62010TJ0494(01)
JUDGMENT OF THE GENERAL COURT (Fourth Chamber)
5 February 2013 (
*1
)
‛Common foreign and security policy — Restrictive measures 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 — Manifest error of assessment’
In Case T-494/10,
Bank Saderat Iran, established in Teheran (Iran), represented initially by S. Gadhia and S. Ashley, Solicitors, D. Anderson QC and R. Blakeley, Barrister, and subsequently by Gadhia, Ashley, Blakeley and D. Wyatt QC, and lastly by Ashley, Blakeley and Wyatt and by S. Jeffrey and A. Irvine, Solicitors,
applicant,
v
Council of the European Union, represented by M. Bishop and R. Liudvinaviciute-Cordeiro, acting as Agents,
defendant,
supported by
European Commission, represented by S. Boelaert and M. Konstantinidis, acting as Agents,
intervener,
APPLICATION for annulment of 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), Council Implementing Regulation (EU) No 668/2010 of 26 July 2010 implementing Article 7(2) of Regulation (EC) No 423/2007 concerning restrictive measures against Iran (OJ 2010 L 195, p. 25), Council Decision 2010/644/CFSP of 25 October 2010 amending Decision 2010/413 (OJ 2010 L 281, p. 81), Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran and repealing Regulation (EC) No 423/2007 (OJ 2010 L 281, p. 1), Council Decision 2011/783/CFSP of 1 December 2011 amending Decision 2010/413 (OJ 2011 L 319, p. 71), Council Implementing Regulation (EU) No 1245/2011 of 1 December 2011 implementing Regulation No 961/2010 (OJ 2011 L 319, p. 11) and Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation No 961/2010 (OJ 2012 L 88, p. 1) in so far as those measures concern the applicant,
THE GENERAL COURT (Fourth Chamber),
composed of I. Pelikánová (Rapporteur), President, K. Jürimäe and M. van der Woude, Judges,
Registrar: N. Rosner, Administrator,
having regard to the written procedure and further to the hearing on 23 May 2012,
gives the following
Judgment
Background to the dispute
1
The applicant, Bank Saderat Iran, is an Iranian commercial bank.
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
On 26 July 2010 the applicant was named 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, the applicant’s name was listed in Annex V to Council Regulation (EC) No 423/2007 of 19 April 2007 concerning restrictive measures against Iran (OJ 2007 L 103, p. 1), by means of Council Implementing Regulation (EU) No 668/2010 of 26 July 2010 implementing Article 7(2) of Regulation No 423/2007 (OJ 2010 L 195, p. 25). As a result of that listing, the funds and economic resources of the applicant were frozen.
5
In Decision 2010/413, the Council of the European Union adopted the following reasons:
‘Bank Saderat is an Iranian state-owned bank (94%-owned by [the Iranian] government). Bank Saderat has provided financial services for entities procuring on behalf of Iran’s nuclear and ballistic missile programmes, including entities designated under [United Nations Security Council Resolution] 1737. Bank Saderat handled [Defence Industries Organisation; “DIO”] (sanctioned in UNSCR 1737) and Iran Electronics Industries payments and letters of credit as recently as March 2009. In 2003 Bank Saderat handled letter[s] of credit on behalf of [Iranian] nuclear-related Mesbah Energy Company (subsequently sanctioned in [United Nations Security Council Resolution] 1737).’
6
The reasons adopted in Implementing Regulation No 668/2010 are the same as those adopted in Decision 2010/413.
7
By letter of 27 July 2010 the Council informed the applicant that its name had been placed on the list in Annex II to Decision 2010/413 and on that in Annex V to Regulation No 423/2007.
8
By letters of 18 and 25 August and 2, 9 and 30 September 2010, the applicant asked the Council to disclose to it the evidence which was the basis of the Council’s adoption of restrictive measures against it. By letter of 15 September 2010 the applicant also asked the Council to reconsider the decision to place it on the list in Annex II to Decision 2010/413 and on that in Annex V to Regulation No 423/2007.
9
The listing of the applicant’s name in Annex II to Decision 2010/413 was continued by Council Decision 2010/644/CFSP of 25 October 2010 amending Decision 2010/413 (OJ 2010 L 281, p. 81). The reasons adopted are as follows:
‘Bank Saderat is an Iranian bank partly owned by the Iranian government. Bank Saderat has provided financial services for entities procuring on behalf of Iran’s nuclear and ballistic missile programmes, including entities designated under [United Nations Security Council Resolution] 1737. Bank Saderat handled DIO (sanctioned in UNSCR 1737) and Iran Electronics Industries payments and letters of credit as recently as March 2009. In 2003 Bank Saderat handled letters of credit on behalf of Iranian nuclear-related Mesbah Energy Company (subsequently sanctioned in [United Nations Security Council Resolution] 1737.’
10
Since Regulation No 423/2007 was repealed by Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran (OJ 2010 L 281, p. 1), the applicant’s name was inserted by the Council in Annex VIII to the latter regulation. Consequently, the funds and economic resources of the applicant were frozen under Article 16(2) of that regulation.
11
The reasons stated in Regulation No 961/2010 are, in essence, the same as those stated in Decision 2010/644.
12
By letter of 28 October 2010 the Council replied to the applicant’s letter of 15 September 2010 stating that, after a review, it rejected the applicant’s request to have its name removed from the lists in Annex II to Decision 2010/413 and Annex VIII to Regulation No 961/2010. The Council stated, in that regard, that it disagreed with the applicant’s contention that its activities in relation to letters of credit could not have contributed to nuclear proliferation. In reply to the request for access to the applicant’s file, the Council sent to it copies of two proposals for the adoption of restrictive measures submitted by Member States.
