Central Bank of Iran v Council (Judgment) [2014] EUECJ T-262/12 (18 September 2014)

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(Common foreign and security policy - Restrictive measures adopted against Iran with the aim of preventing nuclear proliferation - Freezing of funds - Action for annulment - Lis pendens - Obligation to state reasons - Rights of the defence)

Central Bank of Iran, established in Tehran (Iran), represented by M. Lester, Barrister,

Council of the European Union, represented by M. Bishop and V. Piessevaux, acting as Agents,

APPLICATION for, in essence, annulment of (i) Council Decision 2012/35/CFSP of 23 January 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2012 L 19, p. 22) and Council Decision 2012/635/CFSP of 15 October 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2012 L 282, p. 58), in so far as they listed or maintained the listing, after review, of 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 Regulation (EU) No 267/2012 of 23 March 2012 concerning the adoption of restrictive measures against Iran and repealing Regulation (EU) No 961/2010 (OJ 2012 L 88, p. 1), and Council Implementing Regulation (EU) No 945/2012 of 15 October 2012 implementing Regulation No 267/2012 (OJ 2012 L 282, p. 16), in so far as they listed or maintained the listing, after review, of the applicant in Annex IX to Regulation No 267/2012,

composed of H. Kanninen, President, I. Pelikánová (Rapporteur) and E. Buttigieg, Judges,

having regard to the written procedure and further to the hearing on 10 December 2013,

1 The present case has been brought in connection with the restrictive measures introduced in order to apply pressure on the Islamic Republic of Iran to end its proliferation-sensitive nuclear activities and the development of nuclear weapon delivery systems (‘nuclear proliferation’).

3 On 9 June 2010 the United Nations Security Council adopted Resolution S/RES/1929 (2010), intended to widen the scope of the restrictive measures imposed by the earlier resolutions S/RES/1737 (2006) of 27 December 2006, S/RES/1747 (2007) of 24 March 2007 and S/RES/1803 (2008) of 3 March 2008, and to introduce additional restrictive measures against Iran.

4 On 17 June 2010 the European Council adopted a Declaration on Iran, in which it underlined its deepening concerns about Iran’s nuclear programme and welcomed the adoption of Resolution S/RES/1929 (2010). Recalling its declaration of 11 December 2009, the European Council, in particular, invited the Council of the European Union to adopt restrictive measures implementing those contained in Resolution S/RES/1929 (2010). In accordance with the declaration of the European Council, the restrictive measures were to be applied, in particular, to persons and entities other than those designated by the Security Council or by the committee set up pursuant to paragraph 18 of Resolution S/RES/1737 (2006), but using the same criteria as those applied by those bodies.

5 On 1 December 2011 the Council reiterated its serious and deepening concerns over the nature of Iran’s nuclear programme, and in particular over the findings on Iranian activities relating to the development of military nuclear technology, as reflected in the latest International Atomic Energy Agency (IAEA) report. In the light of those concerns, and in accordance with the European Council Declaration of 23 October 2011, the Council decided to broaden existing sanctions by examining, in close coordination with international partners, additional measures including measures aimed at severely affecting the Iranian financial system.

6 On 9 December 2011 the European Council endorsed the conclusions adopted by the Council on 1 December 2011 and invited the Council to proceed with its work relating to extending the scope of the European Union’s restrictive measures against Iran as a matter of priority.

7 By Council Decision 2012/35/CFSP of 23 January 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2012 L 19, p. 22), the applicant was included in the list 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).

8 Consequently, by Council Implementing Regulation (EU) No 54/2012 of 23 January 2012 implementing Regulation (EU) No 961/2010 on restrictive measures against Iran (OJ 2012 L 19, p. 1), the applicant was included in the list 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). That listing took effect on 24 January 2012. One result was the freezing of the applicant’s funds and financial resources (‘freezing of funds’).

9 The listing of the applicant in the abovementioned lists was based on the following ground:

10 By letter of 24 January 2012, received by the applicant on 6 February 2012, the Council informed the applicant of its inclusion in the lists in Annex II to Decision 2010/413, as amended by Decision 2012/35, and Annex VIII to Regulation No 961/2010, in the version amended by Implementing Regulation No 54/2012. Copies of Decision 2012/35 and Implementing Regulation No 54/2012 were enclosed with the letter.

