Opinion of the Advocate General — ECLI:EU:C:2021:496
Date: 2021-06-17
Language of the case: French
Subject matter: External relations;Common foreign and security policy
Procedure: Reference for a preliminary ruling
Origin: France

Summary C-340/20 — 1 
Case C-340/20 
Summary of the request for a preliminary ruling under Article 98(1) of the 
Rules of Procedure of the Court of Justice 
Date lodged:  
24 July 2020 
Referring court:  
Cour de cassation (France) 
Date of the decision to refer:  
10 July 2020 
Applicant:  
Bank Sepah 
Defendants:  
Overseas Financial Limited 
Oaktree Finance Limited 
  
I. Subject matter and circumstances of the dispute 
1 In accordance with United Nations Security Council Resolution 1737 (2006) of 
23 December 2006, Council Common Position 2007/140/CFSP of 27 February 
2007 imposed certain restrictive measures against Iran, including the freezing of 
funds and economic resources of persons and entities engaged in, directly 
associated with or providing support for Iran’s enrichment-related, reprocessing or 
heavy water-related activities or the development by it of nuclear weapon delivery 
systems. Those measures were implemented in the European Union by Council 
Regulation (EC) No 423/2007 of 19 April 2007. [Or. 4] 
2 By Resolution 1747 (2007) of 24 March 2007, the Security Council designated 
Bank Sepah as one of the ‘entities involved in [Iran’s] nuclear or ballistic missile 
activities’ to which the asset-freezing measure was to apply. That resolution was 
transposed into EU law by Commission Regulation (EC) No 441/2007 of 20 April 
2007 amending Council Regulation (EC) No 423/2007, which entered into force 
on 21 April 2007. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-340/20 
 
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3 By judgment of 26 April 2007, which has since become final, the cour d’appel de 
Paris (Court of Appeal, Paris) ordered Bank Sepah to pay Overseas Financial 
Limited (‘Overseas Financial’) the EUR equivalent of USD 2 500 000 and to pay 
Oaktree Finance Limited (‘Oaktree Finance’) the EUR equivalent of 
USD 1 500 000, plus interest at the statutory rate from the date of that judgment. 
4 On 17 January 2016, the Security Council removed Bank Sepah from the list of 
persons and entities subject to restrictive measures against Iran. That decision was 
transposed into EU law by Council Implementing Regulation (EU) 2016/74 of 
22 January 2016, which entered into force on 23 January 2016. 
5 On 17 May 2016, Overseas Financial and Oaktree Finance issued formal notices 
of attachment and sale against Bank Sepah. 
6 On 5 July 2016, they attached receivables, shareholder rights and transferable 
securities held by Société générale but belonging to Bank Sepah. 
7 On 13 June and 15 July 2016, Bank Sepah brought proceedings against Overseas 
Financial and Oaktree Finance before the court responsible for enforcement with a 
view to challenging those enforcement measures. 
8 An appeal was lodged against the decision of the court responsible for 
enforcement, which the Paris Court of Appeal disposed of by judgment of 
8 March 2018. 
9 Bank Sepah, on the one hand, and Overseas Financial and Oaktree Finance, on the 
other, lodged an appeal on a point of law against that judgment of the Paris Court 
of Appeal [(‘the judgment under appeal’)]. Those appeals in cassation, which 
were assigned case numbers B 18-18542 and G 18-21.814 respectively, were 
joined on account of the connection between them. 
II. Provisions at issue 
Council Regulation (EC) No 423/2007 of 19 April 2007 concerning restrictive 
measures against Iran 
10 Article 1(h) and (j) of Regulation No 423/2007 provides: 
‘For the purposes of this Regulation only, the following definitions shall apply: 
… 
(h) “freezing of funds” means preventing any moving, transfer, alteration, use 
of, access to, or dealing with funds in any way that would result in any 
change in their volume, amount, location, ownership, possession, character, 
destination or other change that would enable the funds to be used, 
including portfolio management; 
BANK SEPAH 
 
