# 62012TJ0564

JUDGMENT OF THE GENERAL COURT (First Chamber)

8 September 2015 (
  *1
  )

*1

‛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’

In Case T‐564/12,

Ministry of Energy of Iran, established in Tehran (Iran), represented by M. Lester, Barrister,

Ministry of Energy of Iran

applicant,

v

Council of the European Union, represented by M. Bishop and A. De Elera, acting as Agents,

Council of the European Union

defendant,

ACTION for partial annulment of Council Decision 2012/635/CFSP of 15 October 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2012 L 282, p. 58) and of Council Implementing Regulation (EU) No 945/2012 of 15 October 2012 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran (OJ 2012 L 282, p. 16),

THE GENERAL COURT (First Chamber),

composed of H. Kanninen, President, I. Pelikánová (Rapporteur) and E. Buttigieg, Judges,

Registrar: L. Grzegorczyk, Administrator,

having regard to the written procedure and further to the hearing on 25 November 2014,

gives the following

Judgment

Judgment

Background to the dispute

Background to the dispute

| 1 | The applicant is the Ministry of Energy of Iran, responsible inter alia for supplying and managing water, electricity, energy and waste water services in Iran. |
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1

The applicant is the Ministry of Energy of Iran, responsible inter alia for supplying and managing water, electricity, energy and waste water services 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’). |
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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 | Pursuant to Council Decision 2012/635/CFSP of 15 October 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2012 L 282, p. 58), the applicant’s name was entered on the list of entities involved in Iranian nuclear proliferation 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). |
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3

Pursuant to Council Decision 2012/635/CFSP of 15 October 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2012 L 282, p. 58), the applicant’s name was entered on the list of entities involved in Iranian nuclear proliferation 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).

| 4 | Consequently, pursuant to Council Implementing Regulation (EU) No 945/2012 of 15 October 2012 implementing Regulation (EU) No 267/2012 on restrictive measures against Iran (OJ 2012 L 282, p. 16), the applicant’s name was included in the list in Annex IX to Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2012 (OJ 2012 L 88, p. 1). |
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4

Consequently, pursuant to Council Implementing Regulation (EU) No 945/2012 of 15 October 2012 implementing Regulation (EU) No 267/2012 on restrictive measures against Iran (OJ 2012 L 282, p. 16), the applicant’s name was included in the list in Annex IX to Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2012 (OJ 2012 L 88, p. 1).

| 5 | The effect of the inclusion of the applicant’s name on the list in Annex II to Decision 2010/413 and on that in Annex IX to Regulation No 267/2012 was the freezing of its funds and economic resources. |
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5

The effect of the inclusion of the applicant’s name on the list in Annex II to Decision 2010/413 and on that in Annex IX to Regulation No 267/2012 was the freezing of its funds and economic resources.

| 6 | With respect to the applicant, Decision 2012/635 and Implementing Regulation No 945/2012 stated the following reasons:
  ‘Responsible for policy in the energy sector, which provides a substantial source of revenue for the Iranian Government.’ |
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6

With respect to the applicant, Decision 2012/635 and Implementing Regulation No 945/2012 stated the following reasons:

‘Responsible for policy in the energy sector, which provides a substantial source of revenue for the Iranian Government.’

| 7 | By letter of 16 October 2012, the Council of the European Union informed the applicant of the inclusion of its name on the list in Annex II to Decision 2010/413 and the list in Annex IX to Regulation No 267/2012. |
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7

By letter of 16 October 2012, the Council of the European Union informed the applicant of the inclusion of its name on the list in Annex II to Decision 2010/413 and the list in Annex IX to Regulation No 267/2012.

| 8 | Also on 16 October 2012, the Council published in the Official Journal a Notice for the attention of the person to which restrictive measures provided for in Decision 2010/413, as implemented by Decision 2012/635, and in Regulation No 267/2012, as implemented by Implementing Regulation No 945/2012, apply (OJ 2012 C 312, p. 21). In that notice, the persons concerned were informed inter alia of the fact that they could submit to the Council a request for review of the inclusion of their names on the lists at issue. |
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8

Also on 16 October 2012, the Council published in the Official Journal a Notice for the attention of the person to which restrictive measures provided for in Decision 2010/413, as implemented by Decision 2012/635, and in Regulation No 267/2012, as implemented by Implementing Regulation No 945/2012, apply (OJ 2012 C 312, p. 21). In that notice, the persons concerned were informed inter alia of the fact that they could submit to the Council a request for review of the inclusion of their names on the lists at issue.

| 9 | By letter of 8 December 2012, the applicant challenged the validity of the inclusion of its name on the lists at issue and requested the Council to reconsider that listing. It also requested access to the information and evidence supporting that listing. |
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9

By letter of 8 December 2012, the applicant challenged the validity of the inclusion of its name on the lists at issue and requested the Council to reconsider that listing. It also requested access to the information and evidence supporting that listing.

| 10 | On 11 December 2012, the Council published in the Official Journal a Notice for the attention of the persons and entities to which restrictive measures provided for in Decision 2010/413 and in Regulation No 267/2012 apply (OJ 2012 C 380, p. 7). That notice stated that the persons and entities concerned could submit to the Council, before 31 January 2013, their observations to be taken into consideration for the purpose of the periodic review of the list of designated persons and entities. |
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10

On 11 December 2012, the Council published in the Official Journal a Notice for the attention of the persons and entities to which restrictive measures provided for in Decision 2010/413 and in Regulation No 267/2012 apply (OJ 2012 C 380, p. 7). That notice stated that the persons and entities concerned could submit to the Council, before 31 January 2013, their observations to be taken into consideration for the purpose of the periodic review of the list of designated persons and entities.

| 11 | By letter of 31 January 2013, sent in response to the notice of 11 December 2012, the applicant renewed its request for review. |
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11

By letter of 31 January 2013, sent in response to the notice of 11 December 2012, the applicant renewed its request for review.

| 12 | By letter of 12 March 2013, the Council replied to the applicant’s request for access to the file, sending it a copy of a proposal dated 19 September 2012 for the adoption of restrictive measures, together with records of meetings of Council preparatory bodies. |
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12

By letter of 12 March 2013, the Council replied to the applicant’s request for access to the file, sending it a copy of a proposal dated 19 September 2012 for the adoption of restrictive measures, together with records of meetings of Council preparatory bodies.

| 13 | By letter of 14 March 2014, the Council replied to the applicant’s letter of 31 January 2013. In its letter, the Council stated that, in its view, the restrictive measures relating to the applicant were still justified for the reasons given in the statement of reasons for the contested measures. The Council noted in that regard that, according to data published by the applicant, electricity exports for which it was responsible generated substantial revenue. |
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13

By letter of 14 March 2014, the Council replied to the applicant’s letter of 31 January 2013. In its letter, the Council stated that, in its view, the restrictive measures relating to the applicant were still justified for the reasons given in the statement of reasons for the contested measures. The Council noted in that regard that, according to data published by the applicant, electricity exports for which it was responsible generated substantial revenue.

