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

I - 28      

            I - 27

JUDGMENT OF THE COURT (Fifth Chamber)

21 April 2016 (*)

(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)

In Case C‑200/13 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 16 April 2013,

Council of the European Union, represented by S. Boelaert and M. Bishop, acting as Agents,

appellant,

supported by:

United Kingdom of Great Britain and Northern Ireland, represented by L. Christie and S. Behzadi-Spencer, acting as Agents, and by S. Lee, Barrister,

the other parties to the proceedings being:

Bank Saderat Iran, established in Tehran (Iran), represented by D. Wyatt QC, R. Blakeley, Barrister, and by S. Jeffrey, S. Ashley and A. Irvine, Solicitors,

applicant at first instance,

European Commission, represented by D. Gauci and M. Konstantinidis, acting as Agents, with an address for service in Luxembourg,

intervener at first instance,

THE COURT (Fifth Chamber),

composed of T. von Danwitz, President of the Fourth Chamber acting as President of the Fifth Chamber, D. Šváby, A. Rosas (Rapporteur), E. Juhász and C. Vajda, Judges,

Advocate General: E. Sharpston,

Registrar: L. Carrasco Marco, Administrator,

having regard to the written procedure and further to the hearing on 10 September 2014,

after hearing the Opinion of the Advocate General at the sitting on 26 February 2015,

gives the following

Judgment

1        By its appeal, the Council of the European Union requests the setting aside of the judgment of the General Court of the European Union of 5 February 2013 in Bank Saderat Iran v Council (T‑494/10, EU:T:2013:59) (‘the judgment under appeal’), by which the General Court annulled, in so far as they concern Bank Saderat Iran:

–      point 7 of Table B 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 corrigendum OJ 2010 L 197, p. 19);

–      point 5 of Table B in 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 (OJ 2010 L 195, p. 25);

–      point 7 of Table I.B in the Annex to Council Decision 2010/644/CFSP of 25 October 2010 amending Decision 2010/413 (OJ 2010 L 281, p. 81);

–      point 7 of Table B in 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 (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);

–      point 7 of Table I.B in Annex IX to 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 the name ‘Bank Saderat Iran’ appears on the lists of persons, entities and bodies to whom the restrictive measures decided upon under those acts (together ‘the acts at issue’) apply.

 Legal context and background to the dispute

2        Concerned by the many reports of the Director General of the International Atomic Energy Agency (IAEA) and resolutions of the IAEA Board of Governors related to the nuclear programme of the Islamic Republic of Iran, the United Nations Security Council (‘the Security Council’) adopted Resolution 1737 (2006) on 23 December 2006, paragraph 12 of which, read in conjunction with the annex thereto, lists a series of persons and entities regarded as being involved in nuclear proliferation, whose funds and economic resources were required to be frozen.

3        On 27 February 2007, the Council adopted Common Position 2007/140/CFSP concerning restrictive measures against Iran (OJ 2007 L 61, p. 49) in order to implement Resolution 1737 (2006) in the European Union.

4        Article 5(1) of Common Position 2007/140 provided for the freezing of all the funds and economic resources of certain categories of persons and entities specified in Article 5(1)(a) and (b). Thus, point (a) of Article 5(1) referred to persons and entities designated in the Annex to Resolution 1737 (2006) as well as additional persons and entities designated by the Security Council or by the Security Council Committee established pursuant to paragraph 18 of Resolution 1737 (2006). The list of those persons and entities was set out in Annex I to Common Position 2007/140. Point (b) of Article 5(1) referred to persons and entities not covered by Annex I that, inter alia, are engaged in, directly associated with, or providing support for, the Islamic Republic of Iran’s proliferation-sensitive nuclear activities. The list of those persons and entities was set out in Annex II to Common Position 2007/140.

5        As regards the powers of the European Community, Resolution 1737 (2006) was implemented by Council Regulation (EC) No 423/2007 of 19 April 2007 concerning restrictive measures against Iran (OJ 2007 L 103, p. 1), which was adopted on the basis of Articles 60 EC and 301 EC and refers to Common Position 2007/140, the content of which is essentially similar, in that the same names of entities and of natural persons are listed in Annex IV to that regulation in the case of the persons, entities and bodies designated by the Security Council or the Sanctions Committee, and in Annex V to that regulation in the case of persons, entities and bodies other than those listed in Annex IV. 

6        Article 7(2)(a) of Regulation No 423/2007 was worded as follows:

‘All funds and economic resources belonging to, owned, held or controlled by the persons, entities and bodies listed in Annex V shall be frozen. Annex V shall include natural and legal persons, entities and bodies, not covered by Annex IV, who, in accordance with Article 5(1)(b) of Common Position 2007/140/CFSP, have been identified as:

(a)      being engaged in, directly associated with, or providing support for, Iran’s proliferation-sensitive nuclear activities ...’

7        Noting that the Islamic Republic of Iran was pursuing its nuclear enrichment-related activities and not collaborating with the IAEA, the Security Council adopted Resolution 1803 (2008) on 3 March 2008. In paragraph 10 of that resolution, the Security Council:

‘Calls upon all States to exercise vigilance over the activities of financial institutions in their territories with all banks domiciled in Iran, in particular with Bank Melli and Bank Saderat, and their branches and subsidiaries abroad, in order to avoid such activities contributing to the proliferation-sensitive nuclear activities, or to the development of nuclear weapon delivery systems, as referred to in Resolution 1737 (2006).’

8        By Resolution 1929 (2010) of 9 June 2010, the Security Council adopted stricter measures and in particular decided to freeze the funds of various financial entities. In paragraph 21 of that resolution, the Security Council calls upon States ‘to prevent the provision of financial services, including insurance or re-insurance, or the transfer to, through, or from their territory, or to or by their nationals or entities organised under their laws (including branches abroad), or persons or financial institutions in their territory, of any financial or other assets or resources if they have information that provides reasonable grounds to believe that such services, assets or resources could contribute to Iran’s proliferation-sensitive nuclear activities, or the development of nuclear weapon delivery systems, including by freezing any financial or other assets or resources on their territories or that hereafter come within their territories, or that are subject to their jurisdiction or that hereafter become subject to their jurisdiction, that are related to such programmes or activities and applying enhanced monitoring to prevent all such transactions in accordance with their national authorities and legislation’.

