On 5 March 2015 the CJEU handed down its judgment in EIH v Council. This was an appeal brought by Europäisch-Iranische Handelsbank (EIH) against the General Court's refusal to remove it from the list of sanctions against Iran. The CJEU rejected the appeal.
EIH had been listed on grounds of assisting Iranian banks with alternative options for completing transactions disrupted by EU sanctions, and had its assets frozen.
The most interesting part of the judgment concerns the validity of general licences in the context of exceptions to sanctions, and highlights the need to exercise caution in relying on such licences in circumstances where the relevant legal instruments mandate obtaining specific licences before engaging in otherwise prohibited acts.
The main findings of the CJEU were as follows:
- EIH admitted that it had carried out transactions with listed entities (Iranian banks), but argued that they were lawful as they had been authorised by the Bundesbank (German central bank).
- However, the General Court had been correct to find that in the absence of authorisations granted on a case-by-case basis, a blanket approval from the Bundesbank that did not distinguish the nature of the precise transactions and the designated entities concerned was insufficient. Moreover, except for one call that took place after the applicant had been entered on the lists, the communications containing approval predated the transactions by either one or two years. EIH knew that the transactions it was carrying out concerned listed entities, and that those transactions were therefore particularly suspect, as they made it possible to circumvent the freezing of those entities’ funds.
- The applicant's legitimate expectations had therefore not been infringed. The wording of the legislation concerned was clear that the transactions in question were subject to a regime of release and authorisation on a case-by-case basis. The legislation had been adopted against a background of growing suspicion and increased controls of financial transactions. As a bank specialising in Iran-related services, EIH must have known that the transactions concerned listed entities and were therefore particularly suspect.
- Even on the assumption that the general approvals granted by the Bundesbank were capable of forming the basis of a legitimate expectation on the part of the appellant, such an expectation could not render lawful transactions that were expressly prohibited by the relevant legislation.