13
As an annex to its rejoinder, the Council sent to the applicant a copy of a third proposal for the adoption of restrictive measures submitted by a Member State.
14
The listing of the applicant’s name in Annex II to Decision 2010/413 and in Annex VIII to Regulation No 961/2010 was not affected by the entry into force of Council Decision 2011/783/CFSP of 1 December 2011 amending Decision 2010/413 (OJ 2011 L 319, p. 71) and Council Implementing Regulation (EU) No 1245/2011 of 1 December 2011 implementing Regulation No 961/2010 (OJ 2011 L 319, p. 11).
15
Since Regulation No 961/2010 was repealed by Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran (OJ 2012 L 88, p. 1), the applicant’s name was included by the Council in Annex IX to the latter regulation. The reasons adopted are the same as those adopted in Decision 2010/644. Consequently, the applicant’s funds and economic resources were frozen pursuant to Article 23(2) of that regulation.
Procedure and forms of order sought by the parties
16
By application lodged at the Registry of the General Court on 7 October 2010, the applicant brought the present action.
17
By document lodged at the Court’s Registry on 5 November 2010, the applicant adapted its heads of claim following the adoption of Decision 2010/644 and Regulation No 961/2010.
18
By document lodged at the Court’s Registry on 14 January 2011 the European Commission sought leave to intervene in the present proceedings in support of the Council. By order of 8 March 2011 the President of the Fourth Chamber of the General Court granted leave to intervene.
19
By document lodged at the Court’s Registry on 10 February 2012, the applicant, first, adapted its heads of claim following the adoption of Decision 2011/783 and Implementing Regulation No 1245/2011 and, secondly, requested that the contested measures be annulled, if appropriate, with immediate effect.
20
By document lodged at the Court’s Registry on 27 April 2012, the applicant adapted its heads of claim following the adoption of Regulation No 267/2012.
21
On hearing the report of the Judge-Rapporteur, the Court (Fourth Chamber) decided to open the oral procedure and, by way of measures of organisation of procedure provided for under Article 64 of its Rules of Procedure, requested the parties to lodge certain documents and put to them written questions. The parties did what was required.
22
The parties presented oral argument and answered the questions put by the Court at the hearing on 23 May 2012.
23
By order of the Court (Fourth Chamber) of 4 September 2012, the oral procedure was re-opened in order to lodge in the file the observations of the applicant on the order of the President of the Court of Justice of 19 July 2012 in Case C-110/12 P(R) Akhras v Council, and to obtain the observations of the other parties. The oral procedure was again closed on 4 October 2012.
24
The applicant claims that the Court should:
—
annul, with immediate effect, point 7 of Table B of Annex II to Decision 2010/413, point 5 of Table B of the Annex to Implementing Regulation No 668/2010, point 7 of Table I.B of the Annex to Decision 2010/644, point 7 of Table B of Annex VIII to Regulation No 961/2010, Decision 2011/783, Implementing Regulation No 1245/2011 and point 7 of Table I.B of Annex IX to Regulation No 267/2012, in so far as those measures concern the applicant;
—
order the Council to pay the costs.
25
The Council and the Commission contend that the Court should:
—
dismiss the action;
—
order the applicant to pay the costs.
Law
26
The applicant relies on three pleas in law. The first plea is a claim of an infringement of the obligation to state reasons, the applicant’s rights of defence and its right to effective judicial protection. The second plea is a claim of a manifest error of assessment as regards the adoption of restrictive measures against it. The third plea is a claim of an infringement of its right to property and of the principle of proportionality.
27
The Council and the Commission consider that the applicant’s pleas are unfounded. They further maintain, as a preliminary point, that as an emanation of the Iranian State the applicant cannot rely on fundamental rights protection and guarantees.
28
Before considering the various pleas and arguments submitted by the parties, it is appropriate to examine the issue of whether the adaptations to the applicant’s claims are admissible.
The adaptations to the applicant’s claims
29
As is clear from paragraphs 9, 10 and 15 above, since the date when the application was brought the list in Annex II to Decision 2010/413 has been replaced by a new list, adopted in Decision 2010/644, and Regulation No 423/2007, as amended by Implementing Regulation No 668/2010, has been repealed and replaced by Regulation No 961/2010, which has itself been repealed and replaced by Regulation No 267/2012. Further, in the recitals in the preambles of Decision 2011/783 and Implementing Regulation No 1245/2011, the Council explicitly stated that it had carried out a complete review of the list in Annex II to Decision 2010/413 and in Annex VIII to Regulation No 961/2010 and that it had concluded that the persons, entities and bodies listed therein, including the applicant, should continue to be subject to restrictive measures. The applicant has adapted its initial claims so that its action is directed to the annulment not only of Decision 2010/413 and Implementing Regulation No 668/2010 but also Decision 2010/644, Regulation No 961/2010, Decision 2011/783, Implementing Regulation No 1245/2011 and Regulation No 267/2012 (together, ‘the contested measures’). The Council and the Commission have not objected to that adaptation.
30
It is to be borne in mind in this connection that, when a decision or a regulation of direct and individual concern to an individual is replaced, during the proceedings, by another measure with the same subject-matter, this is to be considered a new factor allowing the applicant to adapt its claims and pleas in law. It would be contrary to the principle of due administration of justice and to the requirements of procedural economy to oblige the applicant to make a fresh application. Moreover, it would be inequitable if the institution in question were able, in order to counter criticisms of a measure, contained in an application to the Courts of the European Union, to amend the contested measure or to substitute another for it and to rely in the proceedings on such an amendment or substitution in order to deprive the other party of the opportunity of extending his original pleadings to the later measure or of submitting supplementary pleadings directed against that decision (see, by analogy, Case T-256/07 People’s Mojahedin Organization of Iran v Council [2008] ECR II-3019, paragraph 46 and case-law cited).
