In four judgments delivered on 3 July, the General Court of the EU (the “General Court”) annulled the listings of three entities and one individual designated pursuant to the EU Iranian sanctions regime, and one individual listed under the EU’s Syrian regime.  In each case, the court ruled that there was a lack of evidence to support the reasons for designation.

These judgments are discussed in greater detail below.

1.     Iranian University

On 3 July, the General Court annulled the listing of the Iranian university Sharif University of Technology in Case T-181/13 Sharif University of Technology v Council.  The university is located in Tehran and specialises in the fields of technology, engineering and the physical sciences.

Sanctions were imposed by the EU on the university pursuant to Council Regulation (EU) No. 267/2012, as amended by Council Implementing Regulation (EU) No. 1264/2012, for allegedly providing laboratories for use by the UN-designated Iranian entity Kalaye Electric, and the EU- designated entity Iran Centrifuge Technology Company. The Regulation prohibits contributions made in support of Iranian nuclear proliferation.

The General Court held that the European Council had committed a manifest error of assessment as the material available to the General Court contained “no evidence capable of supporting the Council’s claims that the applicant assisted the [UN and EU-designated entities] to violate the provisions of the EU legislation concerning restrictive measures against the Islamic Republic of Iran, or provided direct support to Iranian nuclear activities”.

However, the General Court’s judgment will not come into effect until the expiry of a two-month period to give the Council the opportunity to correct the irregularities identified in the judgment, namely by providing sufficient evidence to support the reasons for the university’s listing.

General Court Press Release

Council Implementing Regulation (EU) No. 1264/2012

Council Regulation (EU) No. 267/2012

2.     Iranian Tanker Company

On 3 July, the General Court annulled the listing of the National Iranian Tanker Company (“NITC”) in Case T-565/12 National Iranian Tanker Company v Council.  NITC is an Iranian transporter of crude oil and gas, operating one of the world’s largest fleets of double-hulled tankers.

NITC was listed pursuant to Council Regulation (EU) No. 267/2012, as amended by Council Implementing Regulation (EU) No. 945/2012, for two reasons: (i) the Council claimed NITC was effectively controlled by the Iranian government; and (ii) NITC was said to have provided financial support to the Iranian government through shareholders who maintain ties with the government. NITC sought an annulment of its listing, contesting both allegations.

The General Court held that the Council had committed a manifest error of assessment as the material taken into consideration by the General Court contained no evidence capable of supporting the Council’s two claims.

However, the General Court’s judgment will not come into effect until the expiry of the period for bringing an appeal to give the Council the opportunity to correct the irregularities identified in the judgment, namely by providing sufficient evidence to support the reasons for NITC’s listing.

Case T-565/12 National Iranian Tanker Company v Council

Council Implementing Regulation (EU) No. 945/2012

Council Regulation (EU) No. 267/2012

3.     Iranian Bank and Businessman

On 3 July, in two separate cases, the General Court annulled the listings of Iranian bank Sorinet Commercial Trust Bankers Ltd (“SCT”) and Iranian businessman Babak Zanjani, an SCT director, both designated in 2012 pursuant to Council Regulation (EU) No. 267/2012, as amended by Council Implementing Regulation (EU) No. 1264/2012.

Zanjani and SCT were listed for allegedly assisting designated entities to violate the provisions of the Regulation and for providing financial support to the Iranian government. The Council alleged that SCT, part of the UAE-based Sorinet Group, which is owned and operated by Zanjani, was used to channel Iranian oil-related payments.  The Council claimed Zanjani was a key facilitator for Iranian oil deals and transferring oil-related money.

The General Court held, in both cases, that the Council had committed an error of assessment as the material available to the Court contained no evidence that the applicants were assisting designated entities to violate the EU Iranian sanctions regime, or that they were providing financial and technical assistance to the Iranian government.

However, the General Court’s judgments will not come into effect until the expiry of the period for bringing an appeal to give the Council the opportunity to correct the irregularities identified in the judgments, namely by providing sufficient evidence to support the reasons for listing.

Case T-157/13 Sorinet Commercial Trust Bankers Ltd v Council

Case T-155/13 Babak Zanjani v Council

Council Implementing Regulation (EU) No. 1264/2012

Council Regulation (EU) No. 267/2012

4.     Former Syrian Minister

On 3 July, the General Court annulled the listing of Syria’s former Minister of Economy and Trade, Mohamad Nedal Alchaar, who was listed pursuant to Council Regulation (EU) No. 36/2012, as amended by Council Implementing Regulation (EU) No. 363/2013, concerning restrictive measures in view of the situation in Syria.

Mr Alchaar was originally listed for being, as Syria’s Minister of Economy and Trade, directly linked to the Assad regime.  After Mr Alchaar resigned from office in June 2012, the Council altered the reasons for his listing to read as follows: “Former Minister of Economy and Trade. Associated with the Syrian regime and its violent repressions against the civilian population.”

The General Court held that Mr Alchaar’s listing on the grounds of his ministerial office had been legitimate as the Council was entitled to presume, without adducing additional evidence of personal involvement, that all members of a government must be jointly and severally responsible for the policy of repression pursued by their government.

However, the General Court also held that a presumption of continued close links to the Assad regime after Alchaar left office, while permissible, was rebuttable.  Accordingly, as the existence of such links had been contested by Mr Alchaar, the Council had to adduce additional evidence of sufficient probative value to establish the validity of the presumption.  The Council failed to provide such evidence. As a result, the General Court found that it had committed an error of assessment by considering that Mr Alchaar’s listing was justified solely by reason of his status as a former minister.

The General Court annulled Mr Alchaar’s designation and the asset freeze and travel ban no longer apply. The European Council now has two months to appeal the judgment.

Case T-203/12 Mohamad Nedal Alchaar v Council (French)

General Court Press Release

Council Regulation (EU) No. 36/2012