11 On the adoption of 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), the listing of the applicant in Annex VIII to Regulation No 961/2010, in the version amended by Implementing Regulation No 54/2012, was revoked in order to be replaced by the applicant’s listing, for the same reasons as stated in paragraph 9 above, in Annex IX to Regulation No 267/2012 (the list in that annex, together with the list in Annex II to Decision 2010/413, as amended by Decision 2012/35; ‘the contested lists’), with effect from 24 March 2012.

12 By letter of 26 March 2012, the applicant denied any personal involvement in activities designed to circumvent the sanctions and, consequently, requested the Council to reconsider its listing in Annex II to Decision 2010/413, as amended by Decision 2012/35, and in Annex VIII to Regulation No 961/2010, in the version amended by Implementing Regulation No 54/2012. The applicant also asked to be provided with the evidence justifying its listing.

13 By letter of 2 August 2012, the Council informed the applicant that it intended to supplement the statement of reasons justifying the applicant’s inclusion in the contested lists, to include a reference to the fact that the applicant provided financial support to the Government of Iran, and that it thereby came within the scope of Article 20(c) of Decision 2010/413, as amended by Decision 2012/35, and of Article 23(2)(d) of Regulation No 267/12.

14 By letter of 7 October 2012, the applicant complained that the Council had failed to comply with its obligation to state reasons. The applicant denied any involvement in activities designed to circumvent the sanctions against Iran or to provide financial support to the Iranian Government for nuclear proliferation. Last, it again requested the Council to inform it of the evidence justifying its inclusion in the contested lists.

15 By Council Decision 2012/635/CFSP of 15 October 2012 amending Decision 2010/413 (OJ 2012 L 282, p. 58), the reasons for the applicant’s listing in Annex II to Decision 2010/413, as amended by Decision 2012/35, were supplemented as follows:

‘Involvement in activities to circumvent sanctions. Provides financial support to the Government of Iran.’

16 Consequently, by Council Implementing Regulation (EU) No 945/2012 of 15 October 2012 implementing Regulation No 267/2012 (OJ 2012 L 282, p. 16), the reasons for the applicant’s inclusion in the list in Annex IX to Regulation No 267/2012 were also supplemented as stated in paragraph 15 above.

17 By letter of 28 November 2012, the applicant again requested the Council to send it the evidence justifying its inclusion in the contested lists.

18 By letter of 10 December 2012, the Council informed the applicant that its inclusion in the contested lists was based on a proposal for its listing submitted by a Member State, which could not be identified on grounds of confidentiality. The content of that proposal, as set out in the Council’s cover note bearing reference 17576/12, enclosed with the letter of 10 December 2012, was worded as follows:

‘The activities of [the applicant] help to circumvent the international sanctions against Iran.

This measure [the restrictive measure imposed on the applicant] could substantially reinforce the diplomatic pressure currently being brought to bear on Iran.’

19 By application lodged at the Registry of the Court on 12 June 2012, the applicant brought this action, which was allocated to the Fourth Chamber of the Court by reason of other cases having the same subject-matter.

20 On 25 September 2012 the Council lodged a statement of defence, in which it submitted that the action was inadmissible.

21 On 20 December 2012 the applicant lodged a reply, to which it annexed a witness statement of its Vice Governor for Foreign Exchange Affairs, Ms R.

22 Owing to doubts as to the admissibility of the present action, the applicant decided, by application lodged by means of e-Curia at the Court Registry at 20.44 on 26 December 2012, to bring a further action for, in essence, annulment of Decision 2012/635 and Implementing Regulation No 945/2012, in so far as, after review, they maintained the applicant’s listing in the contested lists. That action was registered as Case T-563/12.

23 On the same day, at 21.19, the applicant lodged by means of e-Curia at the Court Registry a written pleading on the adaptation of its forms of order, so that they should also refer to the acts mentioned in paragraph 22 above. In that pleading, the applicant also asked the Court, if it should deem ‘[the] … application as amended [by the pleading amending the form of order sought] to be admissible in its entirety, … to join [the present action to Case T-563/12] or to treat [the two cases] as a single application for annulment’.

