Judgment — ECLI:EU:T:2015:235
Date: 2015-04-29
Language of the case: French
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 decision, is substantiated (see judgment in Council v Fulmen and Mahmoudian, cited in paragraph 74 above, EU:C:2013:775, paragraph 64 and the case-law cited). 173 In that respect, 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, that those reasons are not well founded (see judgment in Council v Fulmen and Mahmoudian, cited in paragraph 74 above, EU:C:2013:775, paragraph 66 and the case-law cited). 174 In the present case, it is therefore necessary to determine whether the Council was right to consider, when adopting the contested acts, that the applicant could be subject to restrictive measures as an entity providing support to the Iranian Government, in the form of financial assistance. 175 In the first place, the applicant reiterates that the criterion of support to the Iranian Government only covers the situation where specific assistance, linked to nuclear proliferation activities, is provided by the entity concerned. The applicant does not provide such support, since its activities are intended for private undertakings. 176 In this connection, it is sufficient to refer back to paragraphs 74 to 93 above, which show that the criterion of support to the Iranian Government may also apply to entities which are not involved themselves in nuclear proliferation. 177 In the second place, the applicant claims that, in contrast to what is stated in the reasons for the contested acts, it does not provide financial support to the Iranian Government. 178 The applicant explains, first of all, that its function is not to pay dividends to the Iranian Government. 179 Next, the applicant admits paying a proportion of its profits to the national treasury, which is subordinate to the Iranian Ministry of Finance, in addition to income tax. However, the applicant explains that this obligation, to which all public companies in Iran are subject under Paragraph 17 of the Law on the budget for the Iranian year 1389 (‘Paragraph 17’), cannot constitute financial support to the Iranian Government within the meaning of the criterion at issue since it does not amount to a dividend, being more akin to a tax or a parafiscal charge. 180 Lastly, the applicant argues that the sums it pays to the national treasury under Paragraph 17 are not used freely by the Iranian Government, but are earmarked for the performance of common interest activities and public service duties to the benefit of the Iranian people. The applicant also states that the sums at issue are in particular reinvested, together with other State resources, in increases in its share capital. 181 As a preliminary point, it should be noted that the fact that the applicant’s function is not to pay dividends to the Iranian Government, even if proven, does not mean that it does not actually provide financial support to the Iranian Government. 182 As is apparent from the information provided by the applicant itself, between the financial years 1387 and 1391 under the Iranian calendar (20 March 2008 to 20 March 2013, ‘the reference period’), it transferred a total of IRR 1 687 181 million to the national treasury pursuant to the obligation laid down in Paragraph 17. 183 Contrary to the applicant’s claims, these sums are not comparable to taxes or parafiscal charges and cannot, for that reason, avoid being classified as financial support as referred to in the criterion at issue. As the applicant itself admits, the obligation laid down in Paragraph 17 applies in addition to income tax. This obligation only applies to Iranian public companies and cannot, therefore, be considered to form part of the general fiscal or parafiscal system in Iran. 184 As to the alleged budgetary earmarking of the sums transferred pursuant to the obligation laid down in Paragraph 17, the applicant does not substantiate its claims in any way. In any event, the wording of the alleged earmarking, as produced by the applicant, is so general that it is, a priori, capable of applying to all State expenditure. Accordingly, the existence of this earmarking, even if proven, does not mean that the sums transferred pursuant to the obligation laid down in Paragraph 17 in respect of the reference period do not amount to financial support provided to the Iranian Government within the meaning of the criterion at issue. 185 In that respect, it is apparent from the documents submitted by the applicant in reply to a question from the Court that, in 2012, its share capital was increased by IRR 1 054 102 million. This sum is considerably lower than the total amount of IRR 1 687 181 million transferred by the applicant to the national treasury pursuant to the obligation laid down in Paragraph 17 in respect of the reference period. Accordingly, the increase in the applicant’s share capital does not permit the inference that the applicant did not provide financial support to the Iranian Government during that period. 186 In the light of the foregoing, it must be concluded that, in respect of the reference period, the applicant paid considerable amounts to the Iranian national treasury which constitute financial support to the Iranian Government. Consequently, the Council was entitled to make the applicant subject to restrictive measures as an entity that provided support to the Iranian Government. 