31
The same conclusion applies in respect of measures, such as Decision 2011/783 and Implementing Regulation No 1245/2011, which declare that a decision or a regulation is to continue to affect directly and individually certain individual parties, further to a process of review expressly required by the decision or regulation concerned.
32
It is therefore appropriate, in the present case, to hold that the applicant may seek the annulment of Decision 2010/644, Regulation No 961/2010, Decision 2011/783, Implementing Regulation No 1245/2011 and Regulation No 267/2012, in so far as those measures concern the applicant (see, to that effect and by analogy, People’s Mojahedin Organization of Iran v Council, paragraph 30 above, paragraph 47).
Whether it is open to the applicant to rely on fundamental rights protection and guarantees
33
The Council and the Commission contend that, under European Union law, legal persons who are emanations of non-Member countries cannot rely on fundamental rights protection and guarantees. They claim that since the applicant is an emanation of the Iranian State, that rule applies to it.
34
In that regard, it must first be observed that neither in the Charter of Fundamental Rights of the European Union (OJ 2010 C 83, p. 389) nor in the Treaties are there any provisions which state that legal persons which are emanations of States are not entitled to the protection of fundamental rights. On the contrary, the provisions of the Charter which are relevant to the pleas raised by the applicant, and in particular Articles 17, 41 and 47, guarantee the rights of ‘everyone’, a wording which includes legal persons such as the applicant.
35
None the less, the Council and the Commission rely, in this context, on Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed at Rome on 4 November 1950 (‘ECHR’), the effect of which is that the European Court of Human Rights may not accept applications submitted to it by governmental organisations.
36
First, Article 34 of the ECHR is a procedural provision which is not applicable to procedures before the Courts of the European Union. Secondly, according to the case-law of the European Court of Human Rights, the aim of that provision is to ensure that a State which is a party to the ECHR is not both applicant and defendant before that court (see, to that effect, judgment of the European Court of Human Rights of 13 December 2007, Islamic Republic of Iran Shipping Lines v Turkey, No 40998/98, § 81, 2007-V). That argument is not applicable to the present case.
37
The Council and the Commission also argue that the justification of the rule on which they rely is that a State is the guarantor of respect for fundamental rights in its territory but cannot qualify for such rights
38
However, even if that justification were applicable in relation to an internal situation, the fact that a State is the guarantor of respect for fundamental rights in its own territory is of no relevance as regards the extent of the rights to which legal persons which are emanations of that same State may be entitled in the territory of other States.
39
In the light of the foregoing, it must be held that European Union law contains no rule preventing legal persons which are emanations of non-Member countries from taking advantage of fundamental rights protection and guarantees. Those rights may therefore be relied upon by those persons before the Courts of the European Union in so far as those rights are compatible with their status as legal persons.
40
In any event, the Council and the Commission have not put forward any evidence capable of proving that the applicant was in fact an emanation of the Iranian State, that is, an entity which participated in the exercise of governmental powers or which ran a public service under governmental control (see, to that effect, judgment of the European Court of Human Rights, Islamic Republic of Iran Shipping Lines v Turkey, paragraph 36 above, § 79).
41
In that regard, first, the Council maintains that the applicant runs a public service under the control of the Iranian government since it provides financial services which are essential for the operation of the Iranian economy. The Council does not however contest the applicant’s claims that those services represent commercial activities carried out in a competitive sector and subject to the ordinary law. In those circumstances, the fact that those activities are essential for the operation of a State’s economy cannot, by itself, confer on them the status of a public service.
42
Next, the Commission maintains that the fact that the applicant is involved in nuclear proliferation demonstrates that it participates in the exercise of governmental powers. However, in adopting that approach the Commission assumes the truth of a premise which the applicant denies is true and which is a question of fact at the very core of the dispute before the Court. Further, the claimed involvement of the applicant in nuclear proliferation, as set out in the contested measures, cannot be assimilated to the exercise of State powers, but to commercial transactions entered into with entities engaged in nuclear proliferation. Consequently, that claim does not justify the classification of the applicant as an emanation of the Iranian State.
43
Lastly, the Commission considers that the applicant is an emanation of the Iranian State because of the latter’s participation in its capital. Leaving aside the fact that, according to the information provided by the applicant, which is not disputed by the Council and the Commission, the holding concerned is only a minority shareholding, that participation does not by itself imply that the applicant participates in the exercise of governmental powers or that it runs a public service.
44
In the light of all the foregoing, it must be concluded that the applicant may take advantage of fundamental rights protection and guarantees.
The first plea in law: infringement of the obligation to state reasons, the applicant’s rights of defence and its right to effective judicial protection
45
By its first plea in law, the applicant claims that the Council infringed the obligation to state reasons, the applicant’s rights of defence and its right to effective judicial protection since, first, the Council did not provide it with sufficient information to enable it to make effective representations regarding the adoption of restrictive measures against it and to guarantee it a fair hearing and, secondly, both the assessment prior to the adoption of the restrictive measures against it and the regular review of those measures are vitiated by a number of errors.
46
The Council, supported by the Commission, denies that the applicant’s arguments are well founded. It submits, in particular, that the applicant cannot plead the principle of respect for the rights of the defence.
