JUDGMENT OF THE GENERAL COURT (Seventh Chamber)
10 July 2014 (*)
(Common foreign and security policy — Restrictive measures adopted against Iran with the aim of preventing nuclear proliferation — Freezing of funds — Obligation to state reasons — Error of assessment)
In Case T‑182/13,
Moallem Insurance Co., established in Tehran (Iran), represented by D. Luff, lawyer,
applicant,
v
Council of the European Union, represented by A. Vitro and M. Bishop, acting as Agents,
defendant,
APPLICATION for, first, annulment of (i) 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), in that it listed the applicant in Annex II to Council Decision 2010/413/CFSP of 26 July 2010 concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP (OJ 2010 L 195, p. 39) and (ii) 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), in that it listed the applicant in Annex IX to Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2010 (OJ 2012 L 88, p. 1) and, secondly, a declaration of the inapplicability to the applicant of Article 12 of Decision 2010/43 and Article 35 of Regulation No 267/2012,
THE GENERAL COURT (Seventh Chamber),
composed of M. van der Woude (Rapporteur), President, I. Wiszniewska-Białecka and I. Ulloa Rubio, Judges,
Registrar: N. Rosner, Administrator,
having regard to the written procedure and further to the hearing on 27 February 2014,
gives the following
Judgment
Background to the dispute
1 The applicant, Moallem Insurance Co., is an insurance company established in Iran.
2 This case has 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 (‘nuclear proliferation’).
3 On 26 July 2010 the Council of the European Union 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 that decision contains the list of persons, entities and bodies, other than those designated by the United Nations Security Council or by the Sanctions Committee created by Resolution 1737 (2006), whose assets are to be frozen pursuant to Article 20(1)(b) of that decision.
4 Article 12(1) of Decision 2010/413 read as follows:
‘The provision of insurance and re-insurance to the Government of Iran, or to entities incorporated in Iran or subject to Iran’s jurisdiction, or to any individuals or entities acting on their behalf or at their direction, or to entities owned or controlled by them, including through illicit means, shall be prohibited’.
5 Consequently, under the FEU Treaty, on 25 October 2010 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).
6 On 23 January 2012 the Council adopted Decision 2012/35/CFSP amending Decision 2010/413 (OJ 2012 L 19, p. 22). Article 1(7) of that decision amended Article 20 of Decision 2010/413.
7 On 23 March 2012 the Council adopted Regulation (EU) No 267/2012 on restrictive measures against Iran and repealing Regulation (EU) No 961/2010 (OJ 2012 L 88, p. 1). Article 35 of Regulation No 267/2012 contains provisions analogous to those of Article 12 of Decision 2010/413. Article 23(2) of Regulation No 267/2012 reads as follows:
‘2. All funds and economic resources belonging to, owned, held or controlled by the persons, entities and bodies listed in Annex IX shall be frozen. Annex IX shall include the natural and legal persons, entities and bodies who, in accordance with Article 20(1)(b) of Council Decision 2010/413/CFSP, have been identified as:
(a) 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;
(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);
…
(e) being a legal person, entity or body owned or controlled by the Islamic Republic of Iran Shipping Lines (IRISL), or acting on their behalf.’
8 On 15 October 2012 the Council adopted Decision 2012/635/CFSP, amending Decision 2010/413 (OJ 2012 L 282, p. 58). Article 1(8) of that decision amended Article 20 of Decision 2010/413.
9 By Council Decision 2012/829/CFSP of 21 December 2012, amending Decision 2010/413 (OJ 2012 L 356, p. 71; ‘the contested decision’), the applicant was listed for the first time in the list of persons and entities subject to the restrictive measures set out in Annex II to Decision 2010/413.
10 Article 20(1)(b) of Decision 2010/413, as amended in turn by Decisions 2012/35, 2012/635 and 2012/829, reads as follows:
‘1. All funds and economic resources which belong to, are owned, held or controlled, directly or indirectly by the following, shall be frozen:
…
(b) 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 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 of this Decision, as well as other members and entities of IRGC and IRISL and entities owned or controlled by them or acting on their behalf or providing insurance or other essential services to them, as listed in Annex II;
…’.