Procedure and forms of order sought

Procedure and forms of order sought

| 14 | The applicant brought the present action by application lodged at the Registry of the General Court on 26 December 2012. |
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14

The applicant brought the present action by application lodged at the Registry of the General Court on 26 December 2012.

| 15 | In the context of measures of organisation of procedure provided for in Article 64 of the Rules of Procedure of the General Court of 2 May 1991, the parties were requested, by letter of 30 September 2014, to reply in writing to certain questions and to submit certain documents. The Council and the applicant submitted their responses, respectively, on 20 October and on 5 November 2014. |
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15

In the context of measures of organisation of procedure provided for in Article 64 of the Rules of Procedure of the General Court of 2 May 1991, the parties were requested, by letter of 30 September 2014, to reply in writing to certain questions and to submit certain documents. The Council and the applicant submitted their responses, respectively, on 20 October and on 5 November 2014.

| 16 | The parties presented oral argument and replied to the Court’s oral questions at the hearing on 25 November 2014. |
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16

The parties presented oral argument and replied to the Court’s oral questions at the hearing on 25 November 2014.

| 17 | The applicant claims that the Court should:





  — | annul Decision 2012/635 and Implementing Regulation No 945/2012 in so far as those measures apply to it; |
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17

The applicant claims that the Court should:

—

annul Decision 2012/635 and Implementing Regulation No 945/2012 in so far as those measures apply to it;

| — | order the Council to pay the costs. |
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—

order the Council to pay the costs.

| 18 | The Council contends that the Court should:





  — | dismiss the action; |
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18

The Council contends that the Court should:

—

dismiss the action;

| — | order the applicant to pay the costs. |
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—

order the applicant to pay the costs.

| 19 | In its written pleadings, the Council also alleged that the present action was inadmissible, inasmuch as the applicant, as an emanation of the Iranian Government, did not have standing to invoke a breach of its fundamental rights. However, the Council withdrew that plea of inadmissibility at the hearing. |
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19

In its written pleadings, the Council also alleged that the present action was inadmissible, inasmuch as the applicant, as an emanation of the Iranian Government, did not have standing to invoke a breach of its fundamental rights. However, the Council withdrew that plea of inadmissibility at the hearing.

Law

Law

| 20 | Before examining the four pleas raised by the applicant in support of its heads of claim, it is necessary for the Court to consider of its own motion the question of the admissibility of the action with respect to the applicant’s legal status. |
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20

Before examining the four pleas raised by the applicant in support of its heads of claim, it is necessary for the Court to consider of its own motion the question of the admissibility of the action with respect to the applicant’s legal status.

Admissibility of the action

Admissibility of the action

| 21 | Under the fourth paragraph of Article 263 TFEU, an action for annulment may be brought by ‘[a]ny natural or legal person’. |
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21

Under the fourth paragraph of Article 263 TFEU, an action for annulment may be brought by ‘[a]ny natural or legal person’.

| 22 | In the present case, it is apparent from the applicant’s response to a question from the Court that, as a ministry of the Iranian Government, it does not have separate legal personality from that of the government. |
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22

In the present case, it is apparent from the applicant’s response to a question from the Court that, as a ministry of the Iranian Government, it does not have separate legal personality from that of the government.

| 23 | However, it is apparent from case-law that, since the Council took the view that the applicant had an existence sufficient for it to be subject to restrictive measures, it must be accepted, on grounds of consistency and justice, that that entity had 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 (see, by analogy, judgment of 18 January 2007 in PKK and KNK v Council, C‐229/05 P, ECR, EU:C:2007:32, paragraph 112). |
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23

However, it is apparent from case-law that, since the Council took the view that the applicant had an existence sufficient for it to be subject to restrictive measures, it must be accepted, on grounds of consistency and justice, that that entity had 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 (see, by analogy, judgment of 18 January 2007 in PKK and KNK v Council, C‐229/05 P, ECR, EU:C:2007:32, paragraph 112).

PKK and KNK

Council

| 24 | It should be further noted that the restrictive measures provided for in Decision 2010/413 and by Regulation No 267/2012 expressly target not only ‘persons’, but also ‘entities and bodies’. Thus, the applicable legislation expressly contemplates that the restrictive measures may be directed against entities which do not have their own legal personality. |
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24

It should be further noted that the restrictive measures provided for in Decision 2010/413 and by Regulation No 267/2012 expressly target not only ‘persons’, but also ‘entities and bodies’. Thus, the applicable legislation expressly contemplates that the restrictive measures may be directed against entities which do not have their own legal personality.

| 25 | In those circumstances, in order for the present action to be admissible, it is necessary to show that the applicant does indeed wish to bring it and that the lawyers who claim to represent it have in fact been instructed for that purpose (see, to that effect, judgment in PKK and KNK v Council, cited in paragraph 23 above, EU:C:2007:32, paragraph 113). |
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25

In those circumstances, in order for the present action to be admissible, it is necessary to show that the applicant does indeed wish to bring it and that the lawyers who claim to represent it have in fact been instructed for that purpose (see, to that effect, judgment in PKK and KNK v Council, cited in paragraph 23 above, EU:C:2007:32, paragraph 113).

PKK and KNK

Council

| 26 | In that regard, the authority given to the lawyer representing the applicant submitted to the Court was signed by the Minister for Energy, who confirmed at that time that he was authorised to grant such authority on behalf of the applicant. |
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26

In that regard, the authority given to the lawyer representing the applicant submitted to the Court was signed by the Minister for Energy, who confirmed at that time that he was authorised to grant such authority on behalf of the applicant.

| 27 | In those circumstances, it must be held that the present action is admissible, notwithstanding the fact that the applicant does not have separate legal personality. |
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27

In those circumstances, it must be held that the present action is admissible, notwithstanding the fact that the applicant does not have separate legal personality.

Substance

Substance

| 28 | The applicant relies on four pleas in law, alleging: first, error of assessment, secondly, breach of the obligation to state reasons, thirdly, breach of its rights of defence and of its right to effective judicial protection and, fourthly, breach of its fundamental rights and of the principle of proportionality. |
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28

The applicant relies on four pleas in law, alleging: first, error of assessment, secondly, breach of the obligation to state reasons, thirdly, breach of its rights of defence and of its right to effective judicial protection and, fourthly, breach of its fundamental rights and of the principle of proportionality.

| 29 | First of all, it is appropriate to examine the second plea in law, before examining, in turn, the third, first, and, fourth pleas. |
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29

First of all, it is appropriate to examine the second plea in law, before examining, in turn, the third, first, and, fourth pleas.

The second plea in law, alleging infringement of the obligation to state reasons

| 30 | The applicant maintains that the contested measures do not state to the requisite legal standard the reasons on which they are based. |
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30

The applicant maintains that the contested measures do not state to the requisite legal standard the reasons on which they are based.

| 31 | The Council contends that the applicant’s arguments are unfounded. |
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31

The Council contends that the applicant’s arguments are unfounded.

| 32 | According to a consistent body of case-law, the purpose of the obligation to state the reasons on which an act adversely affecting an individual is based, which is a corollary of the principle of respect for the rights of the defence, is, first, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the Courts of the European Union and, secondly, to enable those courts to review the legality of that act (see judgment of 15 November 2012 in Council v Bamba, C‐417/11 P, ECR, EU:C:2012:718, paragraph 49 and the case-law cited). |
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32

According to a consistent body of case-law, the purpose of the obligation to state the reasons on which an act adversely affecting an individual is based, which is a corollary of the principle of respect for the rights of the defence, is, first, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the Courts of the European Union and, secondly, to enable those courts to review the legality of that act (see judgment of 15 November 2012 in Council v Bamba, C‐417/11 P, ECR, EU:C:2012:718, paragraph 49 and the case-law cited).

Council

Bamba

| 33 | The statement of reasons required by Article 296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the person concerned to ascertain the reasons for the measures and to enable the court having jurisdiction to exercise its power of review (see judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 50 and the case-law cited). |
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33

The statement of reasons required by Article 296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the person concerned to ascertain the reasons for the measures and to enable the court having jurisdiction to exercise its power of review (see judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 50 and the case-law cited).

Council

Bamba

| 34 | Where the person concerned is not afforded the opportunity to be heard before the adoption of an initial decision to freeze funds, compliance with the obligation to state reasons is all the more important because it constitutes the sole safeguard enabling the person concerned, at least after the adoption of that decision, to make effective use of the legal remedies available to him in order to challenge the lawfulness of that decision (judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 51). |
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34

Where the person concerned is not afforded the opportunity to be heard before the adoption of an initial decision to freeze funds, compliance with the obligation to state reasons is all the more important because it constitutes the sole safeguard enabling the person concerned, at least after the adoption of that decision, to make effective use of the legal remedies available to him in order to challenge the lawfulness of that decision (judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 51).

