IranCase law

Iranian banks blacklisted. EU sanctioned

(BRUSSELS2) A new Iranian bank has just been cleared by the Court of First Instance of the European Union (CFIEU). The judges considered that the inclusion of Bank Mellat on the European blacklist was neither motivated nor justified (judgment of January 29, 2013, T-496/10, download). A particularly severe judgment which could make it more difficult from now on to establish sanctions against Iran and lead to an appeal from the European entities which were at the origin of the decision (Council and Commission). Especially since it is part of a sequel. The court had already partially annulled certain measures taken against another Iranian bank, Sina Bank, finding in particular the motivation for the alleged acts " inadequate (judgment of 11 December 2012, T-15/11, download).

Facts

Banque Mellat – a state bank – was blacklisted in July 2010 with, as a result, the “freezing of funds and economic resources” in the territory of the European Union. The reason given by the Europeans against the bank was multiple:

  1. "behavior that supports and facilitates Iran's nuclear and ballistic missile programs".
  2. "provides banking services to entities listed by the UN and the EU, to entities acting on behalf of or on the instructions of them or to entities owned or controlled by them”.
    According to European services, the bank thus provides services to the AEOI (Iranian Atomic Energy Organization), Novin Energy Company. She " manages the accounts of senior officials of the Aerospace Industries Organization and an Iranian purchasing manager”. She would also have carried out a “movement of millions of dollars for Iran's nuclear program since at least 2003.
  3. “parent company of the First East Export (FEE) bank designated in Resolution 1929” of the United Nations Security Council (which draws up the sanctions list).

The Court agrees with the bank on several points

Faulty motivation

The Council has violated the obligation to state reasons as well as the obligation to communicate to the (Bank) the elements held against it on several points of his decision. In doing so, he also “violated the rights of the defense” Several of the charges are “ excessively vague ". Talk about " behavior "(1st fact), without specifying what is reproached, or speaking " of entities concerned » (2nd fact), without naming them, is not sufficient to justify the decision.

This lack of precision also marks other aspects of the decision: the “ senior officials "are also not" identified ". As for the movement of several millions, there is " no details on the entities and transactions concerned ". In fact for the court, there are only cases where an entity (AEOI, Novin, FEE) is specifically specified that the obligation to provide reasons is fulfilled. But there, the judges have other criticisms to make…

Lack of access to documents

The Council had communicated a proposal to adapt the measures (which did not add anything really new to the previous ones) very late, justifying this delay by the obligation to collect "theagreement of the Member State from which it originated ". A fallacious argument according to the judges. The Council is required to ensure, before the adoption of the measures, that the elements in question can be communicated to the entity concerned in good time so that the latter can effectively put forward its point of view”.

Copy and paste measures recommended by Member States

Sanctions cannot just be a “copy and paste” of measures recommended by a Member State. The Council is “ required to consider the relevance and merits of the information and evidence submitted to it. by a Member State or by the High Representative of the Union. In this case, the court finds that there is fault. There is no no indication suggesting that the Council verified the relevance and the merits of the elements ". On the contrary, even! Indication "erroneous », that Mellat is a state bank, — « inaccuracy not contested by the Council "-" tends to establish that no verification in this sense has taken place ».

No proof of “nuclear” involvement for a subsidiary

If the bank Mellat indeed owns FEE at 100%, the reason given in the United Nations resolution - " allowing Iranian entities associated with the nuclear weapons, missile and defense program to carry out transactions worth several hundred million dollars (in the past) seven years “, is too “imprecise” and “ based on mere allegations » to justify a sanction. In doing so, the judges believe that the Council must clarify the reasons provided by the United Nations Security Council when these are too imprecise. Here again, the court is not satisfied with a “copy and paste”.

No factual information for a client

Public chat AEOI, the bank disputes having provided services to AEOI. Gold, " the Council has produced no evidence or information to establish that such services were provided. ". The judges thus retain a burden of proof exclusively on the Council. In the absence of proof, the sanction falls.

Duty of care fulfilled for another

The only element where there is trace of movement is Novin. But there are elements which plead in favor of the bank, underline the judges. The legal context is however fixed: a banking establishment located outside the Union “ is not obliged (according to European regulations), to freeze the funds of entities involved in nuclear proliferation ". He simply has an interest in stop providing financial services (to covered entities), this “ without delay », if it wants to avoid its activities being frozen on European territory.

This duty of care is, however, appreciated “ taking into account the applicable legal obligations ". In this case, Iranian law ". The court finds that this is the case. The bank " immediately issued an internal circular asking its employees to inform Novin that it could no longer provide services to it. Subsequently, no new service would have been provided and no new instruction would have been accepted. » It "would have confined itself to making, from Novin's accounts, payments resulting from instructions, checks and promissory notes drawn up before the date (sanctions)” and unrelated “ with nuclear proliferation or the acquisition of goods in general". Once " the balance of the accounts depleted as a result of the payments made, they would have been closed by the applicant. Any residual balances, of small importance, would have been returned to Novin. The European regulation authorizes, in fact, the release of the funds of the entities “to make payments under obligations entered into by them previously” their blacklisting.

As a result, the court considers that the bank has done what is necessary in accordance with European and international law. And its inclusion on the list… is no longer justified.

Two fundamental notions

In passing, the court ruled on two more general questions of law

The fundamental rights claimed by States

The judges also answered a question of principle – invoked moreover as a preliminary question of admissibility. Can third States or legal entities arising from them invoke the protections and guarantees linked to fundamental rights? The Council and the Commission maintained that no, relying on the fact that “a State is guarantor of respect for fundamental rights on its territory but cannot benefit from such rights, and on the procedure before the European Court of Human Rights”.

The judges invalidated this argument. " Union law does not contain any rule preventing legal persons which are emanations of third States from invoking for their benefit the protections and guarantees linked to fundamental rights. These same rights can therefore be invoked before the judge of the Union provided that they are compatible with their status as a legal person”.

Moreover, the fact that the bank is " an emanation of the Iranian State due to the latter's participation in its capital " it's not enough. Firstly, " the stake in question is only a minority one » ; on the other hand, " it does not imply, in itself, that the applicant participates in the exercise of public power or manages a public service”.

Wikileaks cables

The Iranian bank cited in its support diplomatic cables revealed by Wikileaks reporting pressure that the United Kingdom had suffered in particular from the USA. The Court recognized that they could validly be invoked, without recognizing their accuracy (" assuming it is established "). Because, for him, the circumstance of possible diplomatic pressure “ does not in itself imply that those same pressures affected the contested acts ».

Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).

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