11 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; ‘the contested regulation’) amended Annex IX to Regulation No 267/2012, by adding inter alia the name of the applicant.
12 The contested regulation produces, as regards the applicant, the following reason, as set out in the contested decision:
‘Main insurer of IRISL’.
13 By letter of 3 January 2013, receipt of which was acknowledged by the Iranian postal service on 23 January 2013, the Council communicated the contested decision and regulation to the applicant.
14 By letter of 6 February 2013 the applicant challenged the grounds of its listing and asked the Council to reconsider its decision and to lift all restrictive measures imposed on it. Further, the applicant asked the Council to send to it all the relevant documents on the basis of which its listing was decided, and the name of the State(s) which proposed its listing.
15 By letter of 19 June 2013 the Council replied to the applicant’s request by attaching as annexes non-confidential documents concerning its listing which were in its file, namely an extract from the proposal by a Member State for the applicant’s listing (document 5134/13), extracts from the reports of the meetings of the COMEM (Middle East/Gulf) Working Party of 9 October and 5 November 2012 (documents 6527/13 and 10832/13), the meeting document MD No 229/12 ADD 1 REV 2 RELEX and the notes of 18 December 2012 from the Secretariat to the Committee of Permanent Representatives (Coreper) and to Coreper/Council (documents 17795/12 and 17525/12 ADD 1 REV 1).
16 By letter of 5 July 2013 the Council sent to the applicant copies of documents relating to insurance contracts which the applicant had entered into with a number of companies linked to Islamic Republic of Iran Shipping Lines (‘IRISL’).
Procedure and forms of order sought by the parties
17 By application lodged at the Court Registry on 28 March 2013, the applicant brought the present action.
18 Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Seventh Chamber, to which the present case was accordingly allocated.
19 The applicant claims that the Court should:
– annul the contested decision in so far as it listed the applicant in Annex II to Decision 2010/413;
– annul the contested regulation in so far as it listed the applicant in Annex IX to Regulation No 267/2012;
– declare Article 12 of Decision 2010/413 and Article 35 of Regulation No 267/2012 to be inapplicable to it;
– order the Council to pay the costs.
20 The Council contends that the Court should:
– dismiss as being inadmissible the claim for a declaration of inapplicability;
– dismiss the action for annulment as being unfounded;
– order the applicant to pay the costs.
Law
21 In support of its form of order, the applicant relies on eight pleas in law. The first plea claims a manifest error of assessment. The second plea concerns an infringement of the obligation to state reasons, the principle of respect for the rights of the defence and the right to a fair hearing. The third plea alleges infringement of Article 24(3) and (4) of Decision 2010/413 and of Article 46(3) and (4) of Regulation No 267/2012. The fourth plea claims a breach of the principle of good administration. The fifth plea concerns a breach of the principle of protection of legitimate expectations. The sixth plea claims the illegality of Article 12 of Decision 2010/413 and Article 35 of Regulation No 267/2012. The seventh plea claims an infringement of Article 215(2) and (3) TFEU, as the legal basis of Regulation No 267/2012, and of Article 40 TEU. The eighth plea claims infringement of the principles of equal treatment and non-discrimination.
22 Before addressing the substance of the dispute, it is appropriate to assess the admissibility of the applicant’s third head of claim, and the sixth plea in law relating thereto, whereby the applicant raises a plea of illegality in respect of Article 12 of Decision 2010/413 and Article 35 of Regulation No 267/2012, in order to obtain the annulment of the contested decision and regulation.
Admissibility of the applicant’s third head of claim
23 By the applicant’s third head of claim, it claims that the General Court should declare Article 12 of Decision 2010/413 and Article 35 of Regulation No 267/2012 to be inapplicable to it.
24 The Council stated in its defence, and confirmed at the hearing, that no measure concerning the applicant had been adopted on the basis of the abovementioned articles, which essentially prohibited the supply, by European Union operators, of insurance and re-insurance services to Iranian persons or bodies (see paragraphs 4 to 7 above).
