Case C‑348/12 P

Council of the European Union

v

Manufacturing Support & Procurement Kala Naft Co., Tehran

‛Appeal — Restrictive measures against the Islamic Republic of Iran with the aim of preventing nuclear proliferation — Measures directed against the Iranian oil and gas industry — Freezing of funds — Obligation to state reasons — Obligation to substantiate the measure’

Summary — Judgment of the Court (Fifth Chamber), 28 November 2013

Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Restriction of the right to property and of the freedom to pursue an economic activity — Lawfulness — Breach of principle of proportionality — None

Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Conditions for adoption where legislation is worded in general terms — Requirement of prior conduct — None — Sufficiency of a reference to a general objective evident from the statutes of the entity concerned

Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Support for Iran’s proliferation-sensitive nuclear activities — Meaning — Trade in key equipment and technology for the gas and oil industry — Included — No actual reprehensible conduct — No effect

Actions for annulment — Conditions for admissibility — Interest in bringing proceedings — Natural or legal persons — Measures of direct and individual concern to them — Action directed against an act imposing restrictive measures on the applicant — Government organisation pleading the protection and safeguards connected with fundamental rights — Issue concerning not the admissibility of the plea but its merits

See the text of the decision. (see paras 50, 51)

See the text of the decision. (see para. 52)

The Courts of the European Union must, in accordance with the powers conferred on them by the Treaties, ensure the review, in principle the full review, of the lawfulness of all Union acts in the light of the fundamental rights forming an integral part of the EU legal order. Those fundamental rights include, inter alia, respect for the rights of the defence and the right to effective judicial protection. The first of those rights, which is affirmed in Article 41(2) of the Charter of Fundamental Rights of the European Union, includes the right to be heard and the right to have access to the file, subject to legitimate interests in maintaining confidentiality. The second of those fundamental rights, which is affirmed in Article 47 of the Charter, requires that the person concerned must be able to ascertain the reasons upon which the decision taken in relation to him is based, either by reading the decision itself or by requesting and obtaining disclosure of those reasons, without prejudice to the power of the court having jurisdiction to require the authority concerned to disclose that information, so as to make it possible for him to defend his rights in the best possible conditions and to decide, with full knowledge of the relevant facts, whether there is any point in his applying to the court having jurisdiction, and in order to put the latter fully in a position to review the lawfulness of the decision in question. Article 52(1) of the Charter nevertheless allows limitations on the exercise of the rights enshrined in the Charter, subject to the conditions that the limitation concerned respects the essence of the fundamental right in question and, subject to the principle of proportionality, that it is necessary and genuinely meets objectives of general interest recognised by the European Union. Further, the question whether there is an infringement of the rights of the defence and of the right to effective judicial protection must be examined in relation to the specific circumstances of each particular case, including the nature of the act at issue, the context of its adoption and the legal rules governing the matter in question. In particular, the reasons given for a measure adversely affecting a person are sufficient if it was adopted in circumstances known to that person which enable him to understand the scope of the measure concerning him. With regard to the review of the lawfulness of a decision adopting restrictive measures, having regard to their preventive nature, if the Courts of the European Union consider that, at the very least, one of the reasons mentioned is sufficiently detailed and specific, that it is substantiated and that it constitutes in itself sufficient basis to support that decision, the fact that the same cannot be said of other such reasons cannot justify the annulment of that decision. Furthermore, the effectiveness of the judicial review guaranteed by Article 47 of the Charter also requires that the Courts of the European Union ensure that the decision, which affects the person or entity concerned individually, is taken on a sufficiently solid factual basis. That entails a verification of the allegations factored 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. (see paras 65-73)

It is apparent from Article 8(1) and (2) of Regulation No 961/2010 on restrictive measures against Iran and repealing Regulation No 423/2007 that the concept of procurement of prohibited goods and technology, within the meaning of Article 16(2) of that regulation, extends to the procurement of key equipment and technology for key sectors of the oil and gas industry in Iran. Implementing Regulation No 668/2010 implementing Article 7(2) of Regulation No 423/2007 concerning restrictive measures against Iran implements Article 7(2) of Regulation No 423/2007 concerning restrictive measures against Iran, which, unlike Article 16(2) of Regulation No 961/2010, does not explicitly refer to the procurement of prohibited goods and technology. However, Article 7(2)(a) of Regulation No 423/2007 covers engagement in, direct association with, or the provision of support for, Iran’s proliferation-sensitive nuclear activities. Support implies a lesser degree of connection to Iran’s nuclear activities than engagement or direct association, and is capable of covering the procurement of or trade in goods and technology linked to the gas and oil industry. In the light of Security Council Resolution 1929 (2010), the European Council Declaration of 17 June 2010 and Decision 2010/413 concerning restrictive measures against Iran and repealing Common Position 2007/140, which mention the revenues derived from the energy sector and the risk attached to material intended for the oil and gas industry, Article 7(2) of Regulation No 423/2007 must be interpreted, for the purposes of the assessment of the lawfulness of the restrictive measure adopted by Implementing Regulation No 668/2010, as meaning that trading in key equipment and technology for the gas and oil industry is capable of being regarded as support for the nuclear activities of the Islamic Republic of Iran. It cannot, therefore, be accepted that the adoption of restrictive measures against an entity presupposes that that entity has actually previously acted reprehensibly, the mere risk that the entity concerned may do so in the future being insufficient. (see paras 77, 79, 80, 83-84)

Where the provisions of acts providing for funds to be frozen are worded in general terms and make no reference to conduct prior to a decision to freeze funds, the reference to a general objective as disclosed by the statutes of an entity may be sufficient to justify the adoption of restrictive measures. (see para. 85)

Decision 2010/413 concerning restrictive measures against Iran and repealing Common Position 2007/140, and Decision 2010/644 amending Decision 2010/413 are founded on Article 29 TEU; Implementing Regulation No 668/2010 implementing Article 7(2) of Regulation No 423/2007 concerning restrictive measures against Iran is founded on Article 291(2) TFEU and Regulation No 423/2007 concerning restrictive measures against Iran; and Regulation No 961/2010 on restrictive measures against Iran and repealing Regulation No 423/2007 is founded on Article 215 TFEU. Those provisions of the Treaties give the Council the power to adopt acts containing independent restrictive measures freezing funds, distinct from the measures specifically recommended by the United Nations Security Council. Although they must be taken into consideration in the interpretation of those acts, neither Security Council Resolution 1929 (2010) nor the European Council Declaration of 17 June 2010 can constitute the legal basis of those acts. (see paras 108, 109)