Case T‑564/12
Ministry of Energy of Iran
v
Council of the European Union
(Common foreign and security policy — Restrictive measures adopted against Iran with the aim of preventing nuclear proliferation — Freezing of funds — Obligation to state reasons — Rights of the defence — Right to effective judicial protection — Error of assessment — Breach of fundamental rights — Proportionality)
Summary — Judgment of the General Court (First Chamber), 8 September 2015
1. Actions for annulment — Natural or legal persons — Locus standi — Action by an organisation without legal personality, subject to restrictive measures — Admissibility
(Art. 263, fourth para., TFEU; Council Decisions 2010/413/CFSP and 2012/635/CFSP; Council Regulations No 267/2012 and No 945/2012)
2. 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 — Minimum requirements
(Art. 296 TFEU; Council Decisions 2010/413/CFSP and 2012/635/CFSP; Council Regulations No 267/2012 and No 945/2012)
3. EU law — Principles — Rights of defence — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Right of access to documents — Right subject to request for access being made to the Council
(Council Decisions 2010/413/CFSP and 2012/635/CFSP; Council Regulations No 267/2012 and No 945/2012)
4. EU law — Principles — Rights of defence — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Obligation to communicate the incriminating evidence at the same time as the adoption of the measure affecting those parties, or immediately thereafter — Persons concerned taking a position following the adoption of the contested measures — Legislation imposing an obligation on the Council to review its decision after the position taken — Duty to act within a reasonable time — Infringement — Consequences
(Council Decisions 2010/413/CFSP, Art. 24(2) to (4), and 2012/635/CFSP; Council Regulations No 267/2012, Art. 46(3) and (4), and No 945/2012)
5. European Union — Judicial review of the legality of the acts of the institutions — Restrictive measures against Iran — Measures in the context of the fight against nuclear proliferation — Ambit of the review
(Charter of Fundamental Rights of the European Union, Art. 47; Council Decisions 2010/413/CFSP and 2012/635/CFSP; Council Regulations No 267/2012 and No 945/2012)
6. Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Financial support for the Iranian Government — Concept — Electricity exporting activities — Included — Loss-making supply of services in the public interest — Irrelevant
(Council Decisions 2010/413/CFSP and 2012/635/CFSP; Council Regulations No 267/2012 and No 945/2012)
7. Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Restriction of the right to property — No breach of principle of proportionality
(Charter of Fundamental Rights of the European Union, Art. 17; Council Decisions 2010/413/CFSP and 2012/635/CFSP; Council Regulations No 267/2012 and No 945/2012)
1. Under the fourth paragraph of Article 263 TFEU, an action for annulment may be brought by any natural or legal person.
In the context of an action for partial annulment of certain restrictive measures against Iran, if the Council takes the view that a ministry of the Iranian Government, which has no legal personality distinct from that of the said government, has an existence sufficient for it to be subject to restrictive measures, it must be accepted, on grounds of consistency and justice, that that entity has an existence sufficient to contest those measures. The effect of any other conclusion would be that an organisation could be included in the list of entities subject to restrictive measures without being able to bring an action challenging its inclusion.
Moreover, by expressly targeting not only persons, but also entities and bodies, a regulation concerning the adoption of such restrictive measures thus expressly contemplates that the restrictive measures may be directed against entities which do not have their own legal personality.
(see paras 21-24)
2. See the text of the decision.
(see paras 32-37)
3. See the text of the decision.
(see para. 59)
4. In the case of a regulation placing an obligation on the Council to review the presence of a person or entity on the list of persons and entities covered by restrictive measures against Iran when the latter has made observations, following notification by the Council of its decision to make the entry, such review should have taken place within a reasonable time in the absence of a specific time-limit.
That being so, when considering the reasonableness of the period elapsed, it must be borne in mind that the observations in question constituted the first opportunity for the applicant to put forward its point of view with respect to the justification for the inclusion of its name on the lists at issue, as a result of which it had a specific interest in the Council conducting the review and informing it of the outcome. The Council is not required first to communicate to the person or entity concerned the grounds on which it intends to include the latter on the list of persons and entities whose funds are to be frozen, since such a measure, in order not to compromise its effectiveness, must, by its very nature, be able to benefit from a surprise effect and apply immediately. In such a case, it is sufficient, in principle, for the institution to notify the grounds to the person or entity concerned and open its right to a hearing at the same time as, or immediately after, it adopts the decision.
Where a response of the Council is sent more than 15 months after the person or entity concerned submitted its first observations, it must be concluded that it clearly took the Council a manifestly unreasonable length of time to respond to the observations.
However, in so far as the Council’s response serves the objective of the obligation in question, namely to ensure that the restrictive measures relating to a person or entity are warranted at the time they are adopted, the infringement of defence rights in question does not justify the annulment of the acts whereby those restrictive measures were adopted, since that infringement no longer produces adverse effects on the situation of the person or entity concerned.
(see paras 64, 70-76)
5. See the text of the decision.
(see paras 81-85)
6. Concerning restrictive measures against Iran, such as the freezing of funds of entities providing support to the Iranian Government, the criterion of support for that government is aimed at the relevant person’s or entity’s own activity, which, even if it has no actual direct or indirect connection with nuclear proliferation, is none the less capable of encouraging it by providing the Iranian Government with resources or facilities of a material, financial or logistic nature which allow it to pursue proliferation activities. Thus, that criterion covers forms of support which, by their quantitative or qualitative significance, contribute to the pursuit of Iran’s nuclear activities. Its objective is to deprive the Iranian Government of its sources of revenue, in order to oblige it to end the development of its nuclear proliferation programme, as a result of insufficient financial resources.
The activities of a ministry of the Iranian Government in exporting electricity, in particular in so far as it collects the amounts paid by buyers of exported electricity, provide a source of income to the Iranian Government and thus constitute support for the latter, in the form of financial support.
The fact that that ministry provides services of public interest which are loss-making does not mean that its electricity export activities cannot be classified as a form of financial support for the Iranian Government, or cannot, consequently, warrant the adoption of restrictive measures against it.
That ministry’s electricity export activities differ from its other functions, in that they do not constitute a service of public interest provided to the Iranian people. Therefore, there is no intrinsic link between all the activities and functions of the applicant such as to require that they be considered as a whole. That is particularly so since the financial resources generated by the electricity export activities in question are not subject to any specific budgetary allocation.
Similarly, if the definition of an entity providing financial support to the Iranian Government were restricted to entities whose activities are profitable as a whole, it would be possible to circumvent the purpose of the restrictive measures in question, which would thus have an impact on their effectiveness. In order to avoid the application of such measures, it would suffice to give each entity concerned, in addition to its functions and income-generating activities, functions and activities entailing a loss in a comparable amount.
Furthermore, the freezing of the ministry’s funds, on the ground of its electricity export activities, is consistent with the objective of depriving the Iranian Government of its sources of revenue, irrespective of whether the ministry’s other activities are loss-making. As a result of the freezing of those funds, the Iranian Government, of which the ministry is an integral part, is deprived of the enjoyment of part of the financial resources necessary for carrying out its activities as a whole, including those outside the ministry’s purview which are related to nuclear proliferation.
Consequently, the key question in assessing whether the ministry provides financial support to the Iranian Government is not its overall profitability, but whether its electricity export activities are profitable.
(see paras 88-91, 93-97)
7. See the text of the decision.
(see paras 113, 114, 116-118)