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Note: On 23 December 2006, the United Nations Security Council adopted a resolution that stated the resources of a person or entity involved in nuclear proliferation would be put on an Annex list, and would be sanctioned accordingly. On 27 February 2007, the European Council (Respondent) adopted Common Position 2007/140/CFSP, which placed sanctions on Bank of Saderat (Petitioner) in order to implement Resolution 1737 (2006) in the European Union. On 19 April 2007, the restrictive measures against Iran were adopted and put into effect in the European Union.

On 17 June 2010, Respondent adopted Security Council Resolution 1929 and introduced financial restriction measures. Petitioner was added to the Annex list because it was more than 94% owned by the Iranian government, and was suspected of issuing letters of credit to fund Iran’s nuclear missile program. Petitioner contacted Respondent multiple times in August and September of 2010 to remove its name from the Annex list and to cease all associated sanctions. The decision was reviewed and, on 25 October, Respondent rejected the appeal and instead added Petitioner to Annex IX, imposing stricter sanctions.

Petitioner filed for an annulment of Respondent’s decision to add Petitioner to Annex IX on 7 October 2010 in the General Court of the European Union. The court rejected Respondent’s argument that Petitioner was not entitled to fundamental rights protection and grantees. The court then examined Petitioner’s claims that: 1) Respondent infringed on its obligation to state reasons for and its rights of defense and effective judicial protection; 2) there was a manifest error of assessment as regards Respondent’s adoption of restrictive measures against it; and 3) Respondent violated the proportionality principle. The General Court ruled in favor of Petitioner, upholding the first and second claims. The third claim was consequently not examined. The General Court found that Respondent did not have enough evidence to show Petitioner, through LCs or otherwise, had supported nuclear proliferation. The General Court ruled to keep sanctions until the expiration date.

Respondent appealed to annul the judgment of the General Court on 5 February 2013 in the European Union Court of Justice. Respondent argued that the General Court erred in judgment when it held (1) Petitioner cannot bring the proceedings under Article 34 of the European Convention for the Protection of Human Rights and Fundamental Freedoms; (2) that the services Petitioner conducts help Iran’s economy and that the Iranian Government wields significant influence over Petitioner, which assists in Iran’s nuclear proliferation; (3) and that the EU authority has proof of Petitioner’s involvement that is considered confidential and can’t be shared with the courts, which should give Respondent authority to judge Petitioner’s inclusion on the Annex list. Petitioner responded that the appeal should be rejected because (1) under the scope of the “second paragraph of Article 275 TFEU and fourth paragraph of Article 263 TFEU” it could bring the case, (2) not allowing it to bring the case would be an infringement of its rights of defense and effective judicial protection and (3) it reiterated its previous three pleas to the General Court. Petitioner also cross appealed to have its name taken off the Annex list and regulations stopped instantly, instead of waiting until the time period expired.

The European Union Court of Justice upheld the General Court’s decision, and held that an entity of a non-member State had the rights of defense and judicial protection, listing Petitioner in the Annex list because it was owned by Iran was not a strong enough reason, and there was not enough evidence of Petitioner’s involvement in any LCs or financial assistance in support of nuclear proliferation. The main appeal was upheld because confidential information would not be weighed to consider Petitioner’s inclusion on the list, and the LCs were not enough to prove that Petitioner supported Iran’s nuclear proliferation efforts. The Court of Justice dismissed Petitioner’s cross-appeal because the suspensory effect only starts after the expiration of the period for the appeal, and that, under the Annex IX, the regulations had to be binding until the time period was suspended.

[GAC]

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