Judgment — ECLI:EU:T:2015:667
Date: 2015-09-22
Language of the case: English
Court formation: First Chamber
Subject matter: External relations;Common foreign and security policy
Procedure: Action for annulment - unfounded;Action for annulment - successful

summary of reasons underpinning that measure, 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 of 28 November 2013 in Council v Fulmen and Mahmoudian, C‑280/12 P, ECR, EU:C:2013:775, paragraphs 58, 59 and 64 and the case-law cited). 43 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 42 above, EU:C:2013:775, paragraph 65 and the case-law cited). 44 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 or entity 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 42 above, EU:C:2013:775, paragraph 66 and the case-law cited). 45 It should be borne in mind that the following grounds were relied on by the Council in respect of the applicant: ‘First Islamic Investment Bank (FIIB) is assisting designated entities to violate the provisions of the EU regulation on Iran and is providing financial support to the government of Iran. FIIB is part of the Sorinet Group owned and operated by Babak Zanjani. It is being used to channel Iranian oil-related payments.’ 46 In the first place, the applicant claims that the Council has not proved that the applicant infringed EU legislation or that it provided support to the Iranian Government. It states, in that context, that since it is owned by the Tajik company Arzish, it is not linked to the Government of Iran and has never conducted transactions with Iranian companies or any transactions regarding alleged Iranian crude oil payments. 47 In that regard, it should be noted that, both in its written submissions and in the oral procedure, the Council has failed to submit specific allegations or evidence to establish the merits of the grounds according to which the applicant helps third-party entities to infringe the applicable legislation or supports the Iranian Government, by serving as an intermediary for payments related to Iranian oil. Accordingly, those grounds, the merits of which are disputed by the applicant, cannot justify the restrictive measures concerning it. 48 In the second place, the applicant disputes being owned or controlled by the alleged Sorinet Group. In that context, the Council has demonstrated neither the existence of that group nor that it exercised control over the applicant. 49 The Council responds that it is clear from the evidence attached to the defence that, through the Sorinet Group, the applicant is controlled by Mr Babak Zanjani, who provides support to the Iranian Government. 50 At the outset, it should be recalled that according to Article 20(1)(c) of Decision 2010/413 and Article 23(2)(d) of Regulation No 267/2012 it is necessary to freeze the funds and economic resources which belong to persons and entities providing support to the Government of Iran and entities owned or controlled by them. 51 By Decision 2012/829 and by Implementing Regulation No 1264/2012, Mr Zanjani’s name was included on the list in Annex II to Decision 2010/413 and on that contained in Annex IX to Regulation No 267/2012 on the ground, in particular, that he provided support to the Iranian Government. 52 The reasoning that the applicant ‘is part of the Sorinet Group owned and operated by Babak Zanjani’ refers to the fact that it is owned by the latter or is controlled by him, in accordance with the criteria set out in paragraph 50 above. 53 Accordingly, it is necessary to examine the evidence submitted by the Council to determine whether it supports the conclusion that the applicant was owned by Mr Zanjani or was under his control at the time of the adoption of the contested measures. 54 First, in that regard, it is clear from a report from a Tajik news agency that, in 2011, Arzish, the applicant’s parent company, was converted into a bank named Kont Bank Investment. 55 Second, according to an extract from the website of Kont Bank Investment, that bank is owned by the Turkish company Kont Kozmetik ve Diş Ticaret Limited Şirketi. 56 Third, it is clear from an extract from the website of Kont Kozmetik ve Diş Ticaret Limited Şirketi that it is part of the Kont Group, which includes companies active in the field of tourism and financial services. 57 Fourth, the extract from the website of the Sorinet Group states that Mr Zanjani is the head of that group and, moreover, identifies the applicant, its parent company, Kont Bank Investment and other members of the Kont Group as forming part of the Sorinet Group. 58 Accordingly, it must be concluded that the evidence presented by the Council indicates, at a minimum, a relationship of control between Mr Zanjani and the applicant, through Kont Kozmetik ve Diş Ticaret Limited Şirketi and through Kont Bank Investment. 59 Furthermore, in so far as that evidence comes from the websites of a news agency and the companies concerned, it should be recognised as having sufficient probative value. 60 The applicant further claims, in that regard, that the Council has not proved the existence of an entity named Sorinet Group. 