47
Firstly, it must be recalled that the purpose of the obligation to state the reasons for an act adversely affecting a person, as provided for by the second paragraph of Article 296 TFEU and, more particularly in this case, by Article 24(3) of Decision 2010/413, Article 15(3) of Regulation No 423/2007, Article 36(3) of Regulation No 961/2010 and Article 46(3) of Regulation No 267/2012, is, first, to provide the person concerned with sufficient information to make it possible to determine whether the measure is well founded or whether it is vitiated by an error which may permit its validity to be contested before the Courts of the European Union and, secondly, to enable the latter to review the lawfulness of that measure. The obligation to state reasons therefore constitutes an essential principle of European Union law which may be derogated from only for compelling reasons. The statement of reasons must therefore in principle be notified to the person concerned at the same time as the act adversely affecting him, for failure to state the reasons cannot be remedied by the fact that the person concerned learns the reasons for the act during the proceedings before the Courts of the European Union (see, to that effect, Case T-390/08 Bank Melli Iran v Council [2009] ECR II-3967, paragraph 80 and case-law cited).
48
Consequently, unless there are compelling reasons touching on the security of the European Union or of its Member States or the conduct of their international relations which prevent the disclosure of certain information, the Council is required to inform the entity covered by restrictive measures of the actual and specific reasons why it considers that those measures had to be adopted. It must thus state the matters of fact and law which constitute the legal basis of the measures concerned and the considerations which led it to adopt them (see, to that effect, Bank Melli Iran v Council, paragraph 47 above, paragraph 81 and case-law cited).
49
Moreover, the statement of reasons must be appropriate to the measure at issue and to 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 statement of reasons to specify all the relevant matters of fact and law, since the question whether the statement of reasons is adequate 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. In particular, the reasons given for a decision are sufficient if it was adopted in circumstances known to the party concerned which enable him to understand the scope of the measure adversely affecting him (see Bank Melli Iran v Council, paragraph 47 above, paragraph 82 and case-law cited).
50
Secondly, according to settled case-law, observance of the rights of the defence, especially the right to be heard, in all proceedings initiated against an entity which may lead to a measure adversely affecting that entity, is a fundamental principle of European Union law which must be guaranteed, even when there are no rules governing the procedure in question (Bank Melli Iran v Council, paragraph 47 above, paragraph 91).
51
The principle of respect for the rights of the defence requires, first, that the entity concerned must be informed of the evidence adduced against it to justify the measure adversely affecting it. Secondly, it must be afforded the opportunity effectively to make known its view on that evidence (see, by analogy, Case T-228/02 Organisation des Modjahedines du peuple d’Iran v Council [2006] ECR II-4665, paragraph 93).
52
Consequently, as regards an initial measure whereby the funds of an entity are frozen, unless there are compelling reasons touching on the security of the European Union or of its Member States or the conduct of their international relations which preclude it, the evidence adduced against that entity should be disclosed to it either concomitantly with or as soon as possible after the adoption of the measure concerned. At the request of the entity concerned, it also has the right to make known its view on that evidence after the adoption of the measure. Subject to the same proviso, any subsequent decision to freeze funds must as a general rule be preceded by disclosure of further evidence adduced against the entity concerned and a further opportunity for it to make known its view (see, by analogy, Organisation des Modjahedines du peuple d’Iran v Council, paragraph 51 above, paragraph 137).
53
It must also be observed that, when sufficiently precise information has been disclosed, 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 Bank Melli Iran v Council, paragraph 47 above, paragraph 97 and case-law cited).
54
Thirdly, the principle of effective judicial protection is a general principle of European Union law, stemming from the constitutional traditions common to the Member States, which has been enshrined in Articles 6 and 13 of the ECHR and in Article 47 of the Charter of Fundamental Rights of the European Union. The effectiveness of judicial review means that the European Union authority in question is bound to disclose the grounds for a restrictive measure to the entity concerned, so far as possible, either when that measure is adopted or, at the very least, as swiftly as possible after that decision, in order to enable the entity concerned to exercise, within the periods prescribed, its right to bring an action. Observance of that obligation to disclose the grounds is necessary both to enable the persons to whom restrictive measures are addressed to defend their rights in the best possible conditions and to decide, with full knowledge of the relevant facts, whether there is any point in their applying to the Courts of the European Union, and also to put the latter fully in a position to carry out the review of the lawfulness of the measure in question which is the duty of those courts (see, to that effect and by analogy, Joined Cases C-402/05 P and C-415/05 P Kadi and Al Barakaat International Foundation v Council and Commission [2008] ECR I-6351, paragraphs 335 to 337 and case-law cited).
55
In the light of that case-law, the Court considers that the arguments submitted by the parties in respect of the first plea in law should be examined in five stages, as follows. First, the Court must examine the preliminary argument of the Council and the Commission that the applicant cannot rely on the principle of respect for the rights of the defence. Secondly, the Court must examine the arguments relating to (i) the obligation to state reasons and (ii) the claimed infringement of the applicant’s rights of defence as regards the initial disclosure of the evidence adduced against it. Thirdly, the Court must examine the arguments on the claimed infringement of the rights of the defence in relation to access to the Council’s file. Fourthly, the Court will examine the arguments dealing with (i) the claimed infringement of the applicant’s rights of defence as regards whether it had the opportunity to state its point of view and (ii) the claimed infringement of its right to effective judicial protection. Fifthly, the arguments relating to the claimed errors vitiating the assessment and review carried out by the Council will be considered.
Whether the applicant may rely on the principle of respect for the rights of the defence
56
The Council and the Commission dispute the applicability of the principle of respect for the rights of the defence to the present case. Referring to Case T-181/08 Tay Za v Council [2010] ECR II-1965, paragraphs 121 to 123, they claim that the applicant was not the subject of restrictive measures because of its own activities, but because of its membership of a general category of persons and entities which supported nuclear proliferation. Consequently, the procedure for the adoption of the restrictive measures was not initiated against the applicant within the meaning of the case-law cited in paragraph 50 above and the applicant can consequently not rely on the rights of the defence or can do so to only a limited extent.