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… 
(j) “freezing of economic resources” means preventing the use of economic 
resources to obtain funds, goods or services in any way, including, but not 
limited to, by selling, hiring or mortgaging them; …’ 
11 Article 7(1) of that regulation provides: 
‘1. All funds and economic resources belonging to, owned, held or controlled 
by the persons, entities and bodies listed in Annex IV shall be frozen. 
Annex IV shall include the persons, entities and bodies designated by the 
United Nations Security Council or by the Sanctions Committee in 
accordance with paragraph 12 of UNSCR [United Nations Security Council 
Resolution] 1737 (2006). …’ 
Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive 
measures against Iran and repealing Regulation (EC) No 423/2007 
12 Article l(h) and (i) of Regulation No 961/2010 provides: 
‘For the purposes of this Regulation, the following definitions shall apply: 
… 
(h) “freezing of economic resources” means preventing the use of economic 
resources to obtain funds, goods or services in any way, including, but not 
limited to, by selling, hiring or mortgaging them; 
(i) “freezing of funds” means preventing any move, transfer, alteration, use of, 
access to, or dealing with funds in any way that would result in any change 
in their volume, amount, location, ownership, possession, character, 
destination or other change that would enable the funds to be used, 
including portfolio management; …’ 
13 Article 16(1) of that regulation provides: 
‘1. All funds and economic resources belonging to, owned, held or controlled 
by the persons, entities and bodies listed in Annex VII shall be frozen. 
Annex VII shall include the persons, entities and bodies designated by the 
United Nations Security Council or by the Sanctions Committee in 
accordance with paragraph 12 of UNSCR 1737 (2006), paragraph 7 of 
UNSCR 1803 (2008) or paragraph 11, 12 or 19 of UNSCR 1929 (2010). …’ 
Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive 
measures against Iran and repealing Regulation (EU) No 961/2010 
14 Article 1(j) and (k) of Regulation No 267/2012 provides: 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-340/20 
 
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‘For the purposes of this Regulation the following definitions shall apply: 
… 
(j) “freezing of economic resources” means preventing the use of economic 
resources to obtain funds, goods or services in any way, including, but not 
limited to, by selling, hiring or mortgaging them; 
(k) “freezing of funds” means preventing any move, transfer, alteration, use of, 
access to, or dealing with funds in any way that would result in any change 
in their volume, amount, location, ownership, possession, character, 
destination or other change that would enable the funds to be used, 
including portfolio management; …’ 
15 Article 23(1) of that regulation provides: 
‘1. All funds and economic resources belonging to, owned, held or controlled 
by the persons, entities and bodies listed in Annex VIII shall be frozen. 
Annex VIII includes the persons, entities and bodies designated by the 
United Nations Security Council or by the Sanctions Committee in 
accordance with paragraph 12 of UNSCR 1737 (2006), paragraph 7 of 
UNSCR 1803 (2008) or paragraph 11, 12 or 19 of UNSCR 1929 (2010). …’ 
III. Grounds relied on by Bank Sepah in support of its appeal (B 18-
18542) 
16 The judgment under appeal, inter alia, dismissed Bank Sepah’s claims for, first, an 
order to stop interest from running on account of the occurrence of force majeure 
and, secondly, an exemption from the increase in the statutory interest rate 
provided for in Article L. 313-3 of the code monétaire et financier (Monetary and 
Financial Code) in the event of a court decision making a financial award. 
17 In support of its appeal, Bank Sepah relies on a first ground alleging that, under 
French law, the freezing of its assets constituted a case of force majeure which 
prevented it from fulfilling its payment obligation and made it impossible for 
Overseas Financial and Oaktree Finance to receive any payment from it. 
18 Bank Sepah also relies, in the alternative, on a second ground alleging 
infringement of Article L. 313-3 of the Monetary and Financial Code.  
IV. Sole ground relied on by Overseas Financial and Oaktree Finance in 
support of their appeal (G 18-21.814) 
19 The judgment under appeal, inter alia, held that the interest claimed by Overseas 
Financial and Oaktree Finance in respect of the period prior to 17 May 2011 was 
time barred, because they could not rely on any ground for interruption of the 
limitation period and had not taken any steps themselves to stop the limitation 
BANK SEPAH 
 
