Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE GENERAL COURT (Second Chamber)

15 September 2015 (*)

(Common foreign and security policy — Restrictive measures adopted against Iran with the aim of preventing nuclear proliferation — Freezing of funds — Error of assessment)

In Case T‑158/13,

Iranian Aluminium Co. (Iralco), established in Tehran (Iran), represented by S. Millar and S. Ashley, Solicitors, M. Lester and M. Happold, Barristers,

applicant,

v

Council of the European Union, represented by M. Bishop and I. Rodios, acting as Agents,

defendant,

APPLICATION for annulment of (i) Council Decision 2012/829/CFSP of 21 December 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2012 L 356, p. 71), in so far as it listed the applicant 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) and (ii) Council Implementing Regulation (EU) No 1264/2012 of 21 December 2012 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran (OJ 2012 L 356, p. 55), in so far as it listed the applicant in Annex IX to Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2010 (OJ 2012 L 88, p. 1),

THE GENERAL COURT (Second Chamber),

composed of M.E. Martins Ribeiro, President, S. Gervasoni and L. Madise (Rapporteur), Judges,

Registrar: L. Grzegorczyk, Administrator,

having regard to the written procedure and further to the hearing on 10 February 2015,

gives the following

Judgment

 Background to the dispute

1        The present case has been brought against the background of 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.

2        The applicant, Iranian Aluminium Co. (Iralco), is a private company, quoted on the Tehran Stock Exchange (Iran). It employs approximately 4 000 Iranian nationals. Iralco manufactures aluminium products, including ingots, billets and casting alloys used in vehicles, home appliances, packaging and cables, and sells them through the Iran Products Exchange.

3        On 26 July 2010, the Council of the European Union adopted Decision 2010/413/CFSP concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP (OJ 2010 L 195, p. 39).

4        Decision 2010/413 confers on the Council:

–        in Article 20(1)(a), the power to freeze the assets of persons and entities designated by the United Nations Security Council;

–        in Article 20(1)(b), the power to freeze the assets of persons and entities ‘that are engaged in, directly associated with, or providing support for, Iran’s proliferation-sensitive nuclear activities or for the development of nuclear weapon delivery systems, including through the involvement in procurement of the prohibited items, goods, equipment, materials and technology, ... or ... entities that have evaded or violated, or assisted designated persons or entities in evading or violating, the provisions of UNSCR 1737 (2006), UNSCR 1747 (2007), UNSCR 1803 (2008) and UNSCR 1929 (2010) or [the provisions of the decision itself] as well as other members and entities of IRGC [the Iranian Revolutionary Guards Corps] and IRISL [the Islamic Republic of Iran Shipping Lines] and entities owned or controlled by them or ... acting on their behalf or ... providing insurance or other essential services ..., as listed in Annex II’;

–        in Article 20(1)(c), the power to freeze the assets of persons and entities that ‘provide support to the Government of Iran and entities owned or controlled by them or persons and entities associated with them ...’.

5        Annex II to Decision 2010/413 lists the persons and entities whose funds and economic resources have been frozen in accordance with Article 20(1) of that decision.

6        On 25 October 2010 the Council gave effect to Decision 2010/413 by adopting Regulation (EU) No 961/2010 on restrictive measures against Iran and repealing Regulation (EC) No 423/2007 (OJ 2010 L 281, p. 1).

7        On 23 March 2012, in order to introduce additional restrictive measures, the Council adopted Regulation (EU) No 267/2012 on restrictive measures against Iran and repealing Regulation No 961/2010 (OJ 2012 L 88, p. 1). Article 23 of Regulation No 267/2012 implements the asset-freezing regime. Annex IX to Regulation No 267/2012 lists the persons and entities whose funds and economic resources are frozen in accordance with Article 23(2) of that regulation.

Article 23(2) of Regulation No 267/2012 reads as follows:

‘All funds and economic resources belonging to, owned, held or controlled by the persons, entities and bodies listed in Annex IX shall be frozen. Annex IX shall include the natural and legal persons, entities and bodies who, in accordance with Article 20(1)(b) and (c) of Decision 2010/413 ..., have been identified as:

(a)       being engaged in, directly associated with, or providing support for Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems by Iran, including through involvement in the procurement of prohibited goods and technology, or being owned or controlled by such a person, entity or body, including through illicit means, or acting on their behalf or at their direction;

(b)       being a natural or legal person, entity or body that has assisted a listed person, entity or body to evade or violate the provisions of this Regulation, Council Decision 2010/413 ... or UNSCR 1737 (2006), UNSCR 1747 (2007), UNSCR 1803 (2008) and UNSCR 1929 (2010);

…

(d)       being other persons, entities or bodies that provide support, such as material, logistical or financial support, to the Government of Iran and entities owned or controlled by them, or persons and entities associated with them;

…’

8        On 21 December 2012 the Council adopted, first, Decision 2012/829/CFSP amending Decision 2010/413 (OJ 2012 L 356, p. 71) and, secondly, Implementing Regulation (EU) No 1264/2012 implementing Regulation No 267/2012 (OJ 2012 L 356, p. 55).