25 By document lodged on 21 March 2013, the Council submitted its comments on the adaptation of the forms of order sought in the action.

26 Since the composition of the Chambers of the Court was altered with effect from 23 September 2013, the Judge-Rapporteur was assigned to the First Chamber, to which the present case was therefore allocated.

27 Acting upon a report of the Judge-Rapporteur, the Court decided to open the oral procedure and, by way of measures of organisation of procedure under Article 64 of its Rules of Procedure, requested the parties to answer certain questions. The applicant and the Council complied with that request within the prescribed time-limit.

28 The applicant and the Council presented oral argument and answered the oral questions put to them by the Court at the hearing on 10 December 2013. At the hearing, the Council raised an objection that the action was inadmissible, based on new grounds of inadmissibility of the claims for annulment of (i) Decision 2012/635 in so far as it maintained the listing of the applicant in Annex II to Decision 2010/413 and (ii) Regulation No 267/2012 and Implementing Regulation No 945/2012 in so far as they listed or maintained the listing of the applicant in Annex IX to Regulation No 267/2012. The applicant was heard on the objection of inadmissibility and on the grounds of inadmissibility raised, for the first time, by the Council, but stated that it was not in a position to give a useful answer at the hearing. The objection of inadmissibility and the applicant’s observations were recorded in the minutes of the hearing.

29 By letter lodged at the Registry on 12 February 2014, the Council requested an modification of the minutes of the hearing in order to clarify the objection of inadmissibility raised at the hearing

31 Pursuant to Article 7(2) of the Instructions to the Registrar of the General Court, the President of the First Chamber of the Court decided to add the letter lodged on 12 February 2014 to the case file.

33 By decision of 11 April 2014, the President of the First Chamber of the Court granted the application made by the Council for the amendment of the minutes of the hearing.

34 Further, by way of measures of organisation of procedure under Article 64 of its Rules of Procedure, the Court invited the parties to respond to a further question on the inferences to be drawn, concerning possible lis pendens, from the time of validation registered in e-Curia concerning, respectively, the lodging of the written pleading on the adaptation of the form of order sought in this action and the lodging of the application in Case T-563/12 currently pending before the General Court.

35 The applicant and the Council complied with that request within the prescribed time-limit.

36 In the application and in the pleading amending the forms of order sought, the applicant claims, in essence, that the Court should:

- annul (i) Decision 2012/35 and Decision 2012/635, in so far as they listed the applicant or, after review, maintained its listing in Annex II to Decision 2010/413 and (ii) Regulation No 267/2012 and Implementing Regulation No 945/2012, in so far as they listed the applicant or, after review, maintained its listing in Annex IX to Regulation No 267/2012;

Whether the Court can raise of its own motion an objection of lis pendens in relation to the claims for the annulment of Decision 2012/635 and Implementing Regulation No 945/2012, in so far as those acts maintained, after review, the listing of the applicant in the contested lists

38 It must be recalled that the Courts of the European Union may, at any time, of their own motion, examine whether there exists any absolute bar to proceeding, including, according to the case-law, the conditions governing the admissibility of an action (see, to that effect, Case 6/60 Humblet v Belgium [1960] ECR 559, 570). Review by the Court is therefore not limited to grounds of inadmissibility raised by the parties (order in Case T-387/00 Comitato organizzatore del convegno internazionale v Commission [2002] ECR II-3031, paragraph 36).

39 According to settled case-law, an action brought subsequently to another which is between the same parties, is brought on the basis of the same submissions and seeks annulment of the same legal measure must be dismissed as being inadmissible on the ground of lis pendens (Case T-618/11 P De Nicola v EIB [2013] ECR, paragraph 98; see also, to that effect, Joined Cases 358/85 and 51/86 France v Parliament [1988] ECR 4821, paragraph 12).

40 The adaptation of forms of order effected by means of a document lodged at the Court Registry in the course of proceedings, in circumstances such as those of this case, constitutes a procedural step which, without prejudice to any subsequent decision of the Court on admissibility, is equivalent to the bringing of an action by means of an application (the order of 21 June 2012 in Case T-531/11 Hamas v Council, paragraph 16).