9        In a declaration annexed to its Conclusions of 17 June 2010, the European Council underlined its deepening concerns about Iran’s nuclear programme, welcomed the adoption by the Security Council of Resolution 1929 (2010), noted the last report of the IAEA dated 31 May 2010 and announced the introduction of new restrictive measures relating, inter alia, to the financial sector.

10      By Decision 2010/413, adopted on 26 July 2010, the Council implemented that declaration, repealing Common Position 2007/140 and adopting additional restrictive measures as compared therewith. Recitals 17 to 20 of Decision 2010/413, relating to financial activities, recall the decisions of the Security Council in Resolution 1929 (2010) and the Declaration of the European Council of 17 June 2010. Chapter 2 of Decision 2010/413 deals with the financial sector. Article 10(1) of that decision provides that, in order to prevent the provision of financial services, or the transfer to, through, or from the territories of Member States, or to or by nationals of Member States or entities organised under their laws (including branches abroad), or persons or financial institutions in the territories of Member States, of any financial or other assets or resources that could contribute to Iran’s proliferation-sensitive nuclear activities, or the development of nuclear weapon delivery systems, Member States are to exercise enhanced monitoring over all the activities of financial institutions within their jurisdiction with banks domiciled in Iran, branches, subsidiaries or entities controlled by them.

11      Article 20(1) of Decision 2010/413 provides for the funds of several categories of persons and entities to be frozen. Point (a) of Article 20(1) refers to persons and entities designated by the Security Council, who are listed in Annex I to the decision. Point (b) of Article 20(1) concerns ‘persons and entities not covered by Annex I 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 persons or entities acting on their behalf or at their direction, or entities owned or controlled by them, including through illicit means, or persons and entities that have assisted designated persons or entities in evading or violating the provisions of [United Nations Security Council Resolution (“UNSCR”)] 1737 (2006), UNSCR 1747 (2007), UNSCR 1803 (2008) and UNSCR 1929 (2010) or this Decision as well as other senior members and entities of [the Islamic Revolutionary Guards Corps] and [Islamic Republic of Iran Shipping Lines] and entities owned or controlled by them or acting on their behalf, as listed in Annex II’.

12      A number of financial entities or groups of such entities are mentioned in Annex II to Decision 2010/413. Bank Saderat Iran (including all branches and subsidiaries) is listed at point 7 of Part I.B of that annex. The following reasons were given:

‘[Bank Saderat Iran] is an Iranian state-owned bank (94%-owned by [the Iranian] government). Bank Saderat Iran has provided financial services for entities procuring on behalf of Iran’s nuclear and ballistic missile programmes, including entities designated under UNSCR 1737 [(2006)]. [Bank Saderat Iran] handled [Defence Industries Organisation] (sanctioned in UNSCR 1737 [(2006)]) and Iran Electronics Industries payments and letters of credit as recently as March 2009. In 2003 [Bank Saderat Iran] handled letter of credit on behalf of [Iranian] nuclear-related Mesbah Energy Company (subsequently sanctioned in UNSCR 1737 [(2006)]).’

13      By Implementing Regulation No 668/2010, adopted on 26 July 2010 to implement Article 7(2) of Regulation No 423/2007, the name of Bank Saderat Iran, mentioned at point 5 of Part I.B of the annex to that implementing regulation, was added to the list of legal persons, entities and bodies in Table I of Annex V to Regulation No 423/2007.

14      The reasons for Bank Saderat Iran’s inclusion on that list are virtually identical to those set out in Decision 2010/413.

15      By letter of 27 July 2010, the Council informed Bank Saderat Iran that its name had been included on the list in Annex II to Decision 2010/413 and on the list in Annex V to Regulation No 423/2007.

16      By letters of 18 and 25 August and 2, 9 and 30 September 2010, Bank Saderat Iran asked the Council to disclose the information on the basis of which it had adopted the restrictive measures to which Bank Saderat Iran was made subject. By letter of 15 September 2010, it also asked the Council to reconsider that decision.

17      Annex II to Decision 2010/413 was reviewed and rewritten by Decision 2010/644, adopted on 25 October 2010. In recital 2 of that decision, the Council states that it took account of observations submitted by those concerned.

18      Bank Saderat Iran’s name was included at point 7 of the list of entities in Table I of Annex II to Decision 2010/413, as amended by Decision 2010/644. The statement of reasons no longer indicates that it is an Iranian state-owned bank that is 94%-owned by the Iranian government, stating instead that it is partly owned by the Iranian government. The statement of reasons is otherwise identical to that set out in Decision 2010/413.

19      Regulation No 423/2007 was repealed and replaced by Regulation No 961/2010, which was adopted on 25 October 2010. In accordance with Article 16(2) of that regulation:

‘All funds and economic resources belonging to, owned, held or controlled by the persons, entities and bodies listed in Annex VIII shall be frozen. Annex VIII shall include the natural and legal persons, entities and bodies … who, in accordance with Article 20(1)(b) 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, [Decision 2010/413] or UNSCR 1737 (2006), UNSCR 1747 (2007), UNSCR 1803 (2008) and UNSCR 1929 (2010);

…’

20      Bank Saderat Iran’s name was listed by the Council at point 7 of the list of legal persons, entities and bodies set out in Annex VIII B to Regulation No 961/2010. The reasons for that listing are virtually identical to those set out in Decision 2010/413 as amended by Decision 2010/644.

21      By letter of 28 October 2010, the Council replied to Bank Saderat Iran’s letter of 15 September 2010, stating that, after a review, it was rejecting Bank Saderat Iran’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 Bank Saderat Iran’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 Bank Saderat Iran’s file, the Council sent to it copies of two proposals for the adoption of restrictive measures submitted by Member States (‘the proposals disclosed on 28 October 2010’).