187 The applicant further maintains that, in contrast to the requirements of the case-law cited in paragraph 173 above, the Council did not adduce evidence to substantiate its claims. 188 It is apparent from the review carried out in paragraphs 175 to 186 above that the applicant does not actually challenge the accuracy of the crucial fact justifying the restrictive measures affecting it, namely that it paid a proportion of its profits in respect of the reference period to the national treasury. In the absence of such a challenge, the Council is not required to adduce evidence to substantiate that fact, as is apparent from the case-law cited in paragraph 173 above. 189 In the light of the foregoing, the fifth plea in law must be rejected. Sixth plea in law, alleging infringement of the principle of proportionality 190 The applicant submits that the adoption of the restrictive measures affecting it constitutes an unjustified interference with its right to property and its freedom to pursue an economic activity and, therefore, infringes the principle of proportionality. 191 First of all, according to the case-law, the infringement of its procedural rights as alleged in the third plea in law entails an infringement of its right to property and the principle of proportionality. 192 Next, since the applicant is not involved in nuclear proliferation, the restrictive measures affecting it are not consistent with the general aim pursued by the contested acts, namely the campaign against nuclear proliferation. 193 Lastly, the measures at issue cause particularly serious harm to the applicant and its employees in disproportion to the aim pursued by the Council. The applicant also states, in this context, that in contrast to the Council’s claims, quite apart from funds held in the European Union, the restrictive measures at issue also affect funds held in Iran, in that they prevent all transfers of funds from Iran to the European Union and deter Iranian operators from entering into contracts with it. 194 As a preliminary point, it should be noted that, as is apparent from paragraphs 121 to 169 above, the contested acts are not vitiated by an infringement of the applicant’s procedural rights justifying their annulment. Therefore, the argument put forward by the applicant that the infringement of its procedural rights entails an infringement of the right to property and the principle of proportionality cannot succeed. 195 As regards the other complaints, it has already been noted in paragraph 90 above 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 53 above, EU:T:2013:397, paragraph 179 and the case-law cited). 196 First, as is apparent from paragraphs 59 to 93 above, the adoption of restrictive measures against entities providing financial support to the Iranian Government seeks to deprive the latter 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. Thus, the restrictive measures affecting the applicant are not consistent with the aim pursued by the Council, notwithstanding the fact that the applicant is not involved itself in nuclear proliferation. 197 Second, so far as concerns the harm caused to the applicant, it is true that its right to property and its freedom to carry on an economic activity are considerably curtailed by the restrictive measures at issue, since it cannot, in particular, dispose of its funds situated within the territory of the European Union or held by Iranian nationals, or transfer its funds to the European Union, except pursuant to special authorisation. Similarly, the restrictive measures affecting the applicant may result in its trading partners feeling a degree of mistrust towards it. 198 However, the case-law makes it clear that the fundamental rights relied on by the applicant, namely the right to property and the right to carry on an economic activity, are not absolute rights and that their exercise may be subject to restrictions justified by objectives of public interest pursued by the European Union. Thus, any restrictive economic or financial measure entails, ex hypothesi, consequences affecting the right to property and the right to the free exercise of economic activities, so 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 in Melli Bank v Council, paragraph 75 above, EU:T:2009:266, paragraph 111 and the case-law cited). 199 In the present case, given the prime importance of the preservation of international peace and security, the difficulties caused are not disproportionate to the ends sought. This is especially the case because, first of all, the freezing of funds concerns only part of the applicant’s assets. Second, Decision 2010/413 and Implementing Regulation No 267/2012 provide for certain exceptions allowing the entities affected by fund-freezing measures to meet essential expenditure, among others. Lastly, it should be noted that the Council does not claim that the applicant is involved itself in nuclear proliferation. Hence, since it is not personally associated with behaviour posing a risk to international peace and security, the degree of mistrust towards it is therefore lower. 200 Accordingly, the sixth plea in law must be rejected and, in consequence, the action must be dismissed in its entirety. Costs 201 Under Article 87(2) of the Rules of Procedure, 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 Bank of Industry and Mine to pay the costs. Kanninen Pelikánová Buttigieg Delivered in open court in Luxembourg on 29 April 2015. [Signatures] * Language of the case: French.