41 In this case, the claims for annulment contained in the written pleading on the adaptation of the forms of order (paragraph 23 above) and those contained in the application which initiated proceedings in Case T-563/12 (paragraph 22 above) are between the same parties, are brought on the basis of the same submissions and seek annulment of the same legal measures, namely Decision 2012/635 and Implementing Regulation No 945/2012, in so far as those measures maintained, after review, the listing of the applicant in the contested lists.

42 Contrary to what is claimed by the Council, which raised the objection of lis pendens against the action in Case T-563/12, it cannot be held that that action was brought subsequently to the lodging of the written pleading on the adaptation of the forms of order in this action. It is apparent, on the contrary, from the times of lodging stated in paragraphs 22 and 23 above that that written pleading was lodged after the action in Case T-563/12.

43 It must, further, be stated that, contrary to what is claimed by the applicant, any joinder of this case with Case T-563/12, under Article 50 of the Rules of Procedure, would not make it possible to resolve the lis pendens identified in this case, since it is clear from that provision that an order for joinder does not affect the independence and autonomy of the cases which it covers, since they may always be subsequently disjoined (Joined Cases C-280/99 P to C-282/99 P Moccia Irme and Others v Commission [2001] ECR I-4717, paragraph 66, and Case T-209/01 Honeywell v Commission [2005] ECR II-5527, paragraph 71).

44 It follows that the claims for annulment of Decision 2012/635 and Implementing Regulation No 945/2012, in so far as those measures maintained, after review, the listing of the applicant in the contested lists, must be rejected as being inadmissible, on the ground of lis pendens, by reason of the bringing of the action in Case T-563/12.

Whether the claims for annulment of Decision 2012/35, in so far as it listed the applicant in Annex II to Decision 2010/413, are out of time

45 The Council submits that the claim for annulment of Decision 2012/35, in so far as it listed the applicant in Annex II to Decision 2010/143, should be rejected as being inadmissible, since it is out of time.

46 The applicant claims that the action is admissible in its entirety, without expressly responding to the ground of inadmissibility raised by the Council that the action is, in part, out of time.

47 According to the case-law, the principle of effective judicial protection means that the European Union authority which adopts individual restrictive measures against a person or entity 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 that person or entity to exercise their right to bring an action (see, to that effect, Case C-548/09 P Bank Melli Iran v Council [2011] ECR I-11381, paragraph 47 and the case-law cited).

48 It follows that the period for bringing an action for the annulment of an act imposing restrictive measures on a person or entity begins to run only from the communication of that act to the party concerned (see, to that effect, Joined Cases C-478/11 P to C-482/11 P Gbagbo and Others v Council [2013] ECR, paragraphs 54 to 59).

49 In this case, it is not disputed that on 6 February 2012 the applicant received the Council’s letter of 24 January 2012, to which letter was annexed a copy of Decision 2012/35.

50 It follows that, since this action, in so far as it seeks the annulment of Decision 2012/35, was lodged at the Registry of the Court on 12 June 2012, that is, more than four months after receipt by the applicant of the Council’s letter of 24 January 2012, that action was submitted, in so far as it concerns that decision, after the expiry of the time for bringing proceedings laid down in the sixth paragraph of Article 263 TFEU and Article 102(2) of the Rules of Procedure.

51 Consequently, this action must be dismissed as being inadmissible to the extent that it seeks the annulment of Decision 2012/35, in so far as that decision listed the applicant in Annex II to Decision 2010/413.

The objection of inadmissibility and the grounds of inadmissibility raised by the Council, for the first time, at the hearing

52 The objection of inadmissibility raised against the action, by the Council, for the first time, at the hearing, is itself based on new grounds of inadmissibility raised against the claims for (i) the annulment of Decision 2012/635, in so far as it maintained the listing of the applicant in Annex II to Decision 2010/413, and (ii) the annulment of Regulation No 267/2012 and Implementing Regulation No 945/2012, in so far as they listed or maintained the listing of the applicant in Annex IX to Regulation No 267/2012. Those grounds of inadmissibility are based on the argument that, first, Regulation No 267/2012, to the extent that it concerns the applicant, is an act which is merely confirmatory of Implementing Regulation No 54/2012, in so far as the latter listed the applicant in Annex VIII to Regulation No 961/2010, and secondly, that the applicant cannot competently adapt its claims for annulment in relation to Decision 2012/635 and Implementing Regulation No 945/2012 if the claims for annulment of Decision 2012/35 and Regulation No 267/2012, as they appear in the application initiating proceedings, are themselves rejected as being inadmissible.