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period from running even though they had the opportunity to do so, since ‘there 
was nothing to preclude [them] … from initiating enforcement measures, even if 
only on a preventive basis, in respect of a retained asset or claim, as such retention 
only suspends the earmarking effect of any attachment of receivables’. 
20 In support of their appeal, Overseas Financial and Oaktree Finance rely on a sole 
ground alleging, inter alia, infringement of Articles 1 and 7 of Regulation 
No 423/2007, reproduced in Articles 1 and 17 of Regulation No 961/2010.  
21 Overseas Financial and Oaktree Finance contend that the limitation period does 
not run against the person barred from bringing proceedings as a consequence of a 
statutory impediment and that a law imposing a fund-freezing measure prevents 
the creditor of a person to whom such a measure applies from initiating any 
enforcement measures relating to the frozen funds, including on a preventive 
basis. They assert that any preventive measure would amount to an alteration of 
the funds resulting in a change in their destination. That statutory impediment is 
also apparent from the Minister for the Economy’s refusal to authorise in their 
favour the release of funds belonging to Bank Sepah, an authorisation required by 
Article 8 of Regulation No 423/2007 and subsequently by Article 17 of 
Regulation No 961/2010. 
V. Findings of the Court of Cassation 
The first ground relied on by Bank Sepah in support of appeal B 18-18.542, 
alleging the existence of force majeure 
22 The Court of Cassation considers that freezing the assets of a person or entity who 
is subject to that measure on account of their activities does not constitute force 
majeure for the affected party, in the absence of an extraneous event.  
23 The Court of Cassation considers that the impossibility of Bank Sepah fulfilling 
its payment obligation, on which Bank Sepah relies, is not the result of 
circumstances extraneous to its activity and therefore dismisses the first ground 
put forward by it. 
Sole ground raised by Overseas Financial and Oaktree Finance in support of 
appeal G 18-21.814 
24 The Court of Cassation reasons that the outcome of the proceedings hinges on 
whether Overseas Financial and Oaktree Finance could have interrupted the 
limitation period by implementing protective or enforcement measures in respect 
of Bank Sepah’s frozen assets. 
25 The Court of Cassation notes that Regulations No 423/2007, No 961/2010 and 
No 267/2012 do not contain any provision expressly prohibiting a creditor from 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-340/20 
 
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implementing protective or enforcement measures in respect of a debtor’s frozen 
property. 
26 It also notes that those regulations define ‘freezing of funds’ as ‘preventing any 
move, transfer, alteration, use of, access to, or dealing with funds in any way that 
would result in any change in their volume, amount, location, ownership, 
possession, character, destination or other change that would enable the funds to 
be used, including portfolio management’ and ‘freezing of economic resources’ as 
‘preventing the use of economic resources to obtain funds, goods or services in 
any way, including, but not limited to, by selling, hiring or mortgaging them’. 
27 In the light of those definitions, the Court of Cassation considers that all that 
appears to be prohibited, in the case of frozen funds, is ‘any move, transfer, 
alteration, use of, access to, or dealing with funds in any way that would result in 
any change in their volume, amount, location, ownership, possession, character, 
destination or other change that would enable the funds to be used, including 
portfolio management’, and, in the case of economic resources, ‘the use of 
economic resources to obtain funds, goods or services in any way, including, but 
not limited to, by selling, hiring or mortgaging them’. 
28 The Court of Cassation is of the view that the implementation of measures which 
do not fall within any of those prohibitions cannot, therefore, be excluded in 
respect of frozen assets. 
29 Furthermore, the Court of Cassation considers it likely that measures which cause 
an outflow of assets from the debtor’s estate (earmarking effect) may be 
implemented in respect of frozen assets only with prior authorisation from the 
competent national authority and only in the situations referred to in Articles 8 to 
10 of Regulation No 423/2007, Articles 17 to 19 of Regulation No 961/2010 and 
subsequently Articles 24 to 28 of Regulation No 267/2012. 
30 The question arises, therefore, whether measures which do not have such an 
earmarking effect may be implemented, without prior authorisation, in respect of 
frozen assets. Those measures are judicial liens and preventive attachments, which 
are preventive measures. 
31 Judicial liens, whether they are imposed on immovable property (mortgage), on 
business assets or on shares or transferable securities (collateral security), have no 
earmarking effect. Their only effect is that the claim held by the party which 
established the judicial lien must be paid on a priority basis out of the transfer 
price in the event of transfer of the assets and rights on which the lien was 
imposed. 
32 Preventive attachments may cover, inter alia, monetary claims or shareholder 
rights and transferable securities. They have no earmarking effect. The attached 
property, claims and rights remain within the debtor’s estate.  
BANK SEPAH 
 