25 According to settled case-law, Article 277 TFEU expresses a general principle conferring upon any party to proceedings the right to challenge, for the purposes of obtaining the annulment of a decision which is addressed to or which is of direct and individual concern to that party, the validity of previous acts of the institutions which form the legal basis of the decision under challenge, if that party was not entitled under Article 263 TFEU to bring a direct action challenging those acts (see, to that effect, Case 92/78 Simmenthal v Commission [1979] ECR 777, paragraphs 39 and 40). The general measure claimed to be illegal must be applicable, directly or indirectly, to the issue with which the action is concerned and there must be a direct legal connection between the contested individual decision and the general measure in question (see Case T‑23/99 LR AF 1998 v Commission [2002] ECR II‑1705, paragraph 273 and case-law cited).
26 In this case, suffice it therefore to state that, since there is no connection between the contested decision and regulation, on the one hand, and Article 12 of Decision 2010/413 and Article 35 of Regulation No 267/2012, on the other, the plea of illegality brought against those articles, by the sixth plea in law, must be declared to be inadmissible.
27 Further, even if the third head of claim can be interpreted as an application which is independent of the applications for annulment and which seeks a declaratory judgment, such an application would have to be rejected on grounds of manifest lack of jurisdiction, since Article 263 TFEU does not confer jurisdiction on the Courts of the European Union to rule on a declaratory basis (order of 25 November 2008 in Case C‑500/07 P TEA v Commission, paragraph 33).
28 In the light of all the foregoing, the applicant’s third head of claim must be rejected as being inadmissible.
The first plea in law: manifest error of assessment
29 The applicant denies that it is the main insurer of IRISL. It states that its ownership structure and its composition are not those of a company which is capable of being the main insurer of IRISL. The applicant adds that the Council has produced no evidence in support of its allegations.
30 The Council contends that the documents which it sent to the applicant, by letters of 19 June and 5 July 2013, indicate that the applicant did enter into insurance contracts with numerous listed entities which are owned or controlled by IRISL.
31 The effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires 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 (Joined Cases C‑584/10 P, C‑593/10 P and C‑595/10 P Commission v Kadi (‘Kadi II’) [2013] ECR, paragraph 119).
32 It is the task of the competent European Union 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 shall disregard that reason as a possible basis for the contested decision to list or maintain a listing (see Kadi II, paragraphs 121 to 123).
33 However, in order to assess whether the listing of the person is well founded, it is for the Courts of the European Union, first, to determine the evidence which may be taken into consideration having regard, on the one hand, to the content of the Council’s file and to the requirements linked to the rights of the defence and the right to effective judicial protection and, on the other, any overriding considerations to do with the security of the European Union or of its Member States or with the conduct of their international relations.
34 It must be borne in mind that the legality of the contested measure may be assessed only on the basis of the elements of fact and of law on which it was adopted and not on the basis of information which was brought to the Council’s knowledge after the adoption of that measure (Case T‑63/12 Oil Turbo Compressor v Council [2012] ECR, paragraph 29).
35 Further, the Council cannot validly rely, before the Court, on evidence which was not communicated to the applicant, at its request, before the bringing of the action (Joined Cases T‑35/10 and T‑7/11 Bank Melli Iran v Council [2013] ECR, paragraphs 99 to 102). To allow such a possibility would be contrary to the fundamental right to respect for the rights of the defence and to the right to effective judicial protection (judgment of 12 December 2013 in Case T‑58/12 Nabipour and Others v Council, paragraph 79).
36 However, overriding considerations to do with the security of the European Union or of its Member States or the conduct of their international relations may preclude the disclosure of some information or some evidence to the person concerned (Kadi II, paragraph 125).
37 In such circumstances, it is then for the Council to establish that the security of the European Union or of its Member States or the conduct of their international relations would in fact be jeopardised by disclosure to the person concerned of all the incriminating information and evidence which constitute the basis for a decision on restrictive measures (see, by analogy, Case C‑300/11 ZZ [2013] ECR, paragraph 61).