53 Without there being any need to answer the question whether the objection to the inadmissibility of the action and the new grounds of inadmissibility were raised too late to make it possible for the applicant properly to state a defence at the hearing (see paragraph 28 above), the Court must, in any event, hold that, in part, there is no longer any need to adjudicate on these matters and, for the remainder, that the objections must be rejected as being unfounded.

54 First, there is no longer any need to adjudicate on the grounds of inadmissibility based on the argument that the applicant cannot competently adapt its claims for the annulment of Decision 2012/635 and Implementing Regulation No 945/2012, since those claims have already been rejected as being inadmissible on the ground of lis pendens (see paragraph 44 above).

55 Secondly, there is no basis for the Council to claim that Regulation No 267/2012, to the extent that it concerns the applicant, is an act which is merely confirmatory of Implementing Regulation No 54/2012, in so far as the latter listed the applicant in Annex VIII to Regulation No 961/2010. What Regulation No 267/2012 did, to the extent that it concerns the applicant, was to revoke its listing in Annex VIII to Regulation No 961/2010 in order to replace it with a listing in Annex IX of Regulation No 267/2012, with effect from 24 March 2012. It follows that, after 24 March 2012, the fund freezing to which the applicant was subject was no longer based on its being listed in Annex VIII to Regulation No 961/2010, but solely on its being listed in Annex IX to Regulation No 267/2012, which thereby produced its own legal effects on the applicant. Accordingly, contrary to what is claimed by the Council, the mere fact that the latter listing is based on the same grounds as those which justified the applicant’s listing in Annex VIII to Regulation No 961/2010 does not allow the conclusion, in the particular circumstances of this case, that Regulation No 267/2012 is an act which is merely confirmatory of Regulation No 961/2010 and has no legal effect of its own on the applicant, and that the annulment of the former regulation cannot, for that reason, competently be sought by the applicant. Consequently, the ground of inadmissibility based on the argument that Regulation No 267/2012, to the extent that it concerns the applicant, is merely confirmatory, must be rejected.

56 Since the further grounds of non-admissibility raised by the Council do not make possible the rejection, as being inadmissible, of the claims for annulment of Regulation No 267/2012, in so far as it concerns the applicant, they cannot justify the Court upholding the objection of inadmissibility raised against the action as a whole, as contended by the Council at the hearing.

Whether the action is inadmissible in that all the pleas in law relied on in support of the action are based on the applicant’s invocation of protection and guarantees linked to fundamental rights

57 The Council contends that the action is inadmissible in that it relies on pleas which are all based on the applicant’s invocation of protection and guarantees linked with fundamental rights. In the Council’s submission, the applicant, as the central bank of Iran, is a governmental organisation which does not enjoy the protections and guarantees linked with fundamental rights which it invokes before the Court.

58 The applicant claims that the ground of inadmissibility raised by the Council should be rejected, on the ground that it has locus standi to enjoy the protection and guarantees linked with fundamental rights.

59 It must be observed that, contrary to what is contended by the Council, it is not the case that all the pleas in law relied on in support of this action are based on the applicant’s invocation of protection and guarantees linked with fundamental rights. The first plea in law, for example, is based on a claimed error of assessment. Consequently, this objection of inadmissibility is based on a premise which is factually incorrect.

60 Further, that objection is without any legal basis since, according to the case-law, the question whether the applicant qualifies for the right which it invokes in the second, third and fourth pleas in law does not concern the admissibility of those pleas in law and, consequently, of the action based on those pleas in law, but whether they are well founded (see, to that effect, Case T-13/11 Post Bank Iran v Council [2013] ECR, paragraph 54).

61 The objection that the action is inadmissible must therefore be rejected as being unfounded.

62 In the light of the foregoing, the Court must hold that this action is admissible solely to the extent that it seeks the annulment of Regulation No 267/2012, in so far as that regulation listed the applicant in Annex IX thereto (‘the contested act’).

