Case T‑95/14

(publication by extracts)

Iranian Offshore Engineering & Construction Co.

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 — Error of assessment — Obligation to state reasons — Right to effective judicial protection — Misuse of power — Right to property — Equal treatment)

Summary — Judgment of the General Court (Seventh Chamber), 25 June 2015

1.      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

(Council Decisions 2010/413/CFSP and 2013/661/CFSP; Council Regulations No 267/2012 and No 1154/2013)

2.      European Union — Judicial review of the legality of the acts of the institutions — Restrictive measures against Iran — Ambit of the review — Exclusion of matters brought to the knowledge of the institution after the adoption of the contested decision

(Council Decision 2013/661/CFSP; Council Regulation No 1154/2013)

3.      Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Logistical support for the Iranian Government — Concept — Activity likely, by its quantitative and qualitative significance, to favour nuclear proliferation by allowing the Iranian Government to meet specific logistical needs — Included

(Council Decisions 2010/413/CFSP and 2013/661/CFSP; Council Regulations No 267/2012 and No 1154/2013)

1.      With regard to restrictive measures against Iran, such as the freezing of funds of entities providing support to the Iranian Government, the criterion of financial support to that government relates not to every form of support, but only to forms of support which, by their quantitative or qualitative significance, contribute to the pursuit of Iran’s nuclear activities.

Such support may result, inter alia, from capital links connecting an undertaking to the Iranian State, with the consequence that the latter ultimately benefits from the dividends and capital gains deriving from the activities carried out by that undertaking.

(see paras 43, 44)

2.      See the text of the decision.

(see para. 46)

3.      The definition of ‘logistics’ referred to in Article 20(1)(c) of Decision 2010/413 and Article 23(2)(d) of Regulation No 267/2012 must be regarded as not being limited to the activities of transporting goods or persons. That term is commonly understood as including any activity that relates to the organisation and implementation of a complex operation or process. Logistics is thus a transversal concept which may include different types of operations, such as the supply of raw materials, materials management, the delivery of goods or even handling. Accordingly, it is necessary to regard as logistical support within the meaning of the abovementioned provisions any activity which — even though it has, in itself, no direct or indirect link with nuclear proliferation — is nevertheless likely, by its quantitative and qualitative significance, to favour nuclear proliferation by allowing the Iranian Government to meet specific logistical needs, as in the present case in the oil and gas sector, which generates substantial revenue for that government.

Engineering, construction and maintenance activities of an entity active in the engineering, construction and installation of infrastructure, on land and at sea, for oil and gas projects, which presents itself as the leading Iranian contractor in the field of the construction and installation of offshore infrastructures, are indispensable to the proper functioning of Iran’s oil and gas industry. Without drilling, extraction and transportation installations, in particular oil and gas pipelines, that industry cannot operate. That entity’s installations and activities, by their qualitative and quantitative significance, are therefore required to meet the needs of the oil and gas sector in Iran, which is controlled by the Iranian Government through various State-owned undertakings. Such logistical support provided by that entity therefore fulfils the criterion laid down in Article 20(1)(c) of Decision 2010/413 and Article 23(2)(d) of Regulation No 267/2012, since, according to recital 22 of Decision 2010/413 and recital 8 of Decision 2012/35, Iran derives substantial revenues from its energy sector, which allow it to fund its proliferation-sensitive nuclear activities.

The Council therefore commits no error of assessment by including the name of such an entity in the lists of sanctioned persons and entities on the ground that it provides logistical support to the Iranian Government.

(see paras 53-55)