Council

Bamba

| 35 | Therefore, the statement of reasons for an act of the Council which imposes a freezing of funds must identify the actual and specific reasons why the Council considers, in the exercise of its discretion, that that measure must be adopted in respect of the person concerned (judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 52). |
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35

Therefore, the statement of reasons for an act of the Council which imposes a freezing of funds must identify the actual and specific reasons why the Council considers, in the exercise of its discretion, that that measure must be adopted in respect of the person concerned (judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 52).

Council

Bamba

| 36 | The statement of reasons required by Article 296 TFEU must, however, be appropriate to the act at issue and the context in which it was adopted. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 53 and the case-law cited). |
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36

The statement of reasons required by Article 296 TFEU must, however, be appropriate to the act at issue and the context in which it was adopted. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 53 and the case-law cited).

Council

Bamba

| 37 | In particular, the reasons given for a measure adversely affecting a person are sufficient if that measure was adopted in a context which was known to that person and which enables him to understand the scope of the measure concerning him (see judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 54 and the case-law cited). |
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37

In particular, the reasons given for a measure adversely affecting a person are sufficient if that measure was adopted in a context which was known to that person and which enables him to understand the scope of the measure concerning him (see judgment in Council v Bamba, cited in paragraph 32 above, EU:C:2012:718, paragraph 54 and the case-law cited).

Council

Bamba

| 38 | In the present case, the Council gave the following reasoning in relation to the applicant:
  ‘Responsible for policy in the energy sector, which provides a substantial source of revenue for the Iranian Government.’ |
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38

In the present case, the Council gave the following reasoning in relation to the applicant:

‘Responsible for policy in the energy sector, which provides a substantial source of revenue for the Iranian Government.’

| 39 | First, the applicant argues that the statement of reasons does not make it possible to identify the criterion relied on by the Council in order to adopt the restrictive measures concerning it. Nor was such a criterion indicated subsequently. |
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39

First, the applicant argues that the statement of reasons does not make it possible to identify the criterion relied on by the Council in order to adopt the restrictive measures concerning it. Nor was such a criterion indicated subsequently.

| 40 | In that regard, it is admittedly true that the statement of reasons provided does not expressly indicate the criterion relied on by the Council. |
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40

In that regard, it is admittedly true that the statement of reasons provided does not expressly indicate the criterion relied on by the Council.

| 41 | However, the indication that the applicant is responsible for a sector providing a substantial source of revenue for the Iranian Government, read together with Article 20(1) of Decision 2010/413 and Article 23(2) of Regulation No 267/2012, which set out the different criteria permitting the adoption of restrictive measures relating to a person or entity, makes it possible to infer that the criterion adopted by the Council in this case is that relating to entities providing support to the Iranian Government. |
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41

However, the indication that the applicant is responsible for a sector providing a substantial source of revenue for the Iranian Government, read together with Article 20(1) of Decision 2010/413 and Article 23(2) of Regulation No 267/2012, which set out the different criteria permitting the adoption of restrictive measures relating to a person or entity, makes it possible to infer that the criterion adopted by the Council in this case is that relating to entities providing support to the Iranian Government.

| 42 | In those circumstances, the first complaint relied on by the applicant must be rejected. |
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42

In those circumstances, the first complaint relied on by the applicant must be rejected.

| 43 | Secondly, according to the applicant, the reasons provided are vague in that they do not state, first, why its responsibility for policy in the energy sector is relevant to the adoption of restrictive measures, next, the kind or amount of revenue concerned and, finally, the relevance of those factors to nuclear proliferation. In those circumstances, according to case-law, additional grounds may not now be put forward in the proceedings before the Court. |
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43

Secondly, according to the applicant, the reasons provided are vague in that they do not state, first, why its responsibility for policy in the energy sector is relevant to the adoption of restrictive measures, next, the kind or amount of revenue concerned and, finally, the relevance of those factors to nuclear proliferation. In those circumstances, according to case-law, additional grounds may not now be put forward in the proceedings before the Court.

| 44 | In that regard, first of all, it should be noted that it is possible to understand from the statement of reasons for the contested measures that the responsibility of the applicant in the energy sector is relevant, in that that sector represents, according to the Council, a substantial source of revenue for the Iranian Government. It is that fact which makes it possible to take the view, according to the Council, that the applicant supports the Iranian Government, thereby justifying the adoption of restrictive measures against it. |
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44

In that regard, first of all, it should be noted that it is possible to understand from the statement of reasons for the contested measures that the responsibility of the applicant in the energy sector is relevant, in that that sector represents, according to the Council, a substantial source of revenue for the Iranian Government. It is that fact which makes it possible to take the view, according to the Council, that the applicant supports the Iranian Government, thereby justifying the adoption of restrictive measures against it.

| 45 | Next, the statement of reasons for the contested measures is admittedly very brief regarding the nature of the revenue in question, since it merely states that it is derived from the energy sector. The fact none the less remains that, both in the letters addressed to the Council and in the application, the applicant was able to challenge the validity of the inclusion of its name by arguing, in particular, that its activities in the energy sector did not constitute a source of revenue for the Iranian Government, but, on the contrary, required the input of public funds in the form of subsidies. In those circumstances, while it is accepted that more detailed reasons would have been preferable, it must be concluded that the statement of reasons made it possible for the applicant to ascertain, with sufficient clarity, the justification given for the restrictive measures to which it was subject and to challenge it. Similarly, that statement of reasons enables the Court to review the legality of the contested measures. |
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45

Next, the statement of reasons for the contested measures is admittedly very brief regarding the nature of the revenue in question, since it merely states that it is derived from the energy sector. The fact none the less remains that, both in the letters addressed to the Council and in the application, the applicant was able to challenge the validity of the inclusion of its name by arguing, in particular, that its activities in the energy sector did not constitute a source of revenue for the Iranian Government, but, on the contrary, required the input of public funds in the form of subsidies. In those circumstances, while it is accepted that more detailed reasons would have been preferable, it must be concluded that the statement of reasons made it possible for the applicant to ascertain, with sufficient clarity, the justification given for the restrictive measures to which it was subject and to challenge it. Similarly, that statement of reasons enables the Court to review the legality of the contested measures.

| 46 | It also follows from that finding that the information provided by the Council in the defence with respect to the nature and amount of revenue concerned does not constitute an a posteriori statement of reasons which cannot be taken into consideration by the Court, but is intended to supplement the statement of reasons already provided. |
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46

It also follows from that finding that the information provided by the Council in the defence with respect to the nature and amount of revenue concerned does not constitute an a posteriori statement of reasons which cannot be taken into consideration by the Court, but is intended to supplement the statement of reasons already provided.

| 47 | Finally, it should be noted that the relevance of the provision of financial resources to the Iranian Government in the context of nuclear proliferation is demonstrated sufficiently clearly from the recitals of the texts that underpin the restrictive measures relating to the applicant. |
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47

Finally, it should be noted that the relevance of the provision of financial resources to the Iranian Government in the context of nuclear proliferation is demonstrated sufficiently clearly from the recitals of the texts that underpin the restrictive measures relating to the applicant.

| 48 | According to recital 13 of Council Decision 2012/35/CFSP of 23 January 2012 amending Decision 2010/413 (OJ 2012 L 19, p. 22), to which recital 11 of Regulation No 267/2012 refers, ‘[t]he restrictions on admission and the freezing of funds and economic resources should be applied to additional persons and entities providing support to the Government of Iran allowing it to pursue proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems, in particular persons and entities providing financial, logistical or material support to the Government of Iran’. It is apparent from that recital that the reason for the freezing of funds of entities providing support to the Government of Iran is to deprive it of the resources, in particular financial resources, allowing it to pursue nuclear proliferation. |
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48

