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Court Struck Down EU Sanctions On Iran

Nuclear deal

The European Union?s second-highest court struck down sanctions Thursday on a leading Iranian bank and a string of Iranian shipping companies, although judges gave the EU more than two months to respond before the decisions take effect.

The latest legal setback for the EU?s sanctions regime involves the lifting of an asset freeze and restrictions on Bank Tejarat, with the court saying the evidence presented by the EU to support its decision was insufficient. The shipping firms affected were subsidiaries of the Islamic Republic of Iran Shipping Lines, or IRISL.


Western officials are concerned that such legal setbacks for the EU could jeopardize the effectiveness of economic pressure on governments in Iran, Syria and Russia.

However, in almost every case the EU has so far lost, the bloc has reimposed sanctions on the firms citing new grounds?or has appealed the decisions. That has, so far, limited the real impact of the decisions.

Bank Tejarat was placed on the sanctions list in 2012 by the EU and the U.S., which said the firm was providing financial services to other blacklisted banks and was facilitating Iran?s nuclear program. At the time, the U.S. Treasury said Bank Tejarat had 2,000 branches in Iran and foreign branches in Frances, Tajikistan and Belarus.

The court ruled Thursday that the EU had failed to detail what it says was confidential evidence of the bank?s activities. EU member states have repeatedly refrained from detailing what is sometimes sensitive intelligence information, because the court?s rules mean the evidence must be shared with the lawyers challenging the sanctions.

EU member states are considering changes to those rules, proposed by the court, which would allow some evidence to be presented confidentially.

The court also said the fact that the bank is now only minority-owned by the Iranian government didn?t automatically make it a legitimate target for sanctions.

The court gave the EU two months and 10 days to relist the firm, or to appeal the decision. There was no immediate comment from the European Council, the body representing EU member states which makes sanctions decisions.

The General Court also ruled Thursday that sanctions should be lifted on various IRISL subsidiaries, including IRISL Maritime Training Institute, Kish Shipping Line Manning Co. and IRISL Multimodal Transport Co.

The court accepted the firms? argument that since it had struck down sanctions against IRISL, the subsidiaries should also be delisted.

The court gave the EU two months and 10 days to relist the firms or challenge the decision. The EU has already placed IRISL back on its sanctions list, citing new legal grounds.

Iran is currently in negotiations with the U.S., Russia, China and three EU member states on a comprehensive nuclear deal, which would gradually ease sanctions in exchange for clear assurances that Tehran cannot quickly assemble enough material to make a nuclear weapon. Those talks, already extended twice, are due to conclude on June 30.



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