9        By those two acts, the applicant’s name was added to Annex II to Decision 2010/413 and to Annex IX to Regulation No 267/2012, respectively.

10      In Decision 2012/829 and in Implementing Regulation No 1264/2012 (together ‘the contested acts’), the Council, on the basis of, inter alia, Regulation No 267/2012 and Decision 2010/413, justifies the freezing of the applicant’s funds and economic resources by means of the following reasons:

‘The Iran Aluminium Company (aka Iralco, Iranian Aluminium Company) is assisting designated entities to violate the provisions of UN and EU sanctions on Iran and is directly supporting Iran’s proliferation sensitive nuclear activities. As of mid-2012 Iralco had a contract to supply aluminium to EU-designated Iran Centrifuge Technology Company (TESA).’

11      The Council published a notice, for the attention of the persons and entities to which the restrictive measures adopted in the contested acts applied, in the Official Journal of the European Union of 22 December 2012 (OJ 2012 C 398, p. 8).

12      By letter of 3 January 2013, the Council informed the applicant of the adoption of the restrictive measures against it and sent to it a copy of the contested acts.

13      By letter of 12 February 2013, the applicant contested the restrictive measures taken against it, denying its involvement in the alleged activities and stating that the reasons given for designation were vague. In that letter, the applicant also asked the Council to reconsider the contested acts and, if that were not possible, to send the applicant copies of all the relevant documents justifying its designation. The Council did not answer that letter.

14      By letter of 13 March 2013, the applicant again wrote to the Council, asking to be provided with the information and evidence which had led the Council to determine that it met the criteria for designation in the contested acts.

15      By letter of 10 June 2013 the Council answered the applicant’s letter of 13 March 2013. It stated that the applicant might have access to the following documents, enclosed with the letter:

–        ‘extract from a proposal by a Member State for the applicant’s designation (document 9869/13 EXT 2, point 3);

–        extracts from the reports of the meetings of the “COMEM” (Middle East/Gulf) Working Party on 29 November and 3 December 2012 (document 10246/13);

–        meeting document MD ... 229/12 ADD 1 REV 1 RELEX;

–        notes of 18 December 2012 from the Secretariat to Coreper and to Coreper/Council (documents 17795/12 and 17523/12 ADD 1 REV 1)’.

16      The Council also stated in that letter that the deleted parts in the reports of the meetings of the COMEM working group were confidential elements of the discussion within the Council and could not be disclosed.

 Procedure and forms of order sought by the parties

17      By application lodged at the Court Registry on 15 March 2013, the applicant brought the present action.

18      The composition of the chambers of the Court having been altered, the Judge-Rapporteur was assigned to the Second Chamber, to which this case was, consequently, assigned.

19      The applicant claims that the Court should:

–        annul Decision 2012/829 in so far as it listed the applicant in Annex II to Decision 2010/413;

–        annul Implementing Regulation No 1264/2012 in so far as it listed the applicant in Annex IX to Regulation No 267/2012;

–        order the Council to pay the costs.

20      The Council contends that the Court should:

–        dismiss the action as inadmissible or, in the alternative, as being unfounded, and;

–        order the applicant to pay the costs.

 Admissibility

21      Without formally raising a plea of inadmissibility by separate document under Article 114 of the Rules of Procedure of the General Court of 2 May 1991, the Council contests the admissibility of this action.

22      The Council refers to the judgment of 23 April 2013 in Gbagbo v Council (C‑478/11 P to C‑482/11 P, ECR, EU:C:2013:258) according to which notification to a person subject to a restrictive measure may be effected by publication of a notice in the Official Journal. When such a notice is issued, the two-month period laid down in the sixth paragraph of Article 263 TFEU starts to run from the date of its publication.

23      The Council points out that Article 102(1) of the Rules of Procedure of 2 May 1991, which states that the period allowed for commencing proceedings is to be calculated from the end of the 14th day after publication of the measure, does not apply to measures of individual application, such as the contested acts.