According to recital 13 of Council Decision 2012/35/CFSP of 23 January 2012 amending Decision 2010/413 (OJ 2012 L 19, p. 22), to which recital 11 of Regulation No 267/2012 refers, ‘[t]he restrictions on admission and the freezing of funds and economic resources should be applied to additional persons and entities providing support to the Government of Iran allowing it to pursue proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems, in particular persons and entities providing financial, logistical or material support to the Government of Iran’. It is apparent from that recital that the reason for the freezing of funds of entities providing support to the Government of Iran is to deprive it of the resources, in particular financial resources, allowing it to pursue nuclear proliferation.

| 49 | In those circumstances, the applicant’s second complaint must be rejected. |
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49

In those circumstances, the applicant’s second complaint must be rejected.

| 50 | Thirdly, according to the applicant, the statement of reasons provided by the Council does not explain why the observations made by the applicant to the Council were disregarded. |
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50

Thirdly, according to the applicant, the statement of reasons provided by the Council does not explain why the observations made by the applicant to the Council were disregarded.

| 51 | That complaint is ineffective in the context of the present plea, given that the observations to which the applicant refers postdate the adoption of the contested measures and the Council was therefore necessarily not able to address them in the statement of reasons for those acts. |
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51

That complaint is ineffective in the context of the present plea, given that the observations to which the applicant refers postdate the adoption of the contested measures and the Council was therefore necessarily not able to address them in the statement of reasons for those acts.

| 52 | Moreover, it is to be noted that, as part of the third plea, alleging breach of its rights of defence and of its right to effective judicial protection, the applicant complained that the Council disregarded its observations. The merits of that complaint will be examined in paragraphs 67 to 77 below. |
| --- | --- |

52

Moreover, it is to be noted that, as part of the third plea, alleging breach of its rights of defence and of its right to effective judicial protection, the applicant complained that the Council disregarded its observations. The merits of that complaint will be examined in paragraphs 67 to 77 below.

| 53 | Accordingly, the applicant’s third complaint must also be rejected and, consequently, the second plea in its entirety. |
| --- | --- |

53

Accordingly, the applicant’s third complaint must also be rejected and, consequently, the second plea in its entirety.

The third plea in law, alleging breach of the rights of the defence and of the right to effective judicial protection

| 54 | The applicant submits that the Council infringed its rights of defence and its right to effective judicial protection. |
| --- | --- |

54

The applicant submits that the Council infringed its rights of defence and its right to effective judicial protection.

| 55 | The Council contends that the applicant’s arguments are unfounded. |
| --- | --- |

55

The Council contends that the applicant’s arguments are unfounded.

| 56 | First, the applicant claims that a breach of the rights at issue stems from the Council’s breach of the obligation to state reasons. |
| --- | --- |

56

First, the applicant claims that a breach of the rights at issue stems from the Council’s breach of the obligation to state reasons.

| 57 | As the second plea, alleging breach of the obligation to state reasons, was rejected in paragraph 53 above, that complaint cannot be upheld. |
| --- | --- |

57

As the second plea, alleging breach of the obligation to state reasons, was rejected in paragraph 53 above, that complaint cannot be upheld.

| 58 | Secondly, the applicant argues that, notwithstanding its request to that effect, it did not obtain disclosure of the information and evidence relied on in support of the inclusion of its name on the lists in question. In that context, the Council did not give any specific reasons preventing disclosure of the information and evidence. |
| --- | --- |

58

Secondly, the applicant argues that, notwithstanding its request to that effect, it did not obtain disclosure of the information and evidence relied on in support of the inclusion of its name on the lists in question. In that context, the Council did not give any specific reasons preventing disclosure of the information and evidence.

| 59 | In that regard, it must be noted that, when sufficiently precise information has been communicated, enabling the entity concerned effectively to state its point of view on the evidence adduced against it by the Council, the principle of respect for the rights of the defence does not mean that the institution is obliged spontaneously to grant access to the documents in its file. It is only on the request of the party concerned that the Council is required to provide access to all non-confidential official documents concerning the measure at issue (see judgment of 6 September 2013 in Bank Melli Iran v Council, T‐35/10 and T‐7/11, ECR, EU:T:2013:397, paragraph 84 and the case-law cited). |
| --- | --- |

59

In that regard, it must be noted that, when sufficiently precise information has been communicated, enabling the entity concerned effectively to state its point of view on the evidence adduced against it by the Council, the principle of respect for the rights of the defence does not mean that the institution is obliged spontaneously to grant access to the documents in its file. It is only on the request of the party concerned that the Council is required to provide access to all non-confidential official documents concerning the measure at issue (see judgment of 6 September 2013 in Bank Melli Iran v Council, T‐35/10 and T‐7/11, ECR, EU:T:2013:397, paragraph 84 and the case-law cited).

Bank Melli Iran

Council

| 60 | In the present case, the applicant requested access to the file on 8 December 2012. The Council responded to its request on 12 March 2013, sending the applicant a copy of a proposal for the adoption of restrictive measures dated 19 September 2012 together with records of meetings of Council preparatory bodies. |
| --- | --- |

60

In the present case, the applicant requested access to the file on 8 December 2012. The Council responded to its request on 12 March 2013, sending the applicant a copy of a proposal for the adoption of restrictive measures dated 19 September 2012 together with records of meetings of Council preparatory bodies.

| 61 | In addition, the Council confirmed, in response to a written question put by the Court, that its file relating to the applicant did not contain any evidence other than that sent with the reply of 12 March 2013. The applicant did not claim that any other such evidence existed. |
| --- | --- |

61

In addition, the Council confirmed, in response to a written question put by the Court, that its file relating to the applicant did not contain any evidence other than that sent with the reply of 12 March 2013. The applicant did not claim that any other such evidence existed.

| 62 | In those circumstances, it must be held that the applicant did obtain access to the Council’s file in accordance with the principle of respect for the rights of the defence and that, consequently, the second complaint must be rejected. |
| --- | --- |

62

In those circumstances, it must be held that the applicant did obtain access to the Council’s file in accordance with the principle of respect for the rights of the defence and that, consequently, the second complaint must be rejected.

| 63 | Thirdly, the applicant argues that it was not given the opportunity to state its views before the adoption of the restrictive measures. Once those measures were adopted, its ability to present its observations was seriously hampered by the lack of disclosure of information and evidence relied on in support of the inclusion of its name on the lists at issue. |
| --- | --- |

63

Thirdly, the applicant argues that it was not given the opportunity to state its views before the adoption of the restrictive measures. Once those measures were adopted, its ability to present its observations was seriously hampered by the lack of disclosure of information and evidence relied on in support of the inclusion of its name on the lists at issue.

| 64 | First, according to case-law, the Council is not obliged to inform the person or entity concerned beforehand of the grounds on which that institution intends to rely initially in order to include that person or entity’s name in the list of persons and entities whose funds are frozen. So that its effectiveness may not be jeopardised, such a measure must be able to take advantage of a surprise effect and to apply immediately. In such a case, it is as a rule enough if the institution notifies the person or entity concerned of the grounds and affords it the right to be heard at the same time as, or immediately after, the decision is adopted (judgment of 21 December 2011 in France v People’s Mojahedin Organization of Iran, C‐27/09 P, ECR, EU:C:2011:853, paragraph 61). |
| --- | --- |

64

First, according to case-law, the Council is not obliged to inform the person or entity concerned beforehand of the grounds on which that institution intends to rely initially in order to include that person or entity’s name in the list of persons and entities whose funds are frozen. So that its effectiveness may not be jeopardised, such a measure must be able to take advantage of a surprise effect and to apply immediately. In such a case, it is as a rule enough if the institution notifies the person or entity concerned of the grounds and affords it the right to be heard at the same time as, or immediately after, the decision is adopted (judgment of 21 December 2011 in France v People’s Mojahedin Organization of Iran, C‐27/09 P, ECR, EU:C:2011:853, paragraph 61).