61 However, it should be noted, in view of the evidence presented by the Council, that the name in question is actually used publicly to identify the different companies controlled or owned by Mr Zanjani. Moreover, even if that name does not correspond to a concrete and precise legal structure, that fact is irrelevant as regards the existence of a link between Mr Zanjani and the applicant, as is clear from paragraphs 53 to 59 above. 62 In view of all the foregoing, the Council was correct to conclude that the applicant was owned by Mr Zanjani or controlled by him. In so far as it is clear from paragraphs 50 to 53 above that that ground is in itself sufficient to justify the restrictive measures concerning the applicant, the first plea must be rejected. The second plea in law, alleging infringement of the obligation to state reasons, of the applicant’s rights of defence and of its right to effective judicial protection 63 The applicant contends that the Council infringed the obligation to state reasons, its rights of defence and its right to effective judicial protection. 64 In the first place, it states that the grounds relied on against it are too brief to satisfy the obligation to state reasons, so that it is impossible to determine whether the restrictive measures concerning it are well-founded. In particular, in the applicant’s view, the Council neither mentioned the specific situations in which the applicant had infringed the applicable legislation or provided support to the Iranian Government nor specified the nature of its alleged relationship with the Sorinet Group. 65 In the second place, notwithstanding its specific requests, the applicant did not obtain, from the Council, evidence or documents to support the allegations made against it. 66 In the third place, the abovementioned infringements also entail infringement of its right to effective judicial protection. 67 The Council maintains that the applicant’s arguments are unfounded, whilst acknowledging that the applicant’s request for access to the file is under consideration. 68 At the outset, it should be noted that the applicant’s claim that the Council has infringed its right to effective judicial protection is not supported by specific arguments, but merely refers to the arguments presented in the context of other claims. Accordingly it is not necessary to examine the claim alleging infringement of a right to effective judicial protection independently. 69 In the first place, as regards the obligation to state reasons, 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, second, 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). 70 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 69 above, EU:C:2012:718, paragraph 50 and the case-law cited). 71 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 (see judgment in Council v Bamba, cited in paragraph 69 above, EU:C:2012:718, paragraph 51 and the case-law cited). 72 Therefore, the statement of reasons for an act of the Council which imposes a measure freezing 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 (see judgment in Council v Bamba, cited in paragraph 69 above, EU:C:2012:718, paragraph 52 and the case-law cited). 73 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 69 above, EU:C:2012:718, paragraph 53 and the case-law cited). 74 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 69 above, EU:C:2012:718, paragraph 54 and the case-law cited). 75 In the present case, it should be borne in mind that the Council used the following reasoning against the applicant: ‘First Islamic Investment Bank (FIIB) is assisting designated entities to violate the provisions of the EU regulation on Iran and is providing financial support to the government of Iran. FIIB is part of the Sorinet Group owned and operated by Babak Zanjani. It is being used to channel Iranian oil-related payments.’ 76 It should also be borne in mind that it has been stated in paragraph 47 above that the grounds according to which the applicant allegedly helps third-party entities to infringe the applicable legislation, supports the Iranian Government or serves as an intermediary for payments related to Iranian oil cannot justify the restrictive measures concerning it. Accordingly, there is no longer any need to determine whether the Council has complied with the obligation to state reasons in so far as those allegations are concerned. 77 As regards the ground concerning the links between the applicant and Mr Zanjani, the reasoning provided is sufficient since the Council has identified the group through which the applicant is deemed to be owned or controlled. In fact, as demonstrated by the applicant’s arguments set out in the first plea in law, the applicant was able to criticise the merits of that claim, by disputing the existence of the Sorinet Group and claiming that it was owned by a Tajik company. Similarly, the Court was able to rule on the merits of that plea in law. 78 Consequently, it is necessary to reject the claim alleging infringement of the obligation to state reasons in so far as the ground relating to the links between the applicant and Mr Zanjani is concerned. 79 In the second place, as regards access to the file, it must be borne in mind 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 Council 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). 