22      On 31 May 2011, the Council sent to Bank Saderat Iran, as an annex to the rejoinder lodged in the action for annulment that gave rise to the judgment under appeal, a Council document dated 27 May 2011 containing an extract from a third proposal to include Bank Saderat Iran on the list of entities subject to restrictive measures (‘the third proposal’).

23      On 1 December 2011, having conducted a review, the Council decided, by Decision 2011/783, to maintain Bank Saderat Iran on the list in Decision 2010/413, and, by Implementing Regulation No 1245/2011, to maintain Bank Saderat Iran on the list in Regulation No 961/2010.

24      Referring to the Conclusions of the European Council of 9 December 2011, the Council adopted new measures by Decision 2012/35/CFSP of 23 January 2012 amending Decision 2010/413 (OJ 2012 L 19, p. 22).

25      On 23 March 2012, it adopted new measures by Regulation No 267/2012, which repeals and replaces Regulation No 961/2010. The freezing of funds and economic resources is provided for in Article 23 of Regulation No 267/2012. Article 23(2) was then worded 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, [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 persons and entities associated with them;

…’

26      Bank Saderat Iran is listed at point 7 of Table I.B of Annex IX to Regulation No 267/2012. The reasons for that listing are virtually identical to those set out in Decision 2010/413 as amended by Decision 2010/644.

 The procedure before the General Court and the judgment under appeal

27      By application lodged at the General Court Registry on 7 October 2010, Bank Saderat Iran brought an action for annulment against Decision 2010/413 and Implementing Regulation No 668/2010. It subsequently extended the form of order sought to include an application for 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 acts concern it.

28      First of all, the General Court rejected the arguments of the Council and the Commission that Bank Saderat Iran was not entitled to rely on fundamental rights protection and guarantees.

29      Next, it examined the action brought by Bank Saderat Iran, which put forward three pleas in law. The first plea was a claim of an infringement of the obligation to state reasons, its rights of defence and its right to effective judicial protection. The second plea was a claim of a manifest error of assessment as regards the adoption of restrictive measures against it. The third plea alleged breach of the principle of proportionality.

30      In the context of the first plea, alleging an infringement of the obligation to state reasons, the rights of the defence and the right to effective judicial protection, the General Court examined each of the reasons relating to Bank Saderat Iran stated in the acts at issue and in the proposals for the adoption of restrictive measures. It held that the Council was in breach of the obligation to state reasons as regards the second reason, relating to financial services, owing to its lack of detail. As a result of that lack of detail, Bank Saderat Iran’s right to judicial protection had also been infringed with regard to the second reason. That right had also been infringed with regard to Decision 2010/413, Implementing Regulation No 668/2010, Decision 2010/644 and Regulation No 961/2010 owing to the late notification of the third proposal for the adoption of restrictive measures. Lastly, the General Court held that the assessment of Decision 2010/413 and Implementing Regulation No 668/2010 was defective in so far as there was nothing in the Court file to suggest that the Council had checked the relevance and the validity of the evidence concerning Bank Saderat Iran. Consequently, the General Court upheld the first plea in so far as it concerned Decision 2010/413, Implementing Regulation No 668/2010, Decision 2010/644 and Regulation No 961/2010.

31      Next, the General Court examined the second plea, alleging a manifest error of assessment as regards the adoption of restrictive measures against Bank Saderat Iran. This examination related to the reasons regarded as being sufficiently detailed and not in breach of the obligation to state reasons. Since none of those reasons on which the Council relied in Bank Saderat Iran’s case justified the adoption of restrictive measures against it, the General Court upheld the second plea and annulled the acts at issue in so far as they concerned Bank Saderat Iran, finding that there was no need to examine the third plea, alleging breach of the principle of proportionality.

32      Bank Saderat Iran maintained that Regulation No 267/2012 amounted, as far as it was 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 of the Court of Justice of the European Union should not have been applicable to the present case. In paragraph 123 of the judgment under appeal, the General Court held that, having regard to the case-law of the Court of Justice, Regulation No 267/2012, including Annex IX thereto, 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. Consequently, according to the General Court, the second paragraph of Article 60 of the Statute of the Court of Justice is applicable in this case.

 Forms of order sought

 The main appeal

33      The Council claims that the Court of Justice should:

–      set aside the judgment under appeal;

–      give a definitive ruling on the case and dismiss the action brought by Bank Saderat Iran against the acts at issue;

–      order Bank Saderat Iran to pay the costs incurred by the Council both at first instance and in this appeal.

34      Bank Saderat Iran contends that the Court should dismiss the appeal and order the Council to pay the costs.

35      The Commission supports in its entirety the form of order sought by the Council in its appeal.

36      The United Kingdom of Great Britain and Northern Ireland claims that the Court should grant the appeal, set aside the judgment under appeal and dismiss the action brought by Bank Saderat Iran against the acts at issue.

 The cross-appeal

37      Bank Saderat Iran claims that the Court of Justice should:

–      allow the cross-appeal and set aside the judgment of the General Court to the extent of the errors identified in the cross-appeal;

–      annul the acts at issue (and each of them) in so far as they apply to Bank Saderat Iran; and

–      order the Council to pay Bank Saderat Iran’s costs of the cross-appeal.

38      The Council contends that the Court should dismiss the cross-appeal and order Bank Saderat Iran to pay the costs of that cross-appeal.

 The main appeal

39      The Council submits that the judgment under appeal is vitiated by a number of errors of law.

 Objection of inadmissibility in respect of the pleas alleging infringement of fundamental rights

 The judgment under appeal

40      In paragraph 44 of the judgment under appeal, the General Court rejected the arguments of both the Council and the Commission that Bank Saderat Iran was not entitled to invoke fundamental rights protection and guarantees. It held, in paragraph 39 of that judgment, that EU law contains no rule preventing legal persons which are emanations of non-Member countries from taking advantage of fundamental rights protection and guarantees, and, in paragraph 40 of that judgment, that in any event the Council and the Commission had not put forward any evidence capable of proving that Bank Saderat Iran was in fact an emanation of the Iranian State.

