Bank Saderat v Council (Non-contractual liability - Common foreign and security policy - Restrictive measures against Iran - Judgment) [2019] EUECJ T-433/15 (05 June 2019)

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(Non-contractual liability — Common foreign and security policy — Restrictive measures against Iran — Freezing of funds — Restriction on admission to the territory of the Member States — Compensation for the damage allegedly sustained by the applicant following its inclusion and re-inclusion in the list of persons and entities subject to the restrictive measures at issue — Sufficiently serious breach of a rule of law conferring rights on individuals)

Bank Saderat plc, established in London (United Kingdom), represented by S. Jeffrey, S. Ashley, A. Irvine, Solicitors, M. Demetriou QC, and R. Blakeley, Barrister,

Council of the European Union, represented initially by M. Bishop and N. Rouam, and subsequently by M. Bishop and H. Marcos Fraile, acting as Agents,

European Commission, represented initially by M. Konstantinidis and D. Gauci, and subsequently by M. Konstantinidis, A. Tizzano and C. Zadra, acting as Agents,

APPLICATION based on Article 268 TFEU for compensation for the damage allegedly sustained by the applicant as a result of the inclusion of its name on the list of designated persons and entities in Council Regulation (EC) No 423/2007 of 19 April 2007 concerning restrictive measures against Iran (OJ 2007 L 103, p. 1), Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran and repealing Regulation No 423/2007 (OJ 2010 L 281, p. 1), and Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation No 961/2010 (OJ 2012 L 88, p. 1),

composed of M. Prek, President, F. Schalin (Rapporteur) and M.J. Costeira, Judges,

having regard to the written part of the procedure and further to the hearing on 10 December 2018,

1 The present case is part of a series of connected cases concerning the restrictive measures adopted under EU law against persons or entities allegedly linked to the proliferation-sensitive nuclear activities of the Islamic Republic of Iran or to the development of nuclear weapon delivery systems by the Islamic Republic of Iran (‘nuclear proliferation’).

2 The applicant, Bank Saderat plc, is a public limited company incorporated and having its registered office in the United Kingdom, authorised by the United Kingdom’s Prudential Regulation Authority and regulated by that authority and the United Kingdom’s Financial Conduct Authority.

3 The applicant is wholly owned by Bank Saderat Iran (‘BSI’), an Iranian bank.

4 On 26 July 2010, BSI and the applicant were included in the list of entities involved in nuclear proliferation which appears in Annex II to Council Decision 2010/413/CFSP of 26 July 2010 concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP (OJ 2010 L 195, p. 39).

5 Consequently, BSI and the applicant were included in the list in Annex V to Council Regulation (EC) No 423/2007 of 19 April 2007 concerning restrictive measures against Iran (OJ 2007 L 103, p. 1), by Council implementing Regulation (EU) No 668/2010 of 26 July 2010 implementing Article 7(2) of Regulation No 423/2007 (OJ 2010 L 195, p. 25). That listing resulted in the freezing of the applicant’s funds and economic resources.

6 In Decision 2010/413, the Council of the European Union relied upon the following reasons with regard to BSI:

‘Bank Saderat is an Iranian State-owned bank (94% [owned by the Iranian] government). Bank Saderat has provided financial services for entities procuring on behalf of Iran’s nuclear and ballistic missile programmes, including entities designated under [United Nations Security Council Resolution] 1737. Bank Saderat handled [the Defense Industries Organisation (DIO)] (sanctioned in [United Nations Security Council Resolution] 1737) and Iran Electronics Industries payments and letters of credit as recently as March 2009. In 2003, Bank Saderat handled letter[s] of credit on behalf of [the Iranian] nuclear-related Mesbah Energy Company (subsequently sanctioned in [United Nations Security Council Resolution] 1737).’

7 The reasons relied upon in Implementing Regulation No 668/2010 with regard to BSI are the same as those relied upon in Decision 2010/413.

8 In both Decision 2010/413 and Implementing Regulation No 668/2010, the applicant was identified as being ‘100% owned’ by BSI.

9 The applicant’s designation was then maintained, with no changes to the reasons given, under a series of additional legal acts, notably Council Decision 2010/644/CFSP of 25 October 2010 amending Decision 2010/413 (OJ 2010 L 281, p. 81), Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran and repealing Regulation (EC) No 423/2007 (OJ 2010 L 281, p. 1), Council Decision 2011/783/CFSP of 1 December 2011 amending Decision 2010/413 (OJ 2011 L 319, p. 71), and Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2010 (OJ 2012 L 88, p. 1).

10 BSI’s designation was also continued under Decision 2010/644. The reasons relied upon with regard to BSI are as follows:

‘Bank Saderat is an Iranian bank partly owned by the Iranian government. Bank Saderat has provided financial services for entities procuring on behalf of