24      Consequently, the two-month period allowed for commencing proceedings laid down in the sixth paragraph of Article 263 TFEU, extended on account of distance by a single period of 10 days as provided in Article 102(2) of the Rules of Procedure of 2 May 1991, expired on 4 March 2013. This action, brought on 15 March 2013, is therefore, the Council contends, inadmissible.

25      The applicant contests the Council’s interpretation of the judgment in Gbagbo and Others v Council, cited in paragraph 22 above (EU:C:2013:258), and considers that that judgment is irrelevant to the reply to be given to the question raised in the present case. The applicant maintains that whereas in Gbagbo the address of the persons concerned was not known, it is known in this case, so the Council was required, under Article 46(3) of Regulation No 267/2012 and Article 24 of Decision 2010/413, to communicate the designation measures directly to the applicant. The applicant adds that the Court has recently confirmed, furthermore, that the period for challenging restrictive measures such as the contested measures starts to run from the date of individual notification of those measures.

26      In the alternative, the applicant states that, if individual notification by letter could not be taken into account, so that the period for commencing proceedings would start running from the date of publication of the notice as deemed notification, the applicant should be afforded the additional 14 days prescribed by Article 102(1) of the Rules of Procedure of 2 May 1991.

27      It must be borne in mind that, according to the case-law, the principle of effective judicial protection means that the European Union authority which adopts or maintains restrictive measures against a person or entity, as in the present case, is bound to communicate the grounds on which those measures are based, either when those measures are adopted or, at the very least, as swiftly as possible after they have been adopted, in order to enable those persons or entities to exercise their right to bring an action (see judgment of 5 November 2014 in Mayaleh v Council, T‑307/12 and T‑408/13, ECR, EU:T:2014:926, paragraph 54 and the case-law cited).

28      In the present case, as the applicant maintains, under Article 24(3) of Decision 2010/413 and Article 46(3) of Regulation No 267/2012, the Council is to communicate its decision, including the grounds for listing, to the person or entity referred to, either directly, if the address is known, or through the publication of a notice, providing such person or entity with an opportunity to present observations.

29      It follows that the time-limit for bringing an action for annulment of an act imposing restrictive measures on a person or entity starts to run only from the date on which that act is notified to the interested party and not from the date of publication of that act, having regard to the fact that that act, as regards the persons on whom those measures are imposed, forms part of a bundle of individual decisions (see, to that effect, judgment in Mayaleh v Conseil, cited in paragraph 27 above, EU:T:2014:926, paragraph 56; see also, to that effect and by analogy, judgment in Gbagbo and Others v Council, cited in paragraph 22 above, EU:C:2013:258, paragraphs 56 to 58).

30      In that respect, according to the case-law, Article 24(3) of Decision 2010/413 and Article 46(3) of Regulation No 267/2012 must be interpreted as meaning that when the Council has the address of a person subject to restrictive measures, where the acts incorporating those measures are not communicated directly, the period with which that person must comply in order to challenge those acts before the Court does not begin to run. Thus, it is only where it is impossible to communicate individually to the person concerned the act by which restrictive measures against him are adopted or maintained that the publication of a notice in the Official Journal of the European Union causes that period to begin to run (see judgment in Mayaleh v Council, cited in paragraph 27 above, EU:T:2014:926, paragraph 60 and the case-law cited; see also, to that effect and by analogy, judgments in Gbagbo and Others v Council, cited in paragraph 22 above, EU:C:2013:258, paragraphs 61 and 62, and of 3 July 2014 in Sharif University of Technology v Council, T‑181/13, EU:T:2014:607, paragraph 31).

31      It should be observed that the Council may be considered to be unable to communicate individually to a natural or legal person or to an entity an act incorporating restrictive measures relating to that person or entity either when the latter’s address is not published and has not been supplied to the Council or when the communication sent to the address which the Council has fails, in spite of the steps which it has taken, with all necessary diligence, in order to effect such communication (judgment in Mayaleh v Council, cited in paragraph 27 above, EU:T:2014:926, paragraph 61).

32      In the present case, it is apparent from the contested acts that the applicant’s address was known to the Council when the contested acts were adopted. The Council therefore had no other choice than to inform the applicant directly, by means of an individual communication, of the measures imposed on it (see, to that effect, judgment in Sharif University of Technology v Council, cited in paragraph 30 above, EU:T:2014:607, paragraph 32).

33      In those circumstances, the publication in the Official Journal of the notice of 22 December 2012 cannot be regarded as being the event which started the period with which the applicant must comply in order to challenge that act before the Court.