France

People’s Mojahedin Organization of Iran

| 65 | Second, as the applicant submitted, on 8 December 2012, its observations to the Council at the same time as its request for access to the file, those observations could not, necessarily, take account of the evidence in the file. However, after access to the file was granted on 12 March 2013, the applicant had the opportunity to submit to the Council additional observations in response to the evidence disclosed. |
| --- | --- |

65

Second, as the applicant submitted, on 8 December 2012, its observations to the Council at the same time as its request for access to the file, those observations could not, necessarily, take account of the evidence in the file. However, after access to the file was granted on 12 March 2013, the applicant had the opportunity to submit to the Council additional observations in response to the evidence disclosed.

| 66 | Consequently, it cannot be claimed that the Council infringed the rights of the defence in so far as concerns the opportunity afforded the applicant to put forward observations, which means that the applicant’s third complaint must be rejected. |
| --- | --- |

66

Consequently, it cannot be claimed that the Council infringed the rights of the defence in so far as concerns the opportunity afforded the applicant to put forward observations, which means that the applicant’s third complaint must be rejected.

| 67 | Fourthly, according to the applicant, the Council disregarded the observations actually submitted to it. |
| --- | --- |

67

Fourthly, according to the applicant, the Council disregarded the observations actually submitted to it.

| 68 | In that regard, paragraphs 2 to 4 of Article 24 of Decision 2010/413 state:
  ‘2.   Where the Council decides to subject a person or entity to the measures referred to in Articles 19(1)(b) and 20(1)(b), it shall amend Annex II accordingly.
  3.   The Council shall communicate its decision to the person or entity referred to ... providing such person or entity an opportunity to present observations.
  4.   Where observations are submitted, or where substantial new evidence is presented, the Council shall review its decision and inform the person or entity accordingly.’ |
| --- | --- |

68

In that regard, paragraphs 2 to 4 of Article 24 of Decision 2010/413 state:

‘2.   Where the Council decides to subject a person or entity to the measures referred to in Articles 19(1)(b) and 20(1)(b), it shall amend Annex II accordingly.

3.   The Council shall communicate its decision to the person or entity referred to ... providing such person or entity an opportunity to present observations.

4.   Where observations are submitted, or where substantial new evidence is presented, the Council shall review its decision and inform the person or entity accordingly.’

| 69 | Paragraphs 3 and 4 of Article 46 of Regulation No 267/2012 lay down similar rules regarding the listing of a name in Annex IX to that regulation. |
| --- | --- |

69

Paragraphs 3 and 4 of Article 46 of Regulation No 267/2012 lay down similar rules regarding the listing of a name in Annex IX to that regulation.

| 70 | It is apparent from those provisions that the Council was required to review the applicant’s listing in the light of the applicant’s observations of 8 December 2012 and 31 January 2013. In the absence of a specific time-limit, it is appropriate to take the view that the review should have taken place within a reasonable time. That being so, when considering the reasonableness of the period elapsed, it must be borne in mind that, for the reasons stated in paragraph 64 above, 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. |
| --- | --- |

70

It is apparent from those provisions that the Council was required to review the applicant’s listing in the light of the applicant’s observations of 8 December 2012 and 31 January 2013. In the absence of a specific time-limit, it is appropriate to take the view that the review should have taken place within a reasonable time. That being so, when considering the reasonableness of the period elapsed, it must be borne in mind that, for the reasons stated in paragraph 64 above, 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.

| 71 | In the present case, the Council’s letter of 14 March 2014 is a response to the applicant’s observations, to which the applicant expressly refers. However, it was sent more than 15 months after the applicant submitted its first observations, on 8 December 2012. |
| --- | --- |

71

In the present case, the Council’s letter of 14 March 2014 is a response to the applicant’s observations, to which the applicant expressly refers. However, it was sent more than 15 months after the applicant submitted its first observations, on 8 December 2012.

| 72 | In those circumstances, it must be concluded that it clearly took the Council an unreasonable length of time to respond to the applicant’s observations. |
| --- | --- |

72

In those circumstances, it must be concluded that it clearly took the Council an unreasonable length of time to respond to the applicant’s observations.

| 73 | That being so, it is appropriate to examine whether that breach of the applicant’s rights of defence warrants the annulment of the contested measures. |
| --- | --- |

73

That being so, it is appropriate to examine whether that breach of the applicant’s rights of defence warrants the annulment of the contested measures.

| 74 | In that regard, it should be noted that the objective of the obligation in question is to ensure that the restrictive measures relating to a person or entity are warranted at the time they are adopted, in the light of the observations that that person or entity has submitted. |
| --- | --- |

74

In that regard, it should be noted that the objective of the obligation in question is to ensure that the restrictive measures relating to a person or entity are warranted at the time they are adopted, in the light of the observations that that person or entity has submitted.

| 75 | It is apparent from paragraph 71 above that the letter of 14 March 2014 serves that objective. |
| --- | --- |

75

It is apparent from paragraph 71 above that the letter of 14 March 2014 serves that objective.

| 76 | In those circumstances, the objective of the provisions requiring the Council to respond to observations submitted by the person or entity concerned was met, albeit belatedly, and the Council’s breach therefore no longer adversely affects the applicant. |
| --- | --- |

76

In those circumstances, the objective of the provisions requiring the Council to respond to observations submitted by the person or entity concerned was met, albeit belatedly, and the Council’s breach therefore no longer adversely affects the applicant.

| 77 | Accordingly, without prejudice to the applicant’s right under Article 340 TFEU to seek compensation for the damage, if any, which it might have suffered as a result of the Council’s delay in fulfilling the obligation in question, it may not rely on that delay to annul the restrictive measures relating to it, which were adopted pursuant to the contested measures. |
| --- | --- |

77

Accordingly, without prejudice to the applicant’s right under Article 340 TFEU to seek compensation for the damage, if any, which it might have suffered as a result of the Council’s delay in fulfilling the obligation in question, it may not rely on that delay to annul the restrictive measures relating to it, which were adopted pursuant to the contested measures.

| 78 | In those circumstances, the fourth complaint must be rejected and, consequently, the third plea in its entirety. |
| --- | --- |

78

In those circumstances, the fourth complaint must be rejected and, consequently, the third plea in its entirety.

The first plea in law, alleging an error of assessment

| 79 | The applicant submits that, as it does not meet any of the criteria set out in Decision 2010/413 and Regulation No 267/2012 for the adoption of restrictive measures, the Council made an error of assessment by adopting such measures against it. |
| --- | --- |

79

The applicant submits that, as it does not meet any of the criteria set out in Decision 2010/413 and Regulation No 267/2012 for the adoption of restrictive measures, the Council made an error of assessment by adopting such measures against it.

| 80 | The Council contends that the applicant’s arguments are unfounded. |
| --- | --- |

80

The Council contends that the applicant’s arguments are unfounded.

| 81 | As the Court of Justice recently noted in a review of restrictive measures, the Courts of the European Union must, in accordance with the powers conferred upon them by the FEU Treaty, conduct a review, in principle a full review, of the lawfulness of all Union acts in the light of the fundamental rights forming an integral part of the European Union legal order (see judgment of 28 November 2013 in Council v Fulmen and Mahmoudian, C‐280/12 P, ECR, EU:C:2013:775, paragraph 58 and the case-law cited). |
| --- | --- |

81

As the Court of Justice recently noted in a review of restrictive measures, the Courts of the European Union must, in accordance with the powers conferred upon them by the FEU Treaty, conduct a review, in principle a full review, of the lawfulness of all Union acts in the light of the fundamental rights forming an integral part of the European Union legal order (see judgment of 28 November 2013 in Council v Fulmen and Mahmoudian, C‐280/12 P, ECR, EU:C:2013:775, paragraph 58 and the case-law cited).