57
That argument cannot be accepted.
58
First, the judgment of the General Court in Tay Za v Council, paragraph 56 above, was set aside on appeal, in its entirety, by the judgment of the Court of Justice of 13 March 2012 in Case C-376/10 P Tay Za v Council [2012] ECR. Consequently, what is stated in the former judgment is no longer part of the legal order of the European Union and cannot validly be relied on by the Council and the Commission.
59
Secondly, Article 24(3) and (4) of Decision 2010/413, Article 15(3) of Regulation No 423/2007, Article 36(3) and (4) of Regulation No 961/2010 and Article 46(3) and (4) of Regulation No 267/2012 set out provisions to safeguard the rights of defence of entities which are subject to restrictive measures adopted under those acts. Respect for those rights is subject to review by the Courts of the European Union (see, to that effect, Bank Melli Iran v Council, paragraph 47 above, paragraph 37).
60
In those circumstances, it must be concluded that the principle of respect for the rights of the defence, as stated in paragraphs 50 to 53 above, may be relied on by the applicant in this case.
The obligation to state reasons and the initial disclosure of inculpatory evidence
61
It must be observed at the outset that in order to assess whether the obligation to state reasons and the obligation to disclose to the entity concerned the evidence considered to inculpate it have been fulfilled, there must be taken into consideration not only the reasons stated in the contested measures, but the three proposals for the adoption of restrictive measures sent by the Council to the applicant.
62
First, it is apparent from those proposals, as disclosed to the applicant, that they were submitted to the delegations of the Member States in the context of adoption of the restrictive measures affecting the applicant and that those proposals constitute, consequently, evidence on which those measures were based.
63
Secondly, it is true that the three proposals were disclosed to the applicant after the action was brought and, as regards the proposal annexed to the rejoinder, after the adaptation of claims following the adoption of Decision 2010/644 and Regulation No 961/2010. Consequently, those proposals cannot validly supplement the reasons stated for Decision 2010/413, Implementing Regulation No 668/2010, and, as regards the proposal annexed to the rejoinder, Decision 2010/644 and Regulation No 961/2010. They may, however, be taken into consideration for the assessment of the legality of the later measures, namely Decision 2011/783, Implementing Regulation No 1245/2011 and Regulation No 267/2012 as regards the three proposals, and Decision 2010/644 and Regulation No 961/2010 as regards the proposals disclosed on 28 October 2010.
64
The contested measures state the following four reasons as regards the applicant:
—
the applicant is owned by the Iranian State, either 94%, according to Decision 2010/413 and Implementing Regulation No 668/2010, or partly, according to the subsequent measures;
—
the applicant has provided financial services to entities procuring on behalf of Iran’s nuclear and ballistic missile programmes; among those entities are entities subject to United Nations Security Council Resolution 1737 (2006);
—
in March 2009 the applicant was still handling payments and letters of credit of Defence Industries Organisation (‘DIO’) and Iran Electronics Industries (‘IEI’), which are the subject of restrictive measures;
—
in 2003 the applicant handled letters of credit on behalf of Mesbah Energy Company, which is linked to the Iranian nuclear programme.
65
The reasons stated in the proposals for the adoption of restrictive measures annexed to the Council’s letter of 28 October 2010 entirely overlap the reasons stated in the contested measures.
66
As regards the third proposal for the adoption of restrictive measures, which was annexed to the rejoinder, it adds a fifth reason, that the applicant provided financial services to Sanam Industrial Group.
67
The applicant maintains that such a statement of reasons does not explain in sufficient detail why restrictive measures against it were adopted. It considers that that deficiency implies, further, an infringement of its rights of defence.
68
The Council, supported by the Commission, contends that the applicant’s argument is unfounded.
69
The first reason is sufficiently detailed, since it enables the applicant to appreciate that the allegation made against it by the Council is that part of its share capital is held by the Iranian State.
70
As regards the second reason, it must be said that it is not clear, at first sight, whether this is a general allegation supplemented and illustrated by the following reasons or whether this is in fact an independent reason. In the absence of any explicit linking of the various reasons, the latter interpretation of the reasons stated in the contested measures must be adopted.
71
Thus interpreted, the second reason is excessively vague, since it contains no detail of the identity of the entities to which the financial services concerned were supplied.
72
The third, fourth and fifth reasons are sufficiently detailed, since they specify the names of the entities concerned, and, in the case of the third and fourth reasons, the type of financial services provided and when they were provided.
73
In the light of the foregoing, it must be held that, as regards the second reason on which it relies, the Council is in breach of the obligation to state reasons and the obligation to disclose to the applicant, as the entity concerned, the evidence adduced against it. On the other hand, as regards the other reasons, those obligations were respected.
Access to the file
74
As stated in paragraphs 12 and 13 above, the Council notified the applicant of two proposals for the adoption of restrictive measures submitted by Member States, as an annex to its letter of 28 October 2010, and subsequently of a third proposal, as an annex to the rejoinder.
75
The applicant complains that such disclosure is out of time, since it did not have the information concerned in good time.
76
The defence of the Council, supported by the Commission, is that, in essence, it disclosed to the applicant the proposals concerned as soon as it obtained the agreement of the Member States which submitted the proposals.
77
That argument cannot be accepted. Where the Council intends to rely on information submitted by a Member State in order to adopt restrictive measures affecting an entity, it is obliged to ensure, before the adoption of those measures, that the entity concerned can be notified of the information in question in good time so that it is able effectively to make known its point of view.
78
In the present case, it must be noted that the period within which the applicant was required by the Council to submit its observations further to the adoption of Decision 2010/413 and Implementing Regulation No 668/2010 expired on 15 September 2010.