34      The applicant states that it was on 3 February 2013 that it received the Council’s letter of 3 January 2013 informing it of the inclusion of its name, by means of the adoption of the contested acts, in the list of persons who were subject to the measures for the freezing of assets laid down in the contested acts, which the Council has not disputed.

35      In those circumstances, the period of two months for the bringing of proceedings began to run when the Council’s letter was received on 3 February 2013 and expired on 15 April 2013.

36      Since the present action was brought on 15 March 2013, it is clear that it was brought prior to the expiry of the legal time-limit.

37      The action must therefore be declared to be admissible.

 Substance

38      In support of the action, the applicant relies on four pleas in law: the first alleges failure to state reasons; the second an error of assessment; the third infringement of the rights of the defence and, in particular, of the right to access to the file and the fourth alleges an unjustified restriction of fundamental rights, including the right to protection of the applicant’s property and reputation.

39      The second plea in law, alleging an error of assessment, must be examined first.

40      The applicant maintains that that the Council committed an error of assessment in basing the contested acts on unverified supposition and presumption rather than on evidence. The applicant states in that regard that it has never assisted any designated entity to infringe any EU sanctions on Iran, never supported Iran’s nuclear activities, and never had any contract to supply aluminium to TESA. The applicant also states, at the stage of the reply, that the Council cannot remedy the lack of evidence by the explanation given in paragraph 23 of the defence, for that explanation is new and, in any event, insufficient. The applicant adds that the Council cannot require it to adduce evidence that it does not have a contract with TESA and maintains in that regard that the burden of proof lies with the Council.

41      The Council states that the statement of reasons provided in the contested acts concerning the applicant is correct and that, although the applicant denies ever having concluded a contract to supply aluminium to TESA, it has adduced no evidence in support of that contention. The Council adds, at the stage of the rejoinder, that the fact that it selected a designation criterion other than that suggested by the proposing Member State means that an assessment was indeed carried out before the applicant was designated. The Council maintains, finally, that paragraph 23 of the defence does not constitute a new reason for designation, but merely provides an explanation of the way in which the applicant assists designated entities to infringe UN provisions and EU sanctions on Iran.

42      It must be borne in mind that the effectiveness of the judicial review guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union requires that, as part of the review of the lawfulness of the grounds which are the basis of the decision to list or to maintain the listing of a given person, the Courts of the European Union are to ensure that that decision 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 (judgment of 18 July 2013 in Commission and Others v Kadi, C-584/10 P, C-593/10 P and C-595/10 P, ECR, ‘Kadi II’, EU:C:2013:518, paragraph 119).

43      It is the task of the competent European Union authority to establish, in the event of challenge, that the reasons relied on against the person concerned are well founded, and not the task of that person to adduce evidence of the negative, that those reasons are not well founded. It is necessary that the information or evidence produced should support the reasons relied on against the person concerned. If that material is insufficient to allow a finding that a reason is well founded, the Courts of the European Union shall disregard that reason as a possible basis for the contested decision to list or maintain a listing (judgment in Kadi II, cited in paragraph 42 above, EU:C:2013:518, paragraphs 121 to 123).

44      In the present case, it must be observed that, whereas the applicant had requested the Council, by letter of 12 February 2013, then, in the absence of a reply from the Council, by letter of 13 March 2013, to provide the documents justifying the inclusion of its name on the lists in question, the Council only provided those documents on 10 June 2013, namely two months after the expiry of the period for bringing an action and almost four months after the initial request. Furthermore, the Council maintains, in essence, that it provided the proposals concerning the applicant as soon as it received the consent of the Member States which presented them.

45      Without it being necessary to rule on the admissibility of the documents referred to in paragraph 15 above, it suffices, in any event, to note that the documents provided by the Council to the applicant, upon the latter’s request, in its letter of 10 June 2013, contain no information or additional elements to corroborate or even to substantiate the content of the contested acts. The meeting document MD 229/12 ADD 1 REV 1 RELEX and the notes of the Council Secretariat General to Coreper and to Coreper and the Council (documents 17795/12 and 17523/12 ADD 1 REV 1) do not mention anything other than what is produced in the reasons stated in the contested acts. The extracts from the meeting reports of the ‘COMEM’ Working Party (document 10246/13) do not contain any information specific to the applicant, while the extract from the proposal by a Member State concerning the listing of Iralco (document 9869/13 EXT 2, point 3) was made confidential so that no specific information concerning the applicant appears. Moreover, the Council does not state that those documents contain additional information to substantiate the contested acts.

