programme and those supporting the Iranian Government enables the latter to identify the criterion laid down by Article 20(1)(c) of Decision 2010/413 and Article 23(2)(d) of Regulation No 267/2012, namely the listing criterion concerning entities held by an entity supporting the Iranian Government, which served as the legal basis for their listing, where, first, the use of the word ‘subsidiary’ in that statement or reasons necessarily refers to the existence of control by a parent company which may result, in particular, from the existence of shareholding links between the latter and the subsidiary in question, and, second, the context in which the contested acts were adopted made it possible to identify the parent company which owned or controlled them, whose inclusion on the lists  was based on the criterion for inclusion applicable to entities providing support to the Iranian Government.

(see paras 40-47)

3.      See the text of the decision.

(see paras 54-59)

4.      See the text of the decision.

(see paras 60, 61)

5.      When the funds of an entity identified as providing support to the Iranian Government are frozen, there is a not insignificant danger that that entity may exert pressure on the entities it owns or controls or which belong to it, in order to circumvent the effect of the measures applying to it. Consequently, the freezing of the funds of such entities, as imposed by the Council by Article 20(1)(c) of Decision 2010/413 and Article 23(2)(d) of Regulation No 267/2012, is necessary and appropriate in order to ensure the effectiveness of the measures adopted and to ensure that those measures are not circumvented.

Accordingly, when adopting a decision under the provisions referred to above, the Council must carry out an assessment of the circumstances of the individual case in order to determine which entities may be classified as entities owned or controlled. On the other hand, the nature of the activity of the entity concerned and the fact that there may be no connection between that activity and the provision of support to the Iranian Government are not relevant criteria in that context, as the grounds for the adoption of a measure freezing the funds of an entity that is owned or controlled do not have to include the fact that the entity itself directly provides support to that government.

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 and in Article 23(2)(d) of Regulation No 267/2012 is satisfied.

Where the capital of an entity is indirectly held by an entity providing support to the Iranian Government, the criterion for inclusion laid down in Article 20(1)(c) of Decision 2010/413 and in Article 23(2)(d) of Regulation No 267/2012 is satisfied, irrespective of the presence and number of intermediary companies between that parent entity and the entity that is owned by it, provided that each of the entities present in the holding chain is entirely owned by its respective direct parent company. In such circumstances, the parent entity retains sole and exclusive control over all its subsidiaries and is therefore in a position, via intermediary companies, to exert pressure on the entity which it owns indirectly in order to circumvent the effect of the measures applying to it, therefore justifying the adoption of restrictive measures in respect of the entity that is thus indirectly owned.

Where virtually all the capital of an entity is 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 and in Article 23(2)(d) of Regulation No 267/2012 is satisfied, since a parent company is able to exercise decisive influence over the conduct of its subsidiary where it owns all, or virtually all, of its capital. However, a holding of 48% or 49% of an entity’s share capital by an entity providing support to the Iranian Government is not sufficient by itself, to justify the adoption of restrictive measures in respect of those entities.

(see paras 62-64, 68, 69, 72, 73, 81)

6.      See the text of the decision.

(see paras 92-95)

7.      In the context of restrictive measures against Iran, such as the freezing of funds of entities supporting the Iranian Government and entities associated with them, the claim that those restrictive measures create a risk to the environment and to the health and safety of workers and ordinary Iranians is unfounded in this case, since it is apparent from the applicants’ arguments that that risk arises from restrictions imposed by the EU in relation to the supply to Iranian entities of goods or key technologies or of technical services associated with those goods intended for the gas industry in Iran. Those restrictions apply to any Iranian entity and may therefore affect the above-mentioned entities, irrespective of whether they are included on the list of entities supporting the nuclear or ballistic missile programme and entities supporting the Iranian Government.

It also follows that the Council cannot be criticised for not having considered the possible application of the precautionary principle when adopting the above-mentioned restrictive measures.

(see paras 98-101, 103)

8.      See the text of the decision.

(see paras 112-114)

9.      See the text of the decision.

(see paras 119-122)

10.    See the text of the decision.

(see paras 128-134)