79
Since the Council notified the applicant of the three proposals only after the expiry of that period, the Council did not give the applicant access to the material in its file in good time, contrary to the rights of the defence.
Whether the applicant had the opportunity effectively to make known its point of view and the right to effective judicial protection
80
First, the applicant claims that it did not have an opportunity effectively to make known its point of view and that, in any event, the observations which it was able to present were not taken into consideration by the Council.
81
The Council, supported by the Commission, contends that the applicant’s argument is unfounded.
82
First, it is clear that, following the adoption of the initial measures whereby the applicant’s funds were frozen, on 26 July 2010, the applicant sent a letter to the Council on 15 September 2010 setting out its point of view and asking for the restrictive measures against it to be lifted. The Council replied by letter of 28 October 2010. Next, before the adoption of Decision 2011/783 and Implementing Regulation No 1245/2011, the applicant submitted its observations to the Council by letter of 29 July 2011, to which the Council replied on 5 December 2011. Lastly, on 10 February 2012, that is, before the adoption of Regulation No 267/2012, the applicant submitted further observations to the Council, which replied by letter of 24 April 2012.
83
Accordingly, it must be held that the applicant had the opportunity effectively to make known its point of view, except as regards (i) the second reason provided by the Council, which is excessively vague (see paragraph 70 above) and (ii) the three proposals for the adoption of restrictive measures, since those proposals were not known to the applicant on 15 September 2010.
84
As regards whether the observations submitted were taken into consideration, it is admittedly true that the reply to the applicant’s arguments in the Council’s letters of 28 October 2010, 5 December 2011 and 24 April 2012 is brief. The fact remains however that the Council made clear, in the letter of 28 October 2010, that it disagreed with the applicant’s contention that its activities in relation to letters of credit could not have contributed to nuclear proliferation. The Council reiterated that position in the letters of 5 December 2011 and 24 April 2012.
85
Further, it is common ground that the Council corrected the reference to the Iranian State’s holding in the applicant’s share capital, the accuracy of which was disputed by the applicant.
86
In the light of those circumstances, it must be held that the applicant’s observations were taken into consideration by the Council during its review, contrary to what is claimed by the applicant.
87
Secondly, the applicant claims that the inadequacy of the information and evidence disclosed to it affected its right to effective judicial protection.
88
The Council, supported by the Commission, contends that that argument is unfounded.
89
As follows from paragraph 83 above, it must be held that, in so far as there was individual notification to the applicant of reasons which were sufficiently detailed, namely the first, third, fourth and fifth reasons relied on by the Council, the applicant’s right to effective judicial protection was respected.
90
On the other hand, the vagueness of the second reason provided by the Council and the late notification of the three proposals for the adoption of restrictive measures constitute an infringement of the applicant’s right to effective judicial protection.
The defects in the Council’s assessment
91
The applicant claims that the Council did not carry out a genuine assessment of the circumstances of the case, but did no more than adopt the proposals submitted by Member States. That defect affects both the assessment prior to the adoption of the restrictive measures against the applicant and the regular review of those measures.
92
Further, according to the applicant, it is clear from diplomatic cables, made public through the Wikileaks organisation (‘the diplomatic cables’), that Member States, in particular the United Kingdom, were subject to pressure from the United States Government to ensure the adoption of restrictive measures against Iranian entities. That fact, it is claimed, casts doubt on the lawfulness of the measures adopted and of the procedure for their adoption.
93
The Council, supported by the Commission, contends that the applicant’s argument is unfounded. It contends, in particular, that no account should be taken of the diplomatic cables.
94
First, it must be observed that acts which establish restrictive measures against entities allegedly involved in nuclear proliferation are acts of the Council, which must, therefore, ensure that their adoption is justified. Consequently, when adopting an initial act establishing such measures, the Council must assess the relevance and the validity of the information and evidence submitted to it, pursuant to Article 23(2) of Decision 2010/413, by a Member State or by the High Representative of the Union for Foreign Affairs and Security Policy. When adopting subsequent acts affecting the same entity, the Council is required, in accordance with Article 24(4) of that decision, to review the need to maintain those measures in the light of observations submitted by that entity.
95
In the present case, there is nothing in the Court file to suggest that the Council checked the relevance and the validity of the evidence concerning the applicant submitted to it before the adoption of Decision 2010/413 and Implementing Regulation No 668/2010. On the contrary, the incorrect statement, in those acts, on the extent of the Iranian State’s holding in the applicant’s share capital, the inaccuracy of which is not denied by the Council, is an indication that no such checking took place.
96
It is also clear from paragraphs 84 to 86 above that, when adopting the subsequent contested measures, the Council reviewed the circumstances of the case in the light of the applicant’s observations, since it corrected the statement about the Iranian State’s holding in the applicant’s share capital and expressed its view on the applicant’s arguments concerning its activities in relation to the letters of credit.
97
Secondly, as regards the diplomatic cables, the fact that some Member States were subject to diplomatic pressure, even if proved, does not imply, by itself, that such pressure affected the contested measures which were adopted by the Council or the assessment carried out by the Council when they were adopted.
98
In those circumstances, the Court must uphold the applicant’s arguments relating to the defects affecting the assessment carried out by the Council in relation to Decision 2010/413 and Implementing Regulation No 668/2010, but must reject those arguments for the remainder.
99
In the light of the foregoing, it must first be observed that the Council infringed the applicant’s rights of defence and its right to effective judicial protection in that it did not notify the applicant, in good time, of the three proposals for the adoption of restrictive measures (see paragraphs 79, 83 and 90 above). Since those proposals were relied on by the Council as justification of all the contested measures against the applicant, and taking into account the date when the last of those was notified, that defect affects the lawfulness of Decision 2010/413, Implementing Regulation No 668/2010, Decision 2010/644 and Regulation No 961/2010, in so far as those measures concern the applicant.