 Arguments of the parties

41      The Council takes issue, first of all, with paragraphs 34 to 43 of the judgment under appeal. It submits that the General Court made an error of law by holding that even if it were established that Bank Saderat Iran is an emanation of the Iranian State, Bank Saderat Iran would be entitled to rely on fundamental rights protections and guarantees before the Courts of the European Union.

42      It relies on Article 34 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed at Rome on 4 November 1950 (‘the ECHR’), which precludes governmental organisations and similar entities from bringing proceedings before the European Court of Human Rights, and on other corresponding provisions, such as Article 44 of the American Convention on Human Rights of 22 November 1969. The ratio legis is that a State cannot enjoy fundamental rights. Although neither the EU Treaties nor the Charter of Fundamental Rights of the European Union contain provisions similar to Article 34 of the ECHR, the same principle is, it maintains, applicable.

43      It asserts that the General Court also erred in law when it found that there was no evidence to show that Bank Saderat Iran does actually constitute a governmental organisation. In this regard, the Council refers to:

–      the case-law of the European Court of Human Rights, according to which the specific factual and legal context must be carefully assessed in order to determine whether an entity is a governmental organisation or entity or a non-governmental one;

–      the work of the United Nations International Law Commission, and in particular the commentaries relating to Article 2(b) of the United Nations Convention on Jurisdictional Immunities of States and their property, adopted on 2 December 2004, according to which the concept of ‘agencies or instrumentalities of the State or other entities’ may include State enterprises or other entities established by the State performing commercial transactions; and

–      the case-law of the Court of Justice on State aid (judgment in France v Commission, C‑482/99, EU:C:2002:294, paragraph 55).

44      According to the Council, the General Court was therefore mistaken in considering that, since Bank Saderat Iran carries out commercial activities subject to ordinary law, these cannot qualify as a ‘public service’ even though they are essential for the operation of a State’s economy. Equally, the General Court failed to take proper account of the influence which the Iranian Government exercises over Bank Saderat Iran, despite the reduction of its shareholding following a process of privatisation.

45      Bank Saderat Iran contests the Council’s arguments.

 Findings of the Court

46      It must be pointed out that the action brought by Bank Saderat Iran falls within the scope of the second paragraph of Article 275 TFEU (judgments in Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 50, and Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 48).

47      Bank Saderat Iran puts forward pleas alleging an infringement of its rights of defence and of its right to effective judicial protection. Such rights may be invoked by any natural person or any entity bringing an action before the Courts of the European Union (judgment in Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 49).

48      The same applies to pleas alleging an infringement of essential procedural requirements, such as that alleging an infringement of the obligation to state the reasons for a measure (judgment in Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 50).

49      As regards pleas alleging a manifest error of assessment or a breach of the general principle of proportionality, it must be noted that the question whether a State entity is entitled to invoke them is one that relates to the merits of the case (judgments in Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 51, and Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 51).

50      In the light of the above, the Council’s plea must be rejected, and there is no need to examine the argument that the General Court erred in holding that it was not established that Bank Saderat Iran was a State entity, since that argument is ineffective.

 The obligation to state reasons, the rights of the defence, the right to effective judicial protection and access to the file

 The judgment under appeal

51      In paragraphs 47 to 49 of the judgment under appeal, the General Court recalled the case-law relating to the obligation to state the reasons for an act, provided for by the second paragraph of Article 296 TFEU. In paragraphs 50 to 53 of its judgment, it recalled the case-law relating to the rights of the defence and to the obligation to disclose the evidence adduced against the entity concerned so that it is afforded the opportunity effectively to make known its view on that evidence.

52      In paragraphs 61 and 62 of the judgment under appeal, the General Court held that, in order to assess whether the obligation to state reasons and the obligation to disclose to Bank Saderat Iran the evidence considered to inculpate it have been fulfilled, there must be taken into consideration not only the reasons stated in the acts at issue, but two proposals for the adoption of restrictive measures which the Council sent to Bank Saderat Iran by letter of 28 October 2010, and the third proposal which the Council annexed to its rejoinder, lodged on 31 May 2011. According to the General Court, those proposals were submitted to the delegations of the Member States in the context of the adoption of the restrictive measures affecting Bank Saderat Iran, and consequently constitute evidence on which those measures are based.

53      In paragraph 63 of the judgment under appeal, the General Court stated:

‘... it is true that the three proposals were disclosed to [Bank Saderat Iran] 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.’

54      In paragraphs 64 to 73 of the judgment under appeal, the General Court examined each of the reasons stated in the acts at issue and in the proposals for the adoption of restrictive measures. Paragraphs 64 to 66 are worded as follows:

‘64      The [acts at issue] 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 first reason”)];

–        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 [UNSCR] 1737 (2006) [(“the second reason”)];

–        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 [(“the third reason”)];

–        in 2003 the applicant handled letters of credit on behalf of Mesbah Energy Company, which is linked to the Iranian nuclear programme [(“the fourth reason”)].

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 [acts at issue].

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.’

55      In paragraph 73, the General Court held that, as regards the second reason, the Council was in breach of the obligation to state reasons and the obligation to disclose to Bank Saderat Iran the evidence adduced against it, owing to the excessive vagueness of the second reason, but that those obligations had been respected as regards the other reasons.

56      As regards access to the file, the General Court held, in paragraph 79 of the judgment under appeal, that the Council did not give Bank Saderat Iran access to the proposals for the adoption of restrictive measures in good time, two proposals having been disclosed as an annex to a letter of 28 October 2010, and the third, as an annex to the rejoinder, whereas 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.

57      Ruling on Bank Saderat Iran’s ability effectively to make known its point of view, the General Court held, in paragraphs 82 and 83 of the judgment under appeal, that Bank Saderat Iran had the opportunity effectively to make known its point of view, except as regards (i) the second reason provided by the Council, which was excessively vague, and (ii) the three proposals for the adoption of restrictive measures, since those proposals were not known to Bank Saderat Iran on 15 September 2010.

