Judgment — ECLI:EU:T:2015:599
Date: 2015-09-08
Language of the case: English
Court formation: First Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for annulment - unfounded

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). 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). 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). 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. 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). 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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). 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. 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. 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). 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. 120 In the light of the foregoing, the fourth plea in law must be rejected and, accordingly, the action dismissed in its entirety. 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. On those grounds, THE GENERAL COURT (First Chamber) hereby: 1. Dismisses the action; 2. 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] * Language of the case: English.