63 The applicant formally puts forward four pleas in law in support of its claims for the annulment of the contested act. The first plea claims an error of assessment. The second plea claims a breach of the obligation to state reasons. The third plea claims a breach of the principle of respect for the rights of the defence and of the right to effective judicial protection. The fourth plea alleges breach of the principle of proportionality and breach of the applicant’s fundamental rights, notably the right to protection of property and respect for reputation.

64 It is necessary to examine the second plea, concerning breach of the obligation to state reasons, by considering, first, the general question of whether, contrary to what is contended by the Council, the applicant may rely on the protection and guarantees linked to fundamental rights which it invokes and, secondly, whether there can be specifically identified, in this case, a breach of the obligation to state reasons.

Whether the applicant may rely on protection and guarantees linked to fundamental rights

65 The Council contends that legal persons which constitute governmental organisations or State bodies cannot rely on protection and guarantees linked to fundamental rights. Since the applicant, as the central bank of Iran, is an Iranian governmental organisation or an Iranian State body, that rule is applicable to it.

66 The applicant contests the arguments submitted by the Council and claims that it does have standing to claim the benefit of protection and guarantees linked to fundamental rights.

67 Neither in the Charter of Fundamental Rights of the European Union nor in the Treaties are there any provisions which state that legal persons which are governmental organisations or State bodies are not entitled to the protection of fundamental rights. On the contrary, the provisions of the Charter which are relevant to the pleas raised by the applicant, and in particular Articles 17, 41 and 47, guarantee the rights of ‘[e]veryone’ or ‘[e]very person’, a form of wording which includes legal persons such as the applicant (see, to that effect, Joined Cases T-35/10 and T-7/11 Bank Melli Iran v Council [2013] ECR, paragraph 65).

68 The Council relies however, in this context, on Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (‘the ECHR’), signed at Rome on 4 November 1950, the effect of which is that the European Court of Human Rights may not accept applications submitted to it by governmental organisations.

69 However, for the reasons stated in paragraph 67 of Joined Cases T-35/10 and T-7/11 Bank Melli Iran v Council, paragraph 67 above, Article 34 of the ECHR, as interpreted by the European Court of Human Rights, is not applicable in this case. First, Article 34 of the ECHR is a procedural provision which is not applicable to procedures before the Courts of the European Union and, secondly, the reasoning underlying the case-law of the European Court of Human Rights, that the aim of that provision is to ensure that a State which is a party to the ECHR is not both applicant and defendant before that court, is not applicable in circumstances such as those of this case.

70 The Council also argues that the justification of the rule on which it relies is that a State is the guarantor of respect for fundamental rights in its territory but cannot qualify for such rights.

71 However, even if that justification were to be applicable in relation to an internal situation within a State, the fact that a State is the guarantor of respect for fundamental rights in its own territory is of no relevance as regards the extent of the rights to which legal persons which are emanations of that same State may be entitled in the territory of other States.

72 In the light of the foregoing, it must be held that EU law contains no rule preventing legal persons which are governmental organisations or State bodies from taking advantage of fundamental rights protection and guarantees. Those rights may therefore be relied on by those persons before the Courts of the European Union in so far as those rights are compatible with their status as legal persons (Joined Cases T-35/10 and T-7/11 Bank Melli Iran v Council, paragraph 67 above, paragraph 70).

73 It follows that the applicant may rely on the protection and guarantees linked to fundamental rights which it invokes, in particular, in its second plea in law.

74 The applicant maintains that the Council has not complied with the obligation arising under Article 296 TFEU, as interpreted in the case-law, to state the reasons on which the measures which it adopts are based. In the contested act, the Council did not clarify precisely which criterion, laid down in Article 23 of Regulation No 267/2012, was the basis for the applicant’s listing in Annex IX to that regulation. The claims that the applicant had an ‘involvement in activities to circumvent sanctions’ are vague and provide no clear indication of what exactly the allegations concerning the applicant are. They paraphrase the criterion laid down in Article 23(2)(b) of Regulation No 267/2012. In this case, the applicant claims that it did its best to challenge its listing in Annex IX to Regulation No 267/2012, albeit that it did not know the precise reasons for that listing. The reasons relied on are so vague and lacking in detail that the only possible response was in the form of a general denial, as in the letters of 26 March and 7 October 2012, or in the witness statement of Ms R. Those reasons therefore do not comply with the requirements of the case-law. In addition, the Council has failed to explain why it did not take account of the applicant’s sworn statements, which were subsequently confirmed by the witness statement of Ms R., that it had never been involved in nuclear proliferation or the circumvention of sanctions.

