On 22 January, the General Court annulled in two separate cases the designation of entities in the EU’s sanctions list on Iran. The first case involved 35 entities implicated as subsidiaries or affiliates of the Islamic Republic of Iran Shipping Lines (collectively, the “IRISL Entities”), which has been implicated in Iran’s nuclear and ballistic missile programmes. The second case involved Bank Tejarat, a commercial bank partly owned by the Iranian state, which was allegedly directly involved in facilitating Iran’s nuclear efforts by providing financial assistance to designated entities.

In respect of the IRISL Entities, the General Court held that, at the time of their designation, IRISL was not validly identified as providing support for nuclear proliferation.  Therefore, their designation could not be maintained on the sole basis of their association with IRISL.  The subsequent re-designation of IRISL did not have retroactive effect and could not remedy the absence of sufficient justification at the time of the IRISL Entities’ designation.

In respect of Bank Tejarat, the General Court held that the Council had failed to prove the bank’s involvement in nuclear activities to the required legal standard. In particular, it held that the Council failed to show that Bank Tejarat provided financial or other services to entities and individuals subject to restrictive measures. Moreover, following its partial privatisation in 2009, Bank Tejarat was no longer majority owned by the Iranian state. In the absence of additional arguments, the Court held that the bank’s shareholder composition could not justify the conclusion that it provided support to nuclear proliferation or aided designated entities to avoid restrictive measures.

The effect of these annulments has been stayed for two months and 10 days or for the duration of any appeal that may be brought. This period allows the Council (should it so decide) to re-designate the IRISL Entities and/or Bank Tejarat in a manner compliant with the requirements of EU case law.

Joined Cases T‑420/11 and T‑56/12 Ocean Capital Administration GmbH & Ors v Council [2015]

Case T‑176/12 Bank Tejarat v Council [2015]