Case C‑176/13 P

Council of the European Union

v

Bank Mellat

‛Appeal — Common foreign and security policy — Combating nuclear proliferation — Restrictive measures taken against the Islamic Republic of Iran — Freezing of funds of an Iranian bank — Obligation to state reasons — Procedure for the adoption of the act — Manifest error of assessment’

Summary — Judgment of the Court (Fifth Chamber), 18 February 2016

Common foreign and security policy — Restrictive measures against Iran — Freezing of funds — Adoption procedure — Duties of the Council — Review of the material submitted by the Member States or the High Representative to justify the listing — None

Acts of the institutions — Statement of reasons — Obligation — Scope — Assessment of the duty to state reasons by reference to the circumstances of the case — Need to specify all the relevant facts and points of law — None

Actions for annulment — Admissibility criteria — Interest in bringing proceedings — Natural or legal persons — Measures of direct and individual concern to them — Action against an act imposing restrictive measures on the applicant — Governmental organisation invoking the protections and guarantees linked to fundamental rights — Question concerning not the admissibility but the merits of a plea

Judicial proceedings — Time-limits for instituting proceedings — Extension of time-limit on account of distance — Single fixed period — Use by one party of electronic means to communicate with the Courts of the European Union — No effect

See the text of the decision. (see paras 39, 40)

In the context of an action based on the second paragraph of Article 275 TFEU, any natural person or any entity may put forward pleas alleging an infringement of their rights of defence or of their right to effective judicial protection, as well as pleas alleging an infringement of essential procedural requirements, such as that alleging an infringement of the obligation to state the reasons for a measure. By contrast, as regards pleas alleging a manifest error of assessment or a breach of the general principle of proportionality, the question whether a State entity is entitled to invoke them is one that relates to the merits of the case. (see paras 48-51)

See the text of the decision. (see paras 74, 75)

As regards an act imposing restrictive measures, without going so far as to require a detailed response to the comments made by the person concerned, the obligation to state reasons laid down in Article 296 TFEU entails in all circumstances, not least when the reasons stated for the EU measure represent reasons stated by an international body, that that statement of reasons identifies the individual, specific and concrete reasons why the competent authorities consider that the person concerned must be subject to restrictive measures. The Courts of the European Union must, therefore, in particular determine whether the reasons relied on are sufficiently detailed and specific. As regards an act imposing fund-freezing measures on an Iranian bank under Regulations No 423/2007 and No 668/2010 concerning restrictive measures against Iran, it was not for that bank, in the context of the procedure for the adoption of fund-freezing measures, to compare, for the purposes of its defence, its own lists of customers against the names of entities included on the United Nations and EU lists, or to check whether one of its customers was an employee of the Aerospace Industries Organisation. That would be contrary to the requirement that the statement of reasons identify the individual, specific and concrete reasons why the competent authorities consider that the person concerned must be subject to restrictive measures. (see paras 76, 80, 81)

In relation to the common foreign and security policy, since none of the grounds for annulment referred to in Article 263 TFEU has been established before the General Court of the European Union, that court makes an error of law when it rules that, when adopting an initial act establishing restrictive measures against entities allegedly involved in nuclear proliferation, the Council must assess the relevance and the validity of the information and evidence submitted to it by a Member State or by the High Representative of the Union for Foreign Affairs and Security Policy. (see para. 91)

The effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires, in particular, that the Courts of the European Union ensure that the decision, which affects that person or entity concerned individually, is taken on a sufficiently solid factual basis. That entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, is substantiated. To that end, it is for the Courts of the European Union, in order to carry out that examination, to request the competent EU authority, when necessary, to produce information or evidence, confidential or not, relevant to such an examination. If the competent EU authority finds itself unable to comply with the request by the Courts of the European Union, it is then the duty of those Courts to base their decision solely on the material which has been disclosed to them. Consequently, where the competent authority does not produce any evidence to enable the General Court of the European Union to determine whether a reason was well founded, it is impossible for that court — which is called upon to review whether the grounds for listing are well founded in fact, taking into consideration any observations and exculpatory evidence produced by the person concerned and the response of the competent EU authority to those observations — to find that those reasons are well founded, and consequently those reasons cannot be relied on as the basis for the contested listing decision. A mere reference to the person or entity concerned in a resolution of the United Nations Security Council cannot constitute sufficient justification for that person’s or entity’s designation by the European Union. (see paras 109-112, 114)