100
Next, when adopting Decision 2010/413 and Implementing Regulation No 668/2010, the Council did not comply with the obligation to assess the relevance and the validity of the information and evidence against the applicant submitted to it, with the consequence that those measures are tainted by illegality (see paragraphs 95 and 98 above).
101
Lastly, the Council infringed the obligation to state reasons, the applicant’s rights of defence and its right to effective judicial protection as regards the second reason relied on against the applicant (see paragraphs 70, 73, 83 and 90 above). None the less, taking into account the fact that the various reasons relied on by the Council are independent of each other and that other reasons are sufficiently detailed, that fact does not justify the annulment of Decision 2011/783, Implementing Regulation No 1245/2011 and Regulation No 267/2012. It implies only that the second reason cannot be taken into consideration for the purposes of assessment of the second plea in law on whether the restrictive measures against the applicant are well founded.
102
In the light of all the foregoing, the Court must uphold the first plea in law to the extent that it concerns the annulment of Decision 2010/413, Implementing Regulation No 668/2010, Decision 2010/644 and Regulation No 961/2010 in so far as those acts concern the applicant, and reject that plea for the remainder.
The second plea in law: manifest error of assessment in relation to the adoption of restrictive measures against the applicant
103
The applicant claims that the reasons relied on against it by the Council, set out in paragraphs 64 to 66 above, do not satisfy the conditions laid down by Decision 2010/413, Regulation No 423/2007, Regulation No 961/2010 and Regulation No 267/2012 and are not substantiated by evidence. Consequently, the Council made a manifest error of assessment by adopting restrictive measures against it on the basis of those reasons.
104
The Council, supported by the Commission, disputes the applicant’s arguments.
105
In accordance with the case-law, the judicial review of the lawfulness of a measure whereby restrictive measures are imposed on an entity extends to the assessment of the facts and circumstances relied on as justifying it, and to the evidence and information on which that assessment is based. In the event of challenge, it is for the Council to present that evidence for review by the Courts of the European Union (see, to that effect, Bank Melli Iran v Council, paragraph 47 above, paragraphs 37 and 107).
106
Having regard to that case-law, and taking into consideration the fact that the second reason relied on by the Council against the applicant does not constitute an adequate statement of reasons (see paragraph 101 above), the Court need be concerned only with determining whether the first, third, fourth and fifth reasons relied on are well founded.
107
As regards the first reason, it is now established that the applicant is not 94% owned by the Iranian State, which is no more than a minority shareholder. Accordingly, that reason is based on a mistaken factual premise as regards Decision 2010/413 and Implementing Regulation No 668/2010.
108
Further, the fact that part of the applicant’s share capital is owned by the Iranian State does not imply, by itself, that the applicant is providing support to nuclear proliferation. Consequently, the first reason provided by the Council does not justify the adoption of restrictive measures against the applicant on the basis that it provided such support.
109
As regards the fourth reason, the applicant denies having provided services to Mesbah Energy Company. Yet the Council has produced no evidence or information to establish that such services were provided, or that the applicant was aware of the involvement of Mesbah Energy Company, which in 2003 was not yet the subject of restrictive measures, in nuclear proliferation. Accordingly, it must be concluded that the fourth reason also does not justify the adoption of restrictive measures against the applicant.
110
The same finding must be made in respect of the fifth reason, in so far as the lawfulness of Decision 2011/783, Implementing Regulation No 1245/2011 and Regulation No 267/2012 is concerned. While the applicant denies having provided financial services to Sanam Industrial Group after the adoption of the restrictive measures against the latter, the Council offers no evidence to establish the contrary or to prove that the applicant was aware of the involvement of Sanam Industrial Group in nuclear proliferation even before the adoption of the restrictive measures against that party.
111
As regards, lastly, the third reason, the applicant does not dispute that DIO and IEI are engaged in nuclear proliferation. Equally, it does not deny that it handled letters of credit of those two entities.
112
None the less, the applicant does not accept that the services which it provided to DIO and IEI justify the adoption of restrictive measures against it. In that regard, the applicant maintains, in essence, that those services were ordinary banking services provided in the past in the context of handling export letters of credit, issued by third-party banks, and that those services did not relate to transactions linked to nuclear proliferation.
113
In order to determine whether those arguments are well founded, the Court asked the Council to send to it detailed information on the letters of credit handled by the applicant on behalf of DIO and IEI.
114
The Council has not produced any evidence in reply to the Court’s request. The Council maintains, in that regard, that the applicant has also failed to produce such evidence, although it could and should have done so.
115
That argument cannot be accepted. As is clear from the case-law cited in paragraph 105 above, it is not for the entity which is the subject of the restrictive measures, but for the Council, to produce, in the event of challenge, the evidence and information on which the Council relied when adopting those measures. In this case, since the Council relied on specific letters of credit which it claims were handled by the applicant on behalf of DIO and IEI, it is therefore for the Council to provide to the Court the related details.
116
In those circumstances, the fact that it is impossible to determine whether the applicant’s arguments, that the services which it provided to DIO and IEI do not justify the adoption of restrictive measures against it, are well founded should not prejudice the applicant. On the contrary, since the reason why it is impossible is the Council’s failure to meet its obligation to submit relevant evidence and information, the second plea in law must be upheld.
117
In the light of all the foregoing, the contested measures must be annulled in so far as they concern the applicant, and there is no need to examine the third plea in law, claiming an infringement of the principle of proportionality.