38 Where the Council claims that some information is confidential, it is for the Courts of the European Union to determine whether the reasons relied on by the Council as grounds to preclude the disclosure of that information to the person or entity concerned are well founded (see, to that effect, Kadi II, paragraph 126).
39 If it turns out that the reasons relied on by the Council of the European Union do indeed preclude the disclosure to the person concerned of information or evidence produced before the Courts of the European Union, it is necessary to strike an appropriate balance between the requirements attached to the right to effective judicial protection, in particular respect for the principle of an adversarial process, and those flowing from the security of the European Union or its Member States or the conduct of their international relations (Kadi II, paragraph 128).
40 In this case, first, it must be observed that the applicant requested the Council, by letter of 6 February 2013, in other words, almost two months before the expiry of the period for bringing proceedings, to send to it the information contained in the Council’s file. However, the Council did not satisfy that request until after the bringing of this action, by letters of 19 June and 5 July 2013, that is, almost five months after that request.
41 Secondly, the Council has not pleaded any reason to do with the security of the European Union or its Member States or the conduct of their international relations which might preclude the communication of material contained in the letters of 19 June and 5 July 2013.
42 In that context, since the material contained in the letters of 19 June and 5 July 2013 was communicated to the applicant only after the bringing of this action, it cannot be taken into consideration as grounds to justify the applicant’s listing, pursuant to the case-law cited in paragraph 35 above. Further, it is clear that the material contained in the letter of 19 June 2013 and its annexes does not, in any event, constitute information which adds anything to the reasons contained in the contested acts.
43 Third, in reply to a written question from the Court, the Council stated that all the information and evidence taken into consideration, at the time of adoption of the contested measures in so far as they concerned the applicant, were communicated to the applicant as annexes to the letter of 19 June 2013.
44 It is thereby evident that the insurance contracts subsequently sent to the applicant, as annexes to the letter of 5 July 2013, were not present in the Council’s file at the time when the applicant was listed.
45 Accordingly, the applicant is correct to argue that those contracts cannot validly be relied on by the Council before the Court. Not only were those contracts not communicated to the applicant in good time, as found in paragraph 42 above, but they were also not known to the Council before the date of adoption of the contested decision and regulation.
46 For all those reasons, only the material produced in the statement of reasons in the contested decision and regulation may be taken into consideration by the Court, in order to assess whether the listing of the applicant was well founded.
47 However, since, in the statement of reasons for the listing of the applicant, the Council does no more than assert that the applicant is the main insurer of IRISL, which the applicant denies, and since the Council has not validly adduced any evidence to support that assertion, it is clear that that listing is based on an allegation which is unsupported.
48 Accordingly, the applicant’s listing must be held to be vitiated by an error of assessment.
49 In the light of all the foregoing, the contested decision and regulation must be annulled, in so far as they concern the applicant, and there is no need to examine the other pleas in law put forward by the applicant.
The temporal effects of the annulment of the contested regulation and decision
50 In their written pleadings, neither the applicant nor the Council expressed any view on the temporal effects of any annulment of the contested regulation and decision.
51 In response to a question from the Court, the Council claimed, at the hearing, that the second paragraph of Article 60 of the Statute of the Court of Justice of the European Union, which provides that a regulation may remain in force after its annulment, until the expiry of the period for bringing an appeal or, if an appeal has been brought in that period, until the dismissal of the appeal by the Court of Justice, must apply in this case, in accordance with the principle of legal certainty. The Council argued that it was necessary to ensure that, in the event that an appeal was brought before the Court of Justice and that Court set aside the judgment of the General Court, first, no economic loss should be suffered by third parties and, second, the applicant should not, following the judgment of the General Court, remove its assets, which would deprive any appeal of any value.
52 The applicant requested, at the hearing, that the annulment of the contested regulation and decision should take effect immediately. The applicant argued that the listing of a person or entity has the nature of an individual decision.