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33 Under Article L. 523-1 of the code des procédures civiles d’exécution (Code of 
Civil Enforcement Proceedings), the preventive attachment of claims is to produce 
the effects of a consignment provided for in Article 2350 of the code civil (Civil 
Code), under which ‘the deposit or consignment of sums, effects or securities, 
ordered by a court as a guarantee or as a preventive measure, entails a special 
appropriation and a right of preference within the meaning of Article 2333’. 
Article 2333 of that code states that ‘a pledge is an agreement under which the 
pledgor grants a creditor the right to be paid in preference to his or her other 
creditors out of a tangible movable asset or a set of tangible movable assets, 
whether present or future’. 
34 The Court of Cassation enquires whether, despite the lack of earmarking effect, 
such measures do not entail a change in the ‘destination’ of the funds to which 
they apply, within the meaning of that term in the definition of ‘freezing of funds’.  
35 It considers that Article 1(h) of Regulation No 423/2007, Article 1(i) of 
Regulation No 961/2010 and Article 1(k) of Regulation No 267/2012 might 
conceivably be interpreted as meaning that the right to be paid on a priority basis 
out of the transfer price of shareholder rights or transferable securities, such as the 
special appropriation of claims and the right of preference over them, change the 
destination of those funds. 
36 More generally, it asks whether, despite the lack of earmarking effect, judicial 
liens and preventive attachments are not capable of enabling the ‘use of’ the funds 
to which they apply, within the meaning of that term in the definition of ‘freezing 
of funds’, and the ‘use of’ the economic resources to which they apply ‘to obtain 
funds, goods or services in any way’, within the meaning of that expression in the 
definition of ‘freezing of economic resources’.  
37 Those measures ensure that the person implementing them will be paid on a 
priority basis out of the assets, rights and claims attached as a preventive measure, 
once the freezing has been lifted. They could, therefore, be regarded as liable to 
encourage an economic operator to conclude contracts with the person or entity 
whose assets are frozen, which would be tantamount to the use by that person or 
entity of the economic value of their assets classified as funds, or to obtaining, as 
a result of the economic value of their assets classified as economic resources, 
funds, goods or services. 
38 The Court of Cassation notes that there is no such risk in the present case, since 
Overseas Financial and Oaktree Finance are seeking to recover a claim established 
by a court decision subsequent to the freezing of Bank Sepah’s assets, based on 
grounds unrelated to Iran’s nuclear and ballistic programme and which pre-date 
the imposition of the freezing order. 
39 The question arises, therefore, whether the possibility of implementing, without 
prior authorisation, a measure in respect of frozen assets must be assessed by 
reference to the type of measure, without regard to the specific features of the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-340/20 
 
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case, or whether, on the contrary, those specific features may be taken into 
account. 
40 The Court of Cassation considers that the answer to those questions is not 
immediately obvious, while the EU regulations do not contain any express 
provision and neither the General Court nor the Court of Justice has had the 
opportunity to give a ruling. 
41 It has, therefore, decided to stay the proceedings relating to the second ground in 
appeal B 18-18.542 and the sole ground in appeal G 18-21.814 and to make a 
reference to the Court of Justice for a preliminary ruling under Article 267 TFEU. 
VI. Questions referred for a preliminary ruling 
42 The Court of Cassation refers the following questions to the Court of Justice of the 
European Union for a preliminary ruling: 
‘(1) Are Article 1(h) and (j) and Article 7(1) of Regulation (EC) No 423/2007, 
Article 1(i) and (h) and Article 16(1) of Regulation (EU) No 961/2010 and 
Article 1(k) and (j) and Article 23(1) of Regulation (EU) No 267/2012 to be 
interpreted as precluding a measure with no earmarking effect, such as a 
judicial lien or preventive attachment, provided for in the French Code of 
Civil Enforcement Proceedings, from being implemented, without prior 
authorisation from the competent national authority, in respect of frozen 
assets? 
(2) Is it relevant to the answer to the first question that the grounds for the claim 
to be recovered from the person or entity whose assets are frozen are 
unrelated to Iran’s nuclear and ballistic programme and pre-date United 
Nations Security Council Resolution 1737 (2006) of 23 December 2006?’