58      In paragraph 86 of the judgment under appeal, the General Court held that Bank Saderat Iran’s observations were taken into consideration by the Council during its review. It noted in particular, in paragraph 85 of that judgment, that the Council corrected the reference to the Iranian State’s holding in Bank Saderat Iran’s share capital, the accuracy of which had been disputed by Bank Saderat Iran.

59      In paragraph 90 of the judgment under appeal, the General Court held that Bank Saderat Iran’s right to effective judicial protection had been infringed, in view of the vagueness of the second reason provided by the Council and the late notification of the three proposals for the adoption of restrictive measures.

 Arguments of the parties

60      In the first place, under the heading ‘Obligation to state reasons’, the Council submits that the General Court made an error of law by considering each reason separately instead of examining them together as a whole. It asserts that those reasons are clearly related to each other. In particular, the third and fourth reasons specify more precisely the conduct mentioned in the second. Moreover, even though that second reason did not specify by name the UN and EU listed entities to which Bank Saderat Iran provided banking services, it would still have been possible for Bank Saderat Iran to contest that reason if none of its customers had appeared on the UN or EU lists.

61      The Commission submits that the position of the General Court in paragraph 73 of the judgment under appeal, according to which the action for annulment is well founded with regard to some of the reasons but not the second, is not tenable. The Council could not be considered to have infringed the obligation to state reasons and the obligation of disclosure to Bank Saderat Iran for each reason separately.

62      In its statement in intervention, the United Kingdom also challenges the General Court’s finding that the second reason is excessively vague, when that reason must be read in conjunction with the reasons that follow it.

63      In the second place, under the heading ‘Access to the file’, the Council challenges the General Court’s decision in paragraph 61 of the judgment under appeal 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 [acts at issue], but the three proposals for the adoption of restrictive measures sent by the Council to the applicant’.

64      It claims that the General Court erroneously applied the case-law cited in paragraph 52 of the judgment under appeal, which was established in the context of the first cases concerning terrorism, when no reasons were given to justify entries on a list of persons, entities and bodies subject to restrictive measures, and that, in that situation, the terms ‘reasons’ and ‘evidence’ were interchangeable. In the present case, the acts contained the reasons, and so there was no justification for communicating the proposals for the adoption of restrictive measures, which did not in any event provide any added value.

65      As to material which was not included in the Council’s statement of reasons, this should not have to be communicated separately either, since it cannot necessarily be assumed that the Council relied on it as reasons or as evidence. According to the Council, the General Court should have applied the case-law which it cited in paragraph 53 of the judgment under appeal, according to which, when sufficiently precise information has been communicated, 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 (judgment in Bank Melli Iran v Council, T‑390/08, EU:T:2009:401, paragraph 97).

66      Referring to paragraph 111 of the judgment in Commission and Others v Kadi (C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518), the United Kingdom submits that, as regards the lists of entities subject to restrictive measures, it is only the statement of the listing reasons provided by the Council that must be disclosed, not the listing proposals in respect of the entities concerned.

67      Bank Saderat Iran endorses the General Court’s reasoning. It contends that the third and fourth reasons cannot make the second reason more specific.

68      Bank Saderat Iran claims that the Council was obliged to provide the listing proposals at the same time or shortly after Bank Saderat Iran was listed, since this was the only evidence held on the file. As regards the Council’s assertion that obtaining those listing proposals would have been of no use to Bank Saderat Iran, Bank Saderat Iran responds that it is not for the Council to assess what elements of the file might be of value to an applicant. It would be contrary to the rights of the defence to permit the Council to choose which elements of the file to withhold.

69      Bank Saderat Iran challenges the argument that the case-law arising from the judgment in Bank Melli Iran v Council (T‑390/08, EU:T:2009:401) should have been applied in the present case, in so far as it did not have sufficiently precise information to enable it effectively to state its point of view on the evidence adduced against it. It states that both the General Court and the Council proceeded on the basis that the listing proposals constituted the evidence, when that was not the case.

 Findings of the Court

70      According to a consistent body of case-law, the purpose of the obligation to state the reasons on which an act adversely affecting an individual is based, which is a corollary of the principle of respect for the rights of the defence, is, first, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the Courts of the European Union and, secondly, to enable those Courts to review the legality of that act (see judgments in Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 49 and the case-law cited, and Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 74).

71      The statement of reasons required by Article 296 TFEU must be appropriate to the act at issue and 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 reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient 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 (see judgment in Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 53 and the case-law cited). The reasons given for a measure adversely affecting a person are sufficient if that measure was adopted in a context which was known to that person and which enables him to understand the scope of the measure concerning him (judgments in Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 71, and Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 75).

72      As regards 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 (see, to that effect, judgments in Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraphs 116 and 118, and Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 76).

73      In the present case, the General Court did not make an error of law when assessing the second reason, since the Council did not argue before the General Court that the second, third and fourth reasons had to be read in conjunction with each other.

74      In any event, even if, as the Council maintains, that second reason should have been construed in the light of the third and fourth reasons, reading those reasons in conjunction with each other would not enable Bank Saderat Iran to establish specifically which banking services it provided to which entities ‘procuring on behalf of Iran’s nuclear and ballistic missile programmes’, including some that are ‘subject to [UNSCR] 1737 (2006)’. In those circumstances, the General Court cannot be criticised for having concluded, in paragraph 73 of the judgment under appeal, that the second listing reason is too vague.

75      Lastly, as regards access to the file, the General Court rightly found, in paragraphs 77, 83 and 102 of the judgment under appeal, that the Council was obliged to ensure, before adopting restrictive measures, that the evidence adduced against Bank Saderat Iran could be notified to it in good time so that it would be able effectively to make known its point of view, and that the late notification of the three proposals for the adoption of restrictive measures infringed Bank Saderat Iran’s rights of defence and its right to effective judicial protection and, therefore, affected 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 concerned Bank Saderat Iran.

 Defects in the Council’s assessment

 The judgment under appeal

76      In the context, again, of the plea alleging infringement of the obligation to state reasons, the rights of the defence and the right to effective judicial protection, the General Court summarises one of Bank Saderat Iran’s arguments as follows:

‘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.’