80 In that regard, in the absence of an exact deadline set by the applicable legislation, the Council is obliged to provide access to the documents concerned within a reasonable period (see, to that effect, judgment of 16 September 2013 in Bank Kargoshaei and Others v Council, T‑8/11, EU:T:2013:470, paragraph 93). That being said, when considering the reasonableness of the elapsed period, it should be borne in mind that, in so far as the person or entity concerned is not afforded the opportunity to be heard before the initial inclusion of its name on the lists of persons and entities concerned by restrictive measures, the access to the file referred to in paragraph 79 above is the first opportunity for it to be made aware of the documents used by the Council in support of that listing and, accordingly, is of particular interest for its defence. 81 In the present case, the applicant requested access to the file on 25 February 2013. 82 Admittedly, the Council has attached to its defence, lodged on 4 June 2013, documents relating to the links between the applicant and Mr Zanjani, which were sent to the applicant in the context of the present proceedings. However, the Council does not claim that the transmission of those documents constitutes a response to the applicant’s request for access to the file. Similarly, the Council’s letter of 14 March 2014 constitutes a response to the applicant’s request for review, but not to its request for access to the file. 83 Consequently, and in light of the Council’s reply to an oral question from the Court, it should be considered that the Council had not responded to the applicant’s request for access to the file by the date of the hearing on 10 December 2014, that is, more than 19 months after it was made. Accordingly, it is appropriate to conclude that the Council infringed the applicant’s rights of defence in that regard. 84 As regards the consequences of that infringement, it must be borne in mind that, following the case-law, the lack of communication or the belated disclosure of a document on which the Council relied in order to adopt or maintain the restrictive measures concerning an entity does not constitute a breach of the rights of the defence that would justify the annulment of the acts concerned unless it is established that the restrictive measures concerned could not have been lawfully adopted or maintained if the undisclosed document had had to be excluded as inculpatory evidence (judgment in Bank Melli Iran v Council, cited in paragraph 79 above, EU:T:2013:397, paragraph 100, and judgment of 6 September 2013 in Persia International Bank v Council, T‑493/10, ECR (Extracts), EU:T:2013:398, paragraph 85). 85 In the present case, on the one hand, the adoption of Decision 2012/829 and of Implementing Regulation No 1264/2012 is not supported by any other document communicated to the applicant within a reasonable time after their adoption. Therefore, the lack of access to the file means that Decision 2012/829 and Implementing Regulation No 1264/2012 should be annulled. 86 On the other hand, the adoption of the decision to maintain the measures was preceded by the transmission to the applicant of the documents attached to the defence, relating to the links between the applicant and Mr Zanjani. As is clear from paragraphs 48 to 62 above, those documents establish, to the requisite legal standard, the merits of a ground which in itself justifies the restrictive measures concerning the applicant. 87 Therefore, the infringement of the applicant’s right of access to the file does not justify the annulment of the decision to maintain the measures. 88 In the light of all the foregoing, it is necessary to uphold the second plea in law as regards Decision 2012/829 and Implementing Regulation No 1264/2012 and to reject it as regards the decision to maintain the measures. The third plea in law, alleging infringement of the principle of proportionality 89 The applicant claims that the restrictive measures concerning it infringe the principle of proportionality. In the first place, it relies, in that regard, on the judgment of 3 September 2008 in Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, ECR, EU:C:2008:461), from which it is clear that an infringement of that principle flows from the infringement of its procedural rights, complained of in the second plea in law. 90 In the second place, according to the applicant, the restrictive measures have a significant impact on its activities and reputation, since they prevent it pursuing economic activity, causing it harm. Such consequences are disproportionate since there is no rational link between the measures in question and the objective pursued by the Council as the Council has not identified or established any illegal transaction in which the applicant has been involved. 91 The Council considers that the applicant’s arguments are unfounded. 92 At the outset, it should be noted that, in so far as Decision 2012/829 and Implementing Regulation No 1264/2012 have been annulled in the context of the second plea in law, it is appropriate to examine the present plea in law solely as it concerns the decision to maintain the measures. 