The temporal effects of annulment of the contested measures
118
As regards the temporal effects of the annulment of the contested measures, it must be noted, first, that Implementing Regulation No 668/2010, which amended the list in Annex V to Regulation No 423/2007, ceased to have legal effect after the repeal of Regulation No 423/2007 by Regulation No 961/2010. Likewise, Regulation No 961/2010, as amended by Implementing Regulation No 1245/2011, was itself repealed by Regulation No 267/2012. Consequently, the annulment of Implementing Regulation No 668/2010, Regulation No 961/2010 and Implementing Regulation No 1245/2011 concerns only the effects which those measures produced between the date of their entry into force and the date of their repeal.
119
Next, as regards Regulation No 267/2012, it must be recalled that, under the second paragraph of Article 60 of the Statute of the Court of Justice of the European Union, by way of derogation from Article 280 TFEU, decisions of the General Court declaring a regulation to be void are to take effect only as from the date of expiry of the period for bringing an appeal referred to in the first paragraph of Article 56 of that Statute or, if an appeal has been brought within that period, as from the date of dismissal of the appeal (see, by analogy, judgment of 16 September 2011 in Case T-316/11 Kadio Morokro v Council, not published in the ECR, paragraph 38).
120
In that regard, referring to the order in C-110/12 P(R) Akhras v Council, paragraph 23 above, the applicant maintains that Regulation No 267/2012 amounts, as far as it is concerned, to a decision in the form of a regulation, rather than to a true regulation. Consequently, the second paragraph of Article 60 of the Statute is not applicable to this case.
121
That argument cannot be accepted.
122
First, in paragraph 29 of the order in Akhras v Council, paragraph 23 above, the President of the Court of Justice did not closely examine the applicability of the second paragraph of Article 60 of the Statute to the regulations imposing restrictive measures, since he did no more than state that, while the arguments submitted on that point by the applicant in Case C-110/12 P(R) did not appear to be ‘unfounded’, they were none the less ineffective.
123
Secondly, having regard to the case-law of the Court of Justice, it must be held that Regulation No 267/2012, including its Annex IX, has the nature of a regulation, since the second paragraph of Article 51 thereof provides that it is to be binding in its entirety and directly applicable in all Member States, which corresponds to the effects of a regulation as provided for in Article 288 TFEU (see, by analogy, the judgment of 16 November 2011 in Case C-548/09 P Bank Melli Iran v Council [2011] ECR I-11381, paragraph 45).
124
The second paragraph of Article 60 of the Statute of the Court of Justice is therefore applicable in this case.
125
That being the case, the Council has a period of two months, extended on account of distance by 10 days, as from the notification of this judgment, to remedy the infringements established by adopting, if appropriate, new restrictive measures with respect to the applicant. In the present case, the risk of serious and irreparable harm to the effectiveness of the restrictive measures imposed by Regulation No 267/2012 does not appear sufficiently great, having regard to the considerable impact of those measures on the applicant’s rights and freedoms, to warrant the maintenance of the effects of that regulation with respect to the applicant for a period exceeding that laid down in the second paragraph of Article 60 of the Statute of the Court of Justice (see, by analogy, Kadio Morokro v Council, paragraph 119 above, paragraph 38).
126
Lastly, as regards the temporal effects of the annulment of Decision 2010/413, as amended by Decision 2010/644 and Decision 2011/783, it must be recalled that, under the second paragraph of Article 264 TFEU, the General Court may, if it considers it necessary, state which of the effects of the act which it has declared void are to be considered as definitive. In the present case, if the dates when the annulment of Regulation No 267/2012 and that of Decision 2010/413, as amended by Decision 2010/644 and Decision 2011/783, take effect were to differ, that would be likely seriously to jeopardise legal certainty, since those two acts impose on the applicant measures which are identical. The effects of Decision 2010/413, as amended by Decision 2010/644 and Decision 2011/783, must therefore be maintained as regards the applicant until the annulment of Regulation No 267/2012 takes effect (see, by analogy, Kadio Morokro v Council, paragraph 39).
Costs
127
Under Article 87(2) 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 Council has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.
128
Under the first subparagraph of Article 87(4) of the Rules of Procedure, institutions which have intervened in the proceedings are to bear their own costs. Consequently, the Commission is to bear its own costs.
On those grounds,
THE GENERAL COURT (Fourth Chamber)
hereby:
1.
Annuls the following measures in so far as they concern Bank Saderat Iran:
—
point 7 of Table B of Annex II to Council Decision 2010/413/CFSP of 26 July 2010 concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP;
—
point 5 of Table B of the Annex to Council Implementing Regulation (EU) No 668/2010 of 26 July 2010 implementing Article 7(2) of Regulation (EC) No 423/2007 concerning restrictive measures against Iran;
—
point 7 of Table I.B of the Annex to Council Decision 2010/644/CFSP of 25 October 2010 amending Decision 2010/413;
—
point 7 of Table B of Annex VIII to Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran and repealing Regulation (EC) No 423/2007;
—
Council Decision 2011/783/CFSP of 1 December 2011 amending Decision 2010/413;
—
Council Implementing Regulation (EU) No 1245/2011 of 1 December 2011 implementing Regulation No 961/2010;
—
point 7 of Table I.B of Annex IX to Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation No 961/2010.
2.
Orders the effects of Decision 2010/413, as amended by Decision 2010/644 and Decision 2011/783, to be maintained as regards Bank Saderat Iran until the annulment of Regulation No 267/2012 takes effect.
3.
Dismisses the action as to the remainder.
4.
Orders the Council of the European Union to bear its own costs and to pay the costs of Bank Saderat Iran.
5.
Orders the European Commission to bear its own costs.
Pelikánová
Jürimäe
Van der Woude
Delivered in open court in Luxembourg on 5 February 2013.
[Signatures]
(
*1
)	Language of the case: English.