53 That request of the applicant cannot be accepted.
54 There is no need to examine whether the decision to include the name of the applicant in the lists at issue has the nature of a regulation for the purposes of the second paragraph of Article 60 of the Statute of the Court of Justice, since it is sufficient to observe that under the second paragraph of Article 264 TFEU the Courts of the European Union may, in any event, state, where it is considered necessary, which of the effects of the act which they have declared void are to be considered as definitive. In that regard, it follows from the case-law that the General Court may decide, on the basis of that provision, the date when its annulling judgments are to take effect (see, to that effect, Nabipour and Others v Council, paragraphs 250 and 251).
55 In the circumstances of this case, the Court considers, for the reasons set out below, that it is necessary to suspend the effects of this judgment until the date of expiry of the period for bringing an appeal stated in the first paragraph of Article 56 of the Statute of the Court of Justice or, if an appeal has been brought within that period, until the dismissal of the appeal.
56 The nuclear programme pursued by the Islamic Republic of Iran is a source of serious concerns at both the international and European levels. That is the background to the Council’s gradual extension of the number of restrictive measures adopted against that State, in order to hinder the development of activities which jeopardise peace and international security, in the context of implementation of United Nations Security Council resolutions.
57 Consequently, the applicant’s interest in ensuring that this annulling judgment should take effect immediately must be weighed against the objective of general interest pursued by the European Union’s policy in relation to restrictive measures against the Islamic Republic of Iran. The adjustment of the temporal effects of the annulment of a restrictive measure may thus be justified by the need to ensure that the restrictive measures are effective and, in short, by overriding considerations to do with security or the conduct of the international relations of the European Union and of its Member States (see, by analogy with there being no obligation to inform the person or entity concerned beforehand of the grounds for an initial listing, Case C‑27/09 P France v People’s Mojahedin Organization of Iran [2011] ECR I‑13427, paragraph 67).
58 The annulment with immediate effect of the contested regulation and decision in so far as they concern the applicant would enable the applicant to transfer all or part of its assets outside the European Union, without the Council being able if appropriate to apply in good time Article 266 TFEU with a view to correcting the irregularities identified in this judgment, and consequently the effectiveness of any freezing of assets in relation to the applicant which might, in the future, be decided on by the Council might be seriously and irreversibly prejudiced.
59 As regards the application of Article 266 TFEU in this case, it must be observed that the annulment by this judgment of the applicant’s listing stems from the fact that the reasons stated for that listing are not supported by sufficient evidence (see paragraph 47 and 48 above). Although it is for the Council to decide on what measures to adopt to comply with this judgment, a further listing of the applicant cannot automatically be ruled out. In the course of a further review, the Council has the possibility of again listing the applicant on the basis of reasons which are supported to the requisite legal standard.
60 It follows that the effects of the contested decision and regulation must be maintained as regards the applicant, until the date of expiry of the period for bringing an appeal or, if an appeal is brought within that period, until the dismissal of the appeal.
Costs
61 Under Article 87(2) of the Court’s Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been asked for in the successful party’s pleadings. Since the Council has essentially been unsuccessful, it must be ordered to pay the costs of the present proceedings, in accordance with the form of order sought by the applicant.
On those grounds,
THE GENERAL COURT (Seventh Chamber)
hereby:
1. Annuls Council Decision 2012/829/CFSP of 21 December 2012, amending Decision 2010/413/CFSP concerning restrictive measures against Iran, in so far as it listed Moallem Insurance Co. in Annex II to Council Decision 2010/413/CFSP of 26 July 2010 concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP;
2. Annuls Council Implementing Regulation (EU) No 1264/2012 of 21 December 2012 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran, in so far as it listed Moallem Insurance Co. in Annex IX to Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2010;
3. Orders the effects of Decision 2012/829 and Implementing Regulation No 1264/2012 to be maintained as regards Moallem Insurance Co. until the date of expiry of the period for bringing an appeal stated in the first paragraph of Article 56 of the Statute of the Court of Justice of the European Union or, if an appeal has been brought within that period, until the dismissal of the appeal;
4. Orders the Council of the European Union to bear its own costs and to pay the costs of Moallem Insurance Co..
Van der Woude | Wiszniewska-Białecka | Ulloa Rubio |
Delivered in open court in Luxembourg on 10 July 2014.
[Signatures]