77      The General Court ruled as follows:

‘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 [acts at issue], 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.

…

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.’

78      In paragraph 100 of the judgment under appeal, the General Court concluded that, 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 Bank Saderat Iran submitted to it, with the consequence that those measures were tainted by illegality.

 Arguments of the parties

79      The Council, supported by the Commission, submits that the General Court erred in law by requiring, in paragraphs 94 and 95 of the judgment under appeal, that the file contain elements that would demonstrate that the Council checked the evidence submitted to it. The Council argues that it is not possible to determine what elements would need to be produced in order to show that such a check by the members of the Council had taken place, and, moreover, that certain evidence came from confidential sources to which the members of the Council as a whole do not have access.

80      Bank Saderat Iran contends that the legal principle that the Council must assess the relevance and the validity of the information and evidence submitted to it is not contested. It submits that the General Court was entitled to rely on the absence of any evidence that the Council had conducted a proper check in support of its finding that the Council had not done so. Bank Saderat Iran notes, moreover, that the Council admits that it did not undertake any check of the claims made in the proposals submitted to it regarding Bank Saderat Iran’s designation as an entity subject to restrictive measures precisely because it did not have access to the underlying evidence, which was considered confidential.

 Findings of the Court

81      It is evident from the judgment under appeal that Bank Saderat Iran was entered on the list of entities subject to restrictive measures by the adoption of Decision 2010/413 and Implementing Regulation No 668/2010 solely on the basis of the listing proposals submitted by Member States. However, the General Court does not show how that factor can constitute one of the grounds for annulment referred to in Article 263 TFEU. 

82      As the Advocate General noted at point 95 of her Opinion, it does not appear that checking the relevance and validity of the material concerning Bank Saderat Iran that was submitted to the Council prior to the adoption of Decision 2010/413 and Implementing Regulation No 668/2010 can constitute an essential procedural requirement for the adoption of those acts the non-compliance with which could result in those acts being unlawful. The General Court did not establish that such a requirement is laid down by the FEU Treaty or secondary law.

83      Nor did the General Court establish in what respect that element could contribute to an infringement of the obligation to state reasons, Bank Saderat Iran’s rights of defence or its right to effective judicial protection, on which Bank Saderat Iran relies in its first plea, or indeed any other rule of law.

84      Since none of the grounds for annulment referred to in Article 263 TFEU has been shown by the General Court to affect the validity of Decision 2010/413 and Implementing Regulation No 668/2010 on the basis of the failure to check the relevance and validity of the material concerning Bank Saderat Iran, it must be held that the General Court made an error of law when it ruled, in paragraph 94 of the judgment under appeal 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. Consequently, the General Court made the same error of law by concluding, in paragraph 100 of the judgment under appeal, that, 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 Bank Saderat Iran submitted to it, with the consequence that those measures were tainted by illegality.

 Manifest error of assessment

 The judgment under appeal

85      In paragraph 106 of the judgment under appeal, the General Court considered that, taking into consideration the fact that the second reason relied on by the Council against Bank Saderat Iran did not constitute an adequate statement of reasons, it needed to be concerned only with determining whether the first, third, fourth and fifth reasons relied on were well founded.

86      In paragraph 107 of that judgment, it held that the first reason, that Bank Saderat Iran is a bank that is 94% owned by the Iranian State, is based on a mistaken factual premiss and cannot therefore justify the restrictive measures imposed on Bank Saderat Iran by Decision 2010/413 and Implementing Regulation No 668/2010.

87      As regards the fourth reason, relating to Mesbah Energy Company, the General Court held, in paragraph 109 of the judgment under appeal, that the Council had produced no evidence or information to establish that such services were provided, or that Bank Saderat Iran was aware of the involvement of Mesbah Energy Company, which in 2003 was not yet the subject of restrictive measures, in nuclear proliferation.

88      In paragraph 110 of the judgment under appeal, the General Court held that the same finding had to 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 was concerned. While Bank Saderat Iran 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 Bank Saderat Iran was aware of the involvement of Sanam Industrial Group in nuclear proliferation even before the adoption of the restrictive measures against that party.

89      As regards the third reason, Bank Saderat Iran did not dispute that DIO and IEI were engaged in activities linked to nuclear proliferation, but it did not accept that the services which it provided to those entities justified the adoption of restrictive measures against it. It maintained in that regard, 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. In order to determine whether those arguments were well founded, the General Court asked the Council to send it detailed information on the letters of credit handled by Bank Saderat Iran on behalf of DIO and IEI. Since the Council did not produce any evidence in reply to the General Court’s request, the General Court held, in paragraph 116 of the judgment under appeal, that the fact that it was impossible to determine whether Bank Saderat Iran’s arguments were well founded was attributable to the Council’s failure to meet its obligation to submit relevant evidence and information.

90      Having regard to these matters, the General Court concluded, in paragraph 116 of the judgment under appeal, that the second plea in law had to be upheld.

 Arguments of the parties

91      As regards the fourth reason, concerning the letters of credit on behalf of Mesbah Energy Company, the Council submits that the General Court failed to take proper account of the clandestine nature of the activities, which means that the evidence comes from confidential sources and cannot be disclosed in every case. It also refers to the principle of mutual trust between Member States and the institutions, and the principle of sincere cooperation. The Council also submits that, according to the case-law of the European Court of Human Rights, there is no absolute right to the disclosure of evidence. It argues that if that principle applies to criminal charges, there is even more reason for it to apply to the restrictive measures concerned, which are precautionary measures.