75 The Council disputes the applicant’s arguments and submits that the second plea in law should be rejected, on the ground that the reasons stated in the contested act enabled the applicant to understand the scope of the restrictive measure taken in respect of it and provided it with sufficient information properly to challenge that measure.

76 According to settled 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 Case C-417/11 P Council v Bamba [2012] ECR, paragraph 49 and the case-law cited).

77 The statement of reasons required by Article 296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the person concerned to ascertain the reasons for the measures and to enable the court having jurisdiction to exercise its power of review (see Council v Bamba, paragraph 76 above, paragraph 50 and the case-law cited).

78 As regards an act of the Council which imposes a fund freezing measure, the statement of reasons must identify the actual and specific reasons why the Council considers, in the exercise of its discretion, that that measure must be adopted in respect of the person concerned (Council v Bamba, paragraph 76 above, paragraph 52).

79 Article 46(3) of Regulation No 267/2012 also requires the Council to give individual and specific reasons for fund freezing measures adopted under Article 23(2) and (3) of that regulation and to communicate them to the persons, entities and bodies concerned (see, to that effect and by analogy, Case C-548/09 Bank Melli Iran v Council, paragraph 48). According to the case-law, the Council must, as a general rule, fulfil its obligation to state reasons, by means of an individual communication, mere publication in the Official Journal of the European Union not being sufficient (see, to that effect, Case T-383/11 Makhlouf v Council [2013] ECR, paragraphs 47 and 48; see also, to that effect and by analogy, Case C-548/09 Bank Melli Iran v Council, paragraph 52).

80 The statement of reasons required by Article 296 TFEU and by Article 46(3) of Regulation No 267/2012 must be adapted to the provisions under which the fund freezing measures were 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 Council v Bamba, paragraph 76 above, paragraph 53 and the case-law cited).

81 In particular, 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 (see Council v Bamba, paragraph 76 above, paragraph 54 and the case-law cited).

82 In this case, it is clear from the material in the file that the contested act was based on the following reasons: ‘Involvement in activities to circumvent sanctions’.

83 It is common ground, as is clear from paragraphs 27 and 28 of the statement of defence, that the Council did not communicate any other additional reason to the applicant before the date when this action was brought, 12 June 2012.

84 In paragraph 27 of its statement of defence, the Council expressly stated that ‘the fact referred to in the … statement of reasons [stated in paragraph 82 above] correspond[ed] to both of the … criteria [for listing referred to in paragraph 26 of the statement of defence]’, namely, on the one hand, the criterion of providing ‘support’ to nuclear proliferation, ‘as mentioned in Article 23(2)(a) of Regulation … No 267/2012’ and, on the other, that of ‘assisting’ a listed person, entity or body ‘to evade or violate restrictive measures’, ‘as mentioned in Article 23(2)(b) of Regulation … No 267/2012’. Thereafter, the Council did not relate that statement of reasons to any other criterion justifying the application of the fund freezing measures.

85 In that regard, it must be recalled that the criteria for the listing of a natural or legal person, entity or body in Annex IX to Regulation No 267/2012 are defined in Article 23(2) of that regulation, in the version in force at the material time. That provision defines a number of alternative listing criteria. Among those criteria, first, Article 23(2)(a) of Regulation No 267/2012 provides that all funds and economic resources of the persons, entities or bodies identified as being engaged in or directly providing support for nuclear proliferation, including through involvement in the procurement of prohibited goods and technology, are to be frozen. Secondly, Article 23(2)(b) of Regulation No 267/2012 provides that all funds of persons, entities or bodies identified as having assisted a listed person, entity or body to evade or violate the provisions of that regulation, Decision 2010/413 or United Nations Security Council resolutions are to be frozen.

86 In addition to indicating the legal basis of the measure adopted, the obligation to state reasons by which the Council is bound relates precisely to the circumstances which enable it to hold that one or other of the listing criteria is satisfied in the case of the parties concerned (see, to that effect, Case T-390/08 Bank Melli Iran v Council [2009] ECR II-3967, paragraph 83).