46      In those circumstances, in so far as the statement of reasons for the listing of the applicant consists of the assertions contested by the applicant and where the Council has not adduced any evidence for them, it must be held that that listing is based on unsubstantiated assertions.

47      That conclusion cannot be invalidated by the arguments put forward by the Council in paragraph 23 of the defence, to the effect that ‘[t]he Iranian nuclear programme requires special metals including aluminium, with specifications which are difficult for Iran to procure from other countries due to the international sanctions imposed against it’ and ‘[t]herefore local Iranian metal companies such as the applicant are in high demand for special metals for use in Iran’s military, ballistic missile and nuclear programmes’.

48      The mere fact that Iranian metal companies are ‘in high demand for special metals’ does not necessarily mean, given that there is no prima facie evidence at all in that regard, that the applicant is actually supplying those metals, or that it is likely to supply them in practice, particularly as it is not disputed that the applicant’s business is, in principle, of an entirely civil nature.

49      In that respect, the Council adduces no tangible evidence to show that the applicant is capable of producing aluminium ‘with specifications’ and that it produces this in practice.

50      Accordingly, the arguments set out by the Council in paragraph 23 of the defence do not give any information concerning the contract referred to, which, according to the Council, was signed with TESA in mid-2012, while this is the only reason in the contested decision, on account of its being individual, specific and concrete, which would be capable of justifying the sanctions concerned (see, by analogy, judgment in Kadi II, cited in paragraph 42 above, EU:C:2013:518, paragraph 116).

51      In those circumstances, those arguments are not sufficient to justify a restrictive measure such as that at issue.

52      It follows that the Council has not discharged the burden of proof which rested on it under Article 47 of the Charter of Fundamental Rights, as interpreted by the Court of Justice in its judgment in Kadi II, cited in paragraph 42 above (EU:C:2013:518, paragraph 121).

53      Accordingly, the applicant’s listing must be held to be vitiated by an error of assessment.

54      In the light of all the foregoing, the contested acts must be annulled, in so far as they concern the applicant, and there is no need to examine the other pleas in law raised in support of the action.

  The temporal effects of the annulment of the contested acts

55      As regards Implementing Regulation No 1264/2012, it must be remembered 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 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 judgment of 6 September 2013 in Persia International Bank v Council, T-493/10, ECR (Extracts), EU:T:2013:398, paragraph 122 and the case-law cited).

56      The second paragraph of Article 60 of the Statute of the Court of Justice is therefore applicable in this case (judgment of 6 September 2013 in Persia International Bank v Council, cited in paragraph 55 above, EU:T:2013:398, paragraph 127).

57      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 Implementing Regulation No 1264/2012 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 in relation 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 judgment in Persia International Bank v Council, cited in paragraph 55 above, EU:T:2013:398, paragraph 128 and the case-law cited).

58      Finally, as regards the temporal effects of the annulment of Decision 2012/829, it must be recalled that, under the second paragraph of Article 264 TFEU, the 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 date when the annulment of Implementing Regulation No 1264/2012 takes effect were to differ from the date up to which the effects of the abovementioned decision are regarded as definitive, that would be likely seriously to jeopardise legal certainty, since the contested acts impose identical restrictive measures on the applicant. The effects of that decision must therefore be maintained as regards the applicant until the annulment of Implementing Regulation No 1264/2012 takes effect (see, to that effect, judgment in Persia International Bank v Council, cited in paragraph 55 above, EU:T:2013:398, paragraph 129 and the case-law cited).

 Costs

59      Under Article 134(1) of the Court’s Rules of Procedure, 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 of the present proceedings, in accordance with the form of order sought by the applicant.

On those grounds,

THE GENERAL COURT (Second Chamber)

hereby:

1)      Annuls Council Decision 2012/829/CFSP of 21 December 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran, in so far as it listed Iranian Aluminium Co. (Iralco) in Annex II to Decision 2010/413/CFSP of 26 July 2010 concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP;

2)      Annuls Council Implementing Regulation (EU) No 1264/2012 of 21 December 2012 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran, in so far as it listed Iralco in Annex IX to Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2010;

3)      Orders the effects of Decision 2012/829 to be maintained as regards Iralco until the annulment of Implementing Regulation No 1264/2012 takes effect;

4)      Orders the Council of the European Union to bear its own costs and to pay the costs of Iralco.

Delivered in open court in Luxembourg on 15 September 2015.

[Signatures]

* Language of the case: English.

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