92      With regard to the third reason, concerning the handling, in March 2009, of letters of credit of DIO, designated by UNSCR 1737 (2006), and of IEI, designated by Decision 2008/475, the Council notes that Bank Saderat Iran did not dispute their existence but claimed that they constituted ordinary banking services, in the context of export credits. Supported by the United Kingdom, it submits that the General Court erred in law by holding that the Council should have provided detailed information on those letters of credit. In its view, the handling of those letters of credit was sufficient of itself to justify the restrictive measures against Bank Saderat Iran. It recalls in that respect that a number of provisions, such as Articles 1(4) and 15(1) of Decision 2010/413, Article 4 of Regulation No 267/2012, paragraph 7 of UNSCR 1737 (2006) and paragraph 5 of UNSCR 1747 (2007), prohibit the export from Iran and, more particularly, the purchase or transport from Iran, of proliferation-sensitive materials, including in other countries, as well as arms and weapons, and it is therefore wrong to suppose that letters of credit enabling DIO and IEI to export goods would have no connection with the nuclear activities of the Islamic Republic of Iran. The Council submits that the General Court wrongly substituted its own assessment of what is appropriate for that of the Council with regard to the facts justifying the imposition of an asset freeze as a precautionary measure, contrary to its own case-law (see, to that effect, judgment in People’s Mojahedin Organization of Iran v Council, T‑256/07, EU:T:2008:461, paragraph 138).

93      The United Kingdom emphasises that Bank Saderat Iran is a highly important Iranian bank which is centrally placed in Iran, enabling it to provide support for proliferation-sensitive nuclear activities. It is essentially under the control of the Iranian Government and there is a danger that it may, given its position, provide such support. For that Member State, that justified precautionary measures, given the legitimate and highly important aim of putting pressure on Iran to cease its proliferation-sensitive nuclear activities in order to safeguard peace and security. Decisions of that nature fall within the Council’s margin of appreciation.

94      The Commission submits that the activities of Bank Saderat Iran must be seen in a more global perspective and cannot be examined as individual transactions taken out of context. It notes that the listing of Bank Saderat Iran was considered by the Security Council.

95      The rationale behind the listing of banks is that Iran needs to use banking facilities in order to import uranium, technology and other materials. According to the Commission, excluding a bank such as Bank Saderat Iran from one of the principal financial markets in which such business may be transacted is rationally connected to the international community’s goal of preventing the development and proliferation of nuclear weapons. The Council should not be obliged to prove that the services and transactions specifically at issue were ‘directly’ linked to nuclear proliferation, as the General Court seems to require. It is sufficient that the entity to be listed supplies services to third parties, such as DIO and IEI in the present case, which are known to be engaged in nuclear proliferation.

96      Bank Saderat Iran contests the arguments put forward by the Council, the Commission and the United Kingdom.

 Findings of the Court

97      The Council’s arguments relate only to the General Court’s assessment as to whether the third and fourth reasons are well founded.

98      Regarding the material used to justify Bank Saderat Iran’s listing and the evidence that that listing was well founded, 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, 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 (see, to that effect, judgments in Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 119; Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 64; Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 73; Anbouba v Council, C‑605/13 P, EU:C:2015:248, paragraph 45; Anbouba v Council, C‑630/13 P, EU:C:2015:247, paragraph 46; Ipatau v Council, C‑535/14 P, EU:C:2015:407, paragraph 42; and Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 109).

99      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 (see judgments in Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 120; Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 65; and Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 110).

100    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 (see judgments in Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 123; Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 68; and Council v Bank Mellat, C‑176/13 P, EU:C:2016:96, paragraph 111).

101    As regards the fourth reason, relating to Mesbah Energy Company, the Council does not deny that it produced no evidence, as the General Court found in paragraph 109 of the judgment under appeal. By contrast, it claims that the evidence concerning Bank Saderat Iran’s support for the Islamic Republic of Iran’s nuclear activities comes from confidential sources which, if disclosed, would enable those who provided the information to be identified, endangering their lives and their safety.

102    It must be noted in that regard that that argument has been relied on for the first time at the stage of the appeal. As it is, in accordance with settled case-law, to allow a party to put forward for the first time before the Court of Justice a plea and arguments which it did not raise before the General Court would be to authorise it to bring before the Court of Justice, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the General Court. In an appeal, the jurisdiction of the Court of Justice is thus confined to review of the findings of law on the pleas argued before the General Court (judgment in Sweden and Others v API and Commission, C‑514/07 P, C‑528/07 P and C‑532/07 P, EU:C:2010:541, paragraph 126 and the case-law cited).

103    Accordingly, the argument relating to the confidentiality of the evidence is inadmissible.

104    Having regard to those points, the General Court did not err in law when it concluded, in paragraph 109 of the judgment under appeal, that the fourth reason could not justify the adoption of restrictive measures against Bank Saderat Iran.

105    As regards the third reason, the General Court held, having regard to the lack of detailed information concerning the letters of credit handled by Bank Saderat Iran on behalf of DIO and IEI, that it was impossible to determine whether Bank Saderat Iran’s arguments were well founded. This Court must reject the arguments of the Council, the Commission and the United Kingdom, which rely on Articles 1(4) and 15(1) of Decision 2010/413, Article 4 of Regulation No 267/2012, and on paragraphs 5, 7 and 14 of UNSCR 1737 (2006), UNSCR 1747 (2007) and UNSCR 1929 (2010) to demonstrate that Bank Saderat Iran’s handling of export letters of credit of DIO and IEI constitutes by itself support for the Islamic Republic of Iran’s proliferation-sensitive nuclear activities. The Council did not produce any evidence before the General Court to prove that those letters of credit related to goods whose export from Iran was prohibited under the provisions of the acts and resolutions cited above, and thus failed to prove that the services provided by Bank Saderat Iran to DIO and IEI constituted such support. Consequently, the General Court did not err in law when it concluded, in paragraph 116 of the judgment under appeal, that the second plea in law had to be upheld.

106    It follows from this that the Council’s arguments concerning the General Court’s assessment as to whether the fourth and third reasons are well founded must be rejected.

 Conclusions to be drawn from the examination of the main appeal

107    It is apparent from the examination of the appeal that the General Court made an error of law vitiating its reasoning by concluding, in paragraph 100 of the judgment under appeal, that, 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 Bank Saderat Iran that was submitted to it. It is necessary, however, to determine whether the operative part of that judgment can be maintained on the basis of grounds of that judgment that are not vitiated by errors of law.

108    It is apparent from the judgment under appeal that the General Court annulled the acts at issue on the basis of a combination of several reasons.