87 However, it must be recalled that failure to refer to a precise provision need not constitute an infringement of essential procedural requirements if the legal basis for a measure may be determined from other parts of the measure. However, such explicit reference is indispensable where, in its absence, the parties concerned and the Courts of the European Union are left uncertain as to the precise legal basis (Case 45/86 Commission v Council [1987] ECR 1493, paragraph 9).

88 Consequently, it is necessary to examine whether the statement of reasons in the contested act contains explicit references to the first and second criteria or, at least, to one or other of the two and whether, if that is the case, the statement of reasons may be regarded as sufficient to enable the applicant to determine whether the contested act is well founded and to state a defence before the Court, and to enable the Court to exercise its power of review.

89 The statement of reasons set out in paragraph 82 above does not expressly indicate to which of the listing criteria laid down in Article 23(2) of Regulation No 267/2012 it is related. Nonetheless, taking into account the reference to ‘activities to circumvent sanctions’, the statement of reasons in the contested act can readily be construed as referring to the second criterion, which rests precisely on the idea of providing ‘assistance’ to the circumvention of sanctions. On the other hand, in the absence of any reference to any provision by the applicant of ‘support’ to nuclear proliferation or to any ‘involvement’ on its part in the procurement of prohibited goods and technology, that statement of reasons cannot be related, as the Council contends, to the first criterion mentioned in paragraph 85 above. Further, where the Council observes, in paragraph 26 of the statement of defence, that the ‘support’ or ‘involvement’ of the applicant in nuclear proliferation or in the procurement of prohibited goods and technology is ‘necessarily’ a consequence of its ‘position as “banker to the Iranian Government”’, that is, in practice, a reference to factors which are not present in the statement of reasons in the contested act and which therefore cannot be taken into consideration as part of that statement of reasons, in accordance with settled case-law (see, to that effect, Case T-390/08 Bank Melli Iran v Council, paragraph 80 and the case-law cited).

90 In the light of the foregoing, it must be held that the statement of reasons in the contested act may only be taken into consideration as regards the second criterion, to which it implicitly but necessarily refers.

91 To the extent that the statement of reasons in the contested act is based on the second criterion mentioned in paragraph 85 above, it is however insufficient, in the sense that it does not enable either the applicant or the Court to understand the circumstances which led the Council to consider that the second criterion was satisfied in the case of the applicant and, accordingly, to adopt the contested act. That statement of reasons appears to be no more than a reproduction of the second criterion itself. It contains nothing in the form of specific reasons why that criterion is applicable to the applicant. That statement of reasons gives no details of the names of persons, entities or bodies, listed on a list imposing restrictive measures, whom the applicant assisted in circumventing sanctions or of when, where and how that assistance took place. The Council does not refer to any identifiable transaction, or to any particular assistance. In the absence of any other details, that statement of reasons is clearly insufficient to enable the applicant to determine, having regard to the second criterion, whether the contested act is well founded and to state a defence before the Court, and to enable the Court to exercise its power of review.

92 Consequently, the second plea in law, claiming a breach of the obligation to state reasons, must be upheld and, without there being any need to examine the other pleas or complaints raised by the applicant, the contested act must be annulled.

93 Under Article 87(3) of the Rules of Procedure, the Court may rule that costs are to be shared or that each party is to bear its own costs where each party succeeds on some and fails on other heads.

94 In the circumstances of this case, since Council and the applicant have each been partly unsuccessful, it is appropriate to decide that the Council shall bear one half of its own costs and pay one half of the applicant’s costs and the applicant shall bear one half of its own costs and pay one half of the Council’s costs.

1. Annuls 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), in so far as it listed Central Bank of Iran in Annex IX thereto;

3. Orders the Council of the European Union to bear one half of its own costs and to pay one half of the costs of Central Bank of Iran;

4. Orders Central Bank of Iran to bear one half of its own costs and to pay one half of the costs of the Council.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Central Bank of Iran v Council (Judgment) [2014] EUECJ T-262/12 (18 September 2014) URL: http://www.bailii.org/eu/cases/EUECJ/2014/T26212.html Cite as: ECLI:EU:T:2014:777, [2014] EUECJ T-262/12, EU:T:2014:777

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