93 As regards, in that respect, the applicant’s first argument, it is clear from paragraphs 84, 86 and 87 above that the infringement of the right of access to the file found by the Court does not justify the annulment of the decision to maintain the measures. Nor, in those circumstances, can the applicant’s argument, that the infringement of its procedural rights entails an infringement of the principle of proportionality, lead to the annulment of that decision. 94 As for the applicant’s second argument, it must be borne in mind 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 79 above, EU:T:2013:397, paragraph 179 and the case-law cited). 95 In the present case, on the one hand, it is clear from the examination carried out in paragraphs 48 to 62 above that the Council was right to conclude that the applicant was an entity controlled by Mr Zanjani, who had himself been identified as a person providing support to the Iranian Government. Accordingly, the adoption of restrictive measures concerning the applicant corresponds to the objective pursued by the Council, namely 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. 96 On the other hand, although the applicant submits that the measures have a significant impact on its activities and reputation, since they prevent it pursuing economic activity, it has not submitted concrete evidence relating to restrictions or harm which it has actually suffered. The existence of substantial harm is even unlikely, since the applicant’s sole shareholder is a Tajik company and since, in its own words, it focuses on investment projects in Malaysia. 97 In any event, it cannot be excluded that the applicant’s right to property and its freedom to exercise an economic activity are restricted to some extent by the restrictive measures at issue, since it cannot, in particular, use its funds which may be located on EU territory or held by EU nationals, or transfer its funds to the European Union, except under special authorisation. Similarly, the restrictive measures concerning the applicant may, depending on the circumstances, cause its customers and partners to regard it with a certain suspicion. 98 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 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 activity, 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 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). 99 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 sought. That is particularly the case since, first, those restrictions concern, at most, part of the applicant’s assets and, second, Decision 2010/413 and Regulation No 267/2012 provide for certain exceptions enabling in particular the entities concerned by the fund-freezing measures to meet essential expenditure. 100 Accordingly, the third plea in law must be rejected. 101 In view of all the foregoing, it is necessary, first, to annul Decision 2012/829 and Implementing Regulation No 1264/2012 and, second, to dismiss the action in so far as it is directed against the decision to maintain the measures. 102 Furthermore, it should be noted that the decision to maintain the measures is not a mere confirmatory act but constitutes an autonomous decision, adopted by the Council at the end of the periodic review provided for in Article 26(3) of Decision 2010/413 and in Article 46(6) of Regulation No 267/2012. Accordingly, although the annulment of Decision 2012/829 and Implementing Regulation No 1264/2012 includes removal of the applicant’s name from the list in Annex II to Decision 2010/413 and from that in Annex IX to Regulation No 267/2012 in respect of the period prior to adoption of the decision to maintain the measures, it is not, by contrast, capable of calling into question the legality of that listing in respect of the period after that decision to maintain the measures was adopted. Costs 103 Pursuant to Article 134(3) of the Rules of Procedure of the General Court, the parties are to bear their own costs where each party succeeds on some and fails on other heads. However if it appears justified in the circumstances of the case, the General Court may order that one party, in addition to bearing his own costs, pay a proportion of the costs of the other party. In this case, it is appropriate to order each party to bear one half of its own costs and to pay one half of the costs of the other party. On those grounds, THE GENERAL COURT (First Chamber) hereby: 1. Annuls, in so far as they concern First Islamic Investment Bank Ltd: – Point I of the Annex to Council Decision 2012/829/CFSP of 21 December 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran; – Point I of the Annex to Council Implementing Regulation (EU) No 1264/2012 of 21 December 2012 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran; 2. Dismisses the action as to the remainder; 3. Orders First Islamic Investment Bank to bear one half of its own costs and to pay one half of the costs of the Council of the European Union, and the Council to bear one half of its own costs and to pay one half of the costs of First Islamic Investment Bank. Kanninen Pelikánová Buttigieg Delivered in open court in Luxembourg on 22 September 2015. [Signatures] * Language of the case: English.