Council

Fulmen and Mahmoudian

| 82 | Those fundamental rights include the right to effective judicial protection (see judgment in Council v Fulmen and Mahmoudian, cited in paragraph 81 above, EU:C:2013:775, paragraph 59 and the case-law cited). |
| --- | --- |

82

Those fundamental rights include the right to effective judicial protection (see judgment in Council v Fulmen and Mahmoudian, cited in paragraph 81 above, EU:C:2013:775, paragraph 59 and the case-law cited).

Council

Fulmen and Mahmoudian

| 83 | The effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires, inter alia, that the Courts of the European Union ensure that the measure in question, which affects the person or entity concerned individually, is adopted on a sufficiently solid factual basis. That entails a verification of the facts alleged 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 measure, is substantiated (see, to that effect, judgment in Council v Fulmen and Mahmoudian, cited in paragraph 81 above, EU:C:2013:775, paragraph 64 and the case-law cited). |
| --- | --- |

83

The effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires, inter alia, that the Courts of the European Union ensure that the measure in question, which affects the person or entity concerned individually, is adopted on a sufficiently solid factual basis. That entails a verification of the facts alleged 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 measure, is substantiated (see, to that effect, judgment in Council v Fulmen and Mahmoudian, cited in paragraph 81 above, EU:C:2013:775, paragraph 64 and the case-law cited).

Council

Fulmen and Mahmoudian

| 84 | To that end, it is for the Courts of the European Union, in order to carry out that examination, to request the competent European Union authority, when necessary, to produce information or evidence, confidential or not, relevant to such an examination (see judgment in Council v Fulmen and Mahmoudian, cited in paragraph 81 above, EU:C:2013:775, paragraph 65 and the case-law cited). |
| --- | --- |

84

To that end, it is for the Courts of the European Union, in order to carry out that examination, to request the competent European Union authority, when necessary, to produce information or evidence, confidential or not, relevant to such an examination (see judgment in Council v Fulmen and Mahmoudian, cited in paragraph 81 above, EU:C:2013:775, paragraph 65 and the case-law cited).

Council

Fulmen and Mahmoudian

| 85 | That is because 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, namely that those reasons are not well founded (see judgment in Council v Fulmen and Mahmoudian, cited in paragraph 81 above, EU:C:2013:775, paragraph 66 and the case-law cited). |
| --- | --- |

85

That is because 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, namely that those reasons are not well founded (see judgment in Council v Fulmen and Mahmoudian, cited in paragraph 81 above, EU:C:2013:775, paragraph 66 and the case-law cited).

Council

Fulmen and Mahmoudian

| 86 | In the present case, the applicant argues, first, that the Council never indicated to it the criterion that it had relied on in adopting the restrictive measures relating to the applicant. |
| --- | --- |

86

In the present case, the applicant argues, first, that the Council never indicated to it the criterion that it had relied on in adopting the restrictive measures relating to the applicant.

| 87 | That complaint has already been examined and rejected as part of the examination of the second plea. As is apparent from paragraphs 39 to 42 above, the statement that the applicant is responsible for a sector providing a substantial source of revenue for the Iranian Government, read together with Article 20(1) of Decision 2010/413 and Article 23(2) of Regulation No 267/2012, makes it clear to the applicant that it was the subject of restrictive measures on the basis of the criterion relating to the entities providing support to the Iranian Government. |
| --- | --- |

87

That complaint has already been examined and rejected as part of the examination of the second plea. As is apparent from paragraphs 39 to 42 above, the statement that the applicant is responsible for a sector providing a substantial source of revenue for the Iranian Government, read together with Article 20(1) of Decision 2010/413 and Article 23(2) of Regulation No 267/2012, makes it clear to the applicant that it was the subject of restrictive measures on the basis of the criterion relating to the entities providing support to the Iranian Government.

| 88 | Consequently, it is necessary to verify whether the Council was correct in its view that the applicant had provided support to the Iranian Government. |
| --- | --- |

88

Consequently, it is necessary to verify whether the Council was correct in its view that the applicant had provided support to the Iranian Government.

| 89 | In that context, it is apparent from case-law that the criterion in question 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 (see, to that effect, judgment of 16 July 2014 in National Iranian Oil Company v Council, T‐578/12, under appeal, EU:T:2014:678, paragraphs 119 and 120). 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 (judgment in National Iranian Oil Company v Council, under appeal, EU:T:2014:678, paragraph 140). |
| --- | --- |

89

In that context, it is apparent from case-law that the criterion in question 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 (see, to that effect, judgment of 16 July 2014 in National Iranian Oil Company v Council, T‐578/12, under appeal, EU:T:2014:678, paragraphs 119 and 120). 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 (judgment in National Iranian Oil Company v Council, under appeal, EU:T:2014:678, paragraph 140).

National Iranian Oil Company

Council

National Iranian Oil Company

Council

| 90 | In the present case, it is apparent from the documents in the file that the applicant is involved, as a ministry of the Iranian Government, in the export of electricity, in particular in so far as it collects the amounts paid by buyers of exported electricity. The value of the exports in question was US dollars (USD) 0.67 billion between March 2009 and March 2010, USD 0.87 billion between March 2010 and March 2011 and USD 1.1 billion between March 2011 and March 2012. |
| --- | --- |

90

In the present case, it is apparent from the documents in the file that the applicant is involved, as a ministry of the Iranian Government, in the export of electricity, in particular in so far as it collects the amounts paid by buyers of exported electricity. The value of the exports in question was US dollars (USD) 0.67 billion between March 2009 and March 2010, USD 0.87 billion between March 2010 and March 2011 and USD 1.1 billion between March 2011 and March 2012.

| 91 | In the light of those findings, it must be concluded that the applicant’s activities in the electricity export sector provide a source of income to the Iranian Government and thus constitute support for the latter, in the form of financial support. |
| --- | --- |

91

In the light of those findings, it must be concluded that the applicant’s activities in the electricity export sector provide a source of income to the Iranian Government and thus constitute support for the latter, in the form of financial support.

| 92 | The applicant none the less objects that, as a result of its functions and the fact that it provides services at regulated prices on the Iranian market, it is a net recipient of government funds rather than a significant source of revenue for that government. It further states, in that context, that the sums raised by electricity exports are used, in particular, to subsidise the supply of electricity to Iranian citizens. |
| --- | --- |

92

The applicant none the less objects that, as a result of its functions and the fact that it provides services at regulated prices on the Iranian market, it is a net recipient of government funds rather than a significant source of revenue for that government. It further states, in that context, that the sums raised by electricity exports are used, in particular, to subsidise the supply of electricity to Iranian citizens.

| 93 | The fact that the applicant 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. |
| --- | --- |

93

The fact that the applicant 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.

| 94 | The applicant’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, as is apparent from the evidence in the file, the financial resources generated by the electricity export activities in question are not subject to any specific budgetary allocation. |
| --- | --- |

94

The applicant’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, as is apparent from the evidence in the file, the financial resources generated by the electricity export activities in question are not subject to any specific budgetary allocation.

| 95 | 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. |
| --- | --- |

95

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.

| 96 | Furthermore, the freezing of the applicant’s funds, on the ground of its electricity export activities, is consistent with the objective mentioned in paragraph 89 above, which is to deprive the Iranian Government of its sources of revenue, irrespective of whether the applicant’s other activities are loss-making. As a result of the freezing of the applicant’s funds, the Iranian Government, of which the applicant is an integral part, is deprived of the enjoyment of part of the financial resources necessary for the carrying out its activities as a whole, including those outside the applicant’s purview which are related to nuclear proliferation. |
| --- | --- |