109    Thus, while the General Court wrongly found, in paragraph 100 of the judgment under appeal, that the defect in the Council’s decision justified the annulment of Decision 2010/413 and Implementing Regulation No 668/2010 as regards Bank Saderat Iran, in paragraph 102 of the judgment under appeal it annulled those acts because of other defects in respect of which the Court of Justice has found no error of law. It follows that the defect identified in paragraph 100 of the judgment under appeal does not affect the operative part of that judgment.

110    It follows from all these considerations that the main appeal must be dismissed.

 The cross-appeal

111    Bank Saderat Iran puts forward two pleas in law in support of its cross-appeal. The first plea alleges that the acts at issue were not well founded. The second plea relates to the temporal effects of the judgment under appeal.

 The first plea, alleging that the acts at issue were not well founded

 Arguments of the parties

112    By its first plea, Bank Saderat Iran maintains that the General Court erred in law in relying, in paragraph 95 of the judgment under appeal, on the erroneous premiss that the information available to the Council amounted in law to evidence capable of assessment by the Council for its relevance and validity. The file contained no evidence, however, and it was therefore, by definition, impossible for evidence to be examined. The General Court should have annulled the initial acts on that ground alone, as well as the subsequent acts.

113    The Council contends that the first plea is unfounded.

 Findings of the Court

114    As regards the first plea, it must be noted that, in accordance with Articles 169(1) and 178(1) of the Rules of Procedure of the Court of Justice, any appeal, whether it be a main appeal or a cross-appeal, must seek to have set aside, in whole or in part, the decision of the General Court.

115    In the present case, Bank Saderat Iran obtained, in the General Court, the annulment of the designations at issue, in accordance with the form of order it sought in the action. Its first plea of the cross-appeal does no more in fact than seek substitution of the grounds, although that substitution would not justify the setting aside, even in part, of the General Court’s decision. The first plea of the cross-appeal must therefore be rejected as inadmissible.

 The second plea, relating to the temporal effects of the judgment under appeal

 Arguments of the parties

116    By its second plea, Bank Saderat Iran maintains that the General Court erred in law in holding, in paragraphs 121 to 124 of the judgment under appeal, that the second paragraph of Article 60 of the Statute of the Court of Justice of the European Union was applicable to the acts at issue that were in the form of regulations. In its view, an individual designation, comprising as it does in the present case, an individual decision in the form of a regulation, should not be treated as comprising part of a regulation for the purposes of the second paragraph of Article 60 of the Statute. Consequently, the annulment of the designation of Bank Saderat Iran in the acts at issue should have been given immediate effect. It cites in this respect the case-law relating to anti-dumping regulations and the fact that the designations are notified to the persons and entities themselves.

117    The Council and the Commission contend that the second plea is unfounded.

 Findings of the Court

118    It is evident from the first paragraph of Article 60 of the Statute of the Court of Justice of the European Union that an appeal is not to have suspensory effect. The second paragraph of that article provides, however, that, 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 lodging an appeal or, if an appeal is lodged within that period, as from the date of its dismissal.

119    As the Court has held, regulations requiring the funds of designated persons and entities to be frozen resemble both measures of general application, in that they impose on a category of addressees determined in a general and abstract manner a prohibition on, inter alia, making funds and economic resources available to persons and entities named in the lists contained in their annexes, and a bundle of individual decisions affecting those persons and entities (see, to that effect, judgments in Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraphs 241 to 244, and Gbagbo and Others v Council, C‑478/11 P to C‑482/11 P, EU:C:2013:258, paragraph 56).

120    It is the individual nature of those acts which, in accordance with the second paragraph of Article 275 TFEU and the fourth paragraph of Article 263 TFEU, permits natural and legal persons to have access to the Courts of the European Union (judgment in Gbagbo and Others v Council, C‑478/11 P to C‑482/11 P, EU:C:2013:258, paragraph 57). However, the fact that the persons and entities who are the subject of the restrictive measures imposed by the regulation at issue are expressly named, so that they appear to be directly and individually concerned by it within the meaning of the fourth paragraph of Article 263 TFEU, does not mean that that act is not of general application within the meaning of the second paragraph of Article 288 TFEU or that it is not to be classified as a ‘regulation’ (judgment in Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraph 241).

121    In the present case, as the General Court held in paragraph 123 of the judgment under appeal, 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. 

122    The General Court did not, therefore, err in law when it held, in paragraph 124 of the judgment under appeal, that the second paragraph of Article 60 of the Statute of the Court of Justice of the European Union is applicable in the present case.

123    The cross-appeal must therefore be dismissed.

 Costs

124    Under Article 184(2) of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to the costs.

125    Article 138(1) of those rules, which applies to the procedure on an appeal by virtue of Article 184(1) thereof, provides that the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

126    In the main appeal, since Bank Saderat Iran has applied for costs and the Council has been unsuccessful, the latter must be ordered to bear its own costs and to pay those incurred by Bank Saderat Iran in both sets of proceedings.

127    In the cross-appeal, since the Council has applied for costs and Bank Saderat Iran has been unsuccessful, the latter must be ordered to bear its own costs in relation to the cross-appeal and to pay those incurred by the Council.

128    Article 140(1) of the Rules of Procedure, which is applicable to the procedure on an appeal by virtue of Article 184(1) thereof, provides that the Member States and institutions which have intervened in the proceedings are to bear their own costs.

129    The United Kingdom and the Commission are to bear their own costs in both sets of proceedings.

On those grounds, the Court (Fifth Chamber) hereby:

1.      Dismisses the appeal;

2.      Dismisses the cross-appeal;

3.      Orders the Council of the European Union to bear its own costs and to pay the costs incurred by Bank Saderat Iran in both sets of proceedings, except for the costs relating to the cross-appeal;

4.      Orders Bank Saderat Iran to bear its own costs relating to the cross-appeal and to pay the costs incurred by the Council of the European Union in relation to the cross-appeal.

5.      Orders the United Kingdom of Great Britain and Northern Ireland and the European Commission to bear their own costs of both sets of proceedings.

[Signatures]

** Language of the case: English.

© European Union
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