96

Furthermore, the freezing of the applicant’s funds, on the ground of its electricity export activities, is consistent with the objective mentioned in paragraph 89 above, which is to deprive the Iranian Government of its sources of revenue, irrespective of whether the applicant’s other activities are loss-making. As a result of the freezing of the applicant’s funds, the Iranian Government, of which the applicant is an integral part, is deprived of the enjoyment of part of the financial resources necessary for the carrying out its activities as a whole, including those outside the applicant’s purview which are related to nuclear proliferation.

| 97 | Consequently, the key question in assessing whether the applicant provides financial support to the Iranian Government is not its overall profitability, but whether its electricity export activities are profitable. The applicant does not dispute that those activities are profitable. |
| --- | --- |

97

Consequently, the key question in assessing whether the applicant provides financial support to the Iranian Government is not its overall profitability, but whether its electricity export activities are profitable. The applicant does not dispute that those activities are profitable.

| 98 | In those circumstances, it must be held that the applicant did provide support to the Iranian Government, in the form of financial support, irrespective of the fact that its activities are, in some areas, loss-making overall. Furthermore, in the light of what is stated in paragraph 90 above, the support in question cannot be described as negligible, notwithstanding the applicant’s claim that it constitutes only a small part of the Iranian Government’s budget. |
| --- | --- |

98

In those circumstances, it must be held that the applicant did provide support to the Iranian Government, in the form of financial support, irrespective of the fact that its activities are, in some areas, loss-making overall. Furthermore, in the light of what is stated in paragraph 90 above, the support in question cannot be described as negligible, notwithstanding the applicant’s claim that it constitutes only a small part of the Iranian Government’s budget.

| 99 | Consequently, the Council did not err in applying restrictive measures to the applicant on the basis that it is an entity providing support to the Iranian Government. |
| --- | --- |

99

Consequently, the Council did not err in applying restrictive measures to the applicant on the basis that it is an entity providing support to the Iranian Government.

| 100 | That conclusion is not called into question by the applicant’s claim that the Council did not properly substantiate the grounds relied on against it. |
| --- | --- |

100

That conclusion is not called into question by the applicant’s claim that the Council did not properly substantiate the grounds relied on against it.

| 101 | In that regard, it is apparent from the examination carried out in paragraphs 89 to 99 above that the applicant does not dispute the Council’s key finding of fact relating to the applicant, namely the fact that its activities generate financial resources which are available to the Iranian Government, but rather the relevance of that fact in the light of the legal test applied by the Council. In the absence of any challenge, the Council was not required to provide evidence to substantiate the finding of fact in question, as is apparent from the case-law cited in paragraph 85 above. |
| --- | --- |

101

In that regard, it is apparent from the examination carried out in paragraphs 89 to 99 above that the applicant does not dispute the Council’s key finding of fact relating to the applicant, namely the fact that its activities generate financial resources which are available to the Iranian Government, but rather the relevance of that fact in the light of the legal test applied by the Council. In the absence of any challenge, the Council was not required to provide evidence to substantiate the finding of fact in question, as is apparent from the case-law cited in paragraph 85 above.

| 102 | Finally, the applicant denies being responsible for the formulation of Iran’s nuclear policy, contrary to what is suggested by evidence in the Council’s file. |
| --- | --- |

102

Finally, the applicant denies being responsible for the formulation of Iran’s nuclear policy, contrary to what is suggested by evidence in the Council’s file.

| 103 | In that regard, it is admittedly true that the proposal of 19 September 2012 and the Council’s document of 17 January 2013 bearing the reference ‘Coreu PESC/0711/12 COR 1’ in the Council’s file refer to the applicant’s role in Iran’s nuclear policy. |
| --- | --- |

103

In that regard, it is admittedly true that the proposal of 19 September 2012 and the Council’s document of 17 January 2013 bearing the reference ‘Coreu PESC/0711/12 COR 1’ in the Council’s file refer to the applicant’s role in Iran’s nuclear policy.

| 104 | However, first, in the light of the statement of reasons for the contested measures, it should be noted that the applicant’s argument relates to a circumstance that was not relied on by the Council when adopting those measures. That argument must therefore be rejected as ineffective. |
| --- | --- |

104

However, first, in the light of the statement of reasons for the contested measures, it should be noted that the applicant’s argument relates to a circumstance that was not relied on by the Council when adopting those measures. That argument must therefore be rejected as ineffective.

| 105 | Furthermore, in any event, it is apparent from the examination carried out above that the ground alleging that the applicant provides support to the Iranian Government is well founded. Since that ground is in itself sufficient to justify the inclusion of the applicant’s name on the lists at issue, the inaccuracy of other possible claims by the Council cannot affect the lawfulness of the contested measures, in accordance with the case-law cited in paragraph 83 above. |
| --- | --- |

105

Furthermore, in any event, it is apparent from the examination carried out above that the ground alleging that the applicant provides support to the Iranian Government is well founded. Since that ground is in itself sufficient to justify the inclusion of the applicant’s name on the lists at issue, the inaccuracy of other possible claims by the Council cannot affect the lawfulness of the contested measures, in accordance with the case-law cited in paragraph 83 above.

| 106 | In the light of all the foregoing, the first plea in law must be dismissed. |
| --- | --- |

106

In the light of all the foregoing, the first plea in law must be dismissed.

The fourth plea in law, alleging breach of the applicant’s fundamental rights and of the principle of proportionality

| 107 | The applicant submits that, by adopting the restrictive measures against it, the Council restricted disproportionately its fundamental rights, including the right to property, the right to carry on economic activity and the right to respect for its reputation. |
| --- | --- |

107

The applicant submits that, by adopting the restrictive measures against it, the Council restricted disproportionately its fundamental rights, including the right to property, the right to carry on economic activity and the right to respect for its reputation.

| 108 | First, the applicant states that the restrictive measures against it have serious consequences, given in particular that they have an impact on the exercise of its functions, which are crucial for the health and well-being of the Iranian people. Those measures are neither a necessary nor proportionate means of achieving the objective of preventing nuclear proliferation or its funding, given that the applicant has no involvement in such proliferation. The Council’s approach would justify freezing the funds of any ministry of the Iranian Government, irrespective of its connections with the nuclear programme; this would be plainly disproportionate. |
| --- | --- |

108

First, the applicant states that the restrictive measures against it have serious consequences, given in particular that they have an impact on the exercise of its functions, which are crucial for the health and well-being of the Iranian people. Those measures are neither a necessary nor proportionate means of achieving the objective of preventing nuclear proliferation or its funding, given that the applicant has no involvement in such proliferation. The Council’s approach would justify freezing the funds of any ministry of the Iranian Government, irrespective of its connections with the nuclear programme; this would be plainly disproportionate.

| 109 | Secondly, the applicant submits that the restrictive measures to which it is subject infringe the principles of legal certainty and foreseeability. According to the applicant, as it does not provide any financial support to the Iranian Government, those measures are based on the simple fact that it is a ministry of that government. In those circumstances, there is no way for the applicant to know how those measures can be withdrawn. |
| --- | --- |

109

Secondly, the applicant submits that the restrictive measures to which it is subject infringe the principles of legal certainty and foreseeability. According to the applicant, as it does not provide any financial support to the Iranian Government, those measures are based on the simple fact that it is a ministry of that government. In those circumstances, there is no way for the applicant to know how those measures can be withdrawn.

| 110 | Thirdly, the applicant alleges that breach of the principle of proportionality also stems from the breach of the applicant’s procedural rights. |
| --- | --- |

110

Thirdly, the applicant alleges that breach of the principle of proportionality also stems from the breach of the applicant’s procedural rights.

| 111 | The Council contends that the applicant’s arguments are unfounded. |
| --- | --- |

111

The Council contends that the applicant’s arguments are unfounded.

| 112 | As a preliminary point, with respect to the argument set out in paragraph 110 above, it should be noted that, as is clear from paragraphs 30 to 78 above, the disputed measures are not vitiated by any infringement of the applicant’s procedural rights such as to warrant their annulment. In those circumstances, the applicant’s argument that breach of its procedural rights entails a breach of the principle of proportionality cannot lead to the annulment of the disputed measures either. |
| --- | --- |

112

As a preliminary point, with respect to the argument set out in paragraph 110 above, it should be noted that, as is clear from paragraphs 30 to 78 above, the disputed measures are not vitiated by any infringement of the applicant’s procedural rights such as to warrant their annulment. In those circumstances, the applicant’s argument that breach of its procedural rights entails a breach of the principle of proportionality cannot lead to the annulment of the disputed measures either.

| 113 | With respect to the other complaints, it should be recalled that, by virtue of the principle of proportionality, which is one of the general principles of EU law, the lawfulness of the prohibition of an economic activity is subject to the condition that the prohibitory measures should be appropriate and necessary in order to achieve the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (see judgment in Bank Melli Iran v Council, cited in paragraph 59 above, EU:T:2013:397, paragraph 179 and the case-law cited). |
| --- | --- |

113

With respect to the other complaints, it should be recalled that, by virtue of the principle of proportionality, which is one of the general principles of EU law, the lawfulness of the prohibition of an economic activity is subject to the condition that the prohibitory measures should be appropriate and necessary in order to achieve the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (see judgment in Bank Melli Iran v Council, cited in paragraph 59 above, EU:T:2013:397, paragraph 179 and the case-law cited).

Bank Melli Iran

Council

| 114 | First, as has already been pointed out above, according to case-law, the purpose of the freezing of funds of entities providing support to the Iranian Government is to deprive it of its sources of revenue, in order to oblige it to cease development of its nuclear proliferation programme, as a result of the lack of sufficient financial resources (judgment in National Iranian Oil Company v Council, cited in paragraph 89 above, under appeal, EU:T:2014:678, paragraph 140). Thus, the restrictive measures relating to the applicant are consistent with the objective pursued by the Council, notwithstanding the fact that the applicant is not itself involved in nuclear proliferation. |
| --- | --- |

114

First, as has already been pointed out above, according to case-law, the purpose of the freezing of funds of entities providing support to the Iranian Government is to deprive it of its sources of revenue, in order to oblige it to cease development of its nuclear proliferation programme, as a result of the lack of sufficient financial resources (judgment in National Iranian Oil Company v Council, cited in paragraph 89 above, under appeal, EU:T:2014:678, paragraph 140). Thus, the restrictive measures relating to the applicant are consistent with the objective pursued by the Council, notwithstanding the fact that the applicant is not itself involved in nuclear proliferation.

National Iranian Oil Company

Council

| 115 | Second, while the applicant claims that the restrictive measures to which it is subject have serious repercussions for it, in particular with respect to the willingness of Iranian companies to cooperate with it in the field of water purification and sanitation, it has not substantiated its claim with concrete evidence or information. |
| --- | --- |

115

Second, while the applicant claims that the restrictive measures to which it is subject have serious repercussions for it, in particular with respect to the willingness of Iranian companies to cooperate with it in the field of water purification and sanitation, it has not substantiated its claim with concrete evidence or information.

| 116 | In any event, it is true that the applicant’s rights, including the right to property, are considerably restricted by those measures, since the applicant may not, inter alia, either dispose of its funds situated within the European Union or held by EU nationals, or transfer its funds to the European Union, except where special authorisation has been granted. |
| --- | --- |

116

In any event, it is true that the applicant’s rights, including the right to property, are considerably restricted by those measures, since the applicant may not, inter alia, either dispose of its funds situated within the European Union or held by EU nationals, or transfer its funds to the European Union, except where special authorisation has been granted.

| 117 | Nevertheless, case-law makes it clear that the fundamental rights relied on by the applicant are not absolute, and that their exercise may be subject to restrictions warranted by public interest objectives pursued by the European Union. Accordingly, any restrictive economic or financial measure has, by definition, consequences which affect the right to property, thereby causing harm to parties who have not been found to be responsible for the situation giving rise to the measures in question. The importance of the aims pursued by the legislation at issue is such as to justify negative consequences, even of a substantial nature, for some operators (see, to that effect, judgment of 9 July 2009 in Melli Bank v Council, T‐246/08 and T‐332/08, ECR, EU:T:2009:266, paragraph 111 and the case-law cited). |
| --- | --- |

117

Nevertheless, case-law makes it clear that the fundamental rights relied on by the applicant are not absolute, and that their exercise may be subject to restrictions warranted by public interest objectives pursued by the European Union. Accordingly, any restrictive economic or financial measure has, by definition, consequences which affect the right to property, thereby causing harm to parties who have not been found to be responsible for the situation giving rise to the measures in question. The importance of the aims pursued by the legislation at issue is such as to justify negative consequences, even of a substantial nature, for some operators (see, to that effect, judgment of 9 July 2009 in Melli Bank v Council, T‐246/08 and T‐332/08, ECR, EU:T:2009:266, paragraph 111 and the case-law cited).

Melli Bank

Council

| 118 | In the present case, given the prime importance of the preservation of international peace and security, the difficulties caused to the applicant are not disproportionate to the ends pursued. This is particularly true given that, on the one hand, those restrictions relate only to part of the applicant’s assets and that, on the other, Decision 2010/413 and Regulation No 267/2012 provide for certain exceptions to the freezing of funds of entities targeted by restrictive measures. |
| --- | --- |

118

In the present case, given the prime importance of the preservation of international peace and security, the difficulties caused to the applicant are not disproportionate to the ends pursued. This is particularly true given that, on the one hand, those restrictions relate only to part of the applicant’s assets and that, on the other, Decision 2010/413 and Regulation No 267/2012 provide for certain exceptions to the freezing of funds of entities targeted by restrictive measures.

| 119 | Finally, it should be noted that the argument alleging breach of the principles of legal certainty and foreseeability is based on an incorrect premiss. As is apparent from the examination of the first plea, the applicant was not the subject of restrictive measures on the sole basis that it was a ministry of the Iranian Government, but as a result of the financial support that it provided to the latter. In those circumstances, the applicant’s argument cannot succeed. |
| --- | --- |

119

Finally, it should be noted that the argument alleging breach of the principles of legal certainty and foreseeability is based on an incorrect premiss. As is apparent from the examination of the first plea, the applicant was not the subject of restrictive measures on the sole basis that it was a ministry of the Iranian Government, but as a result of the financial support that it provided to the latter. In those circumstances, the applicant’s argument cannot succeed.

| 120 | In the light of the foregoing, the fourth plea in law must be rejected and, accordingly, the action dismissed in its entirety. |
| --- | --- |

120

In the light of the foregoing, the fourth plea in law must be rejected and, accordingly, the action dismissed in its entirety.

Costs

Costs

| 121 | Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Council. |
| --- | --- |

121

Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Council.

| | On those grounds,
  THE GENERAL COURT (First Chamber)
  hereby: |
| --- | --- |

On those grounds,

THE GENERAL COURT (First Chamber)

hereby:

| | 1. | Dismisses the action; |
| --- | --- | --- |

1.

1.

Dismisses the action;

Dismisses the action;

| | 2. | Orders the Ministry of Energy of Iran to pay the costs. |
| --- | --- | --- |

2.

2.

Orders the Ministry of Energy of Iran to pay the costs.

Orders the Ministry of Energy of Iran to pay the costs.

| | Kanninen


  Pelikánová


  Buttigieg


  Delivered in open court in Luxembourg on 8 September 2015.
  [Signatures] |
| --- | --- |

Kanninen

Pelikánová

Buttigieg

Delivered in open court in Luxembourg on 8 September 2015.

[Signatures]

---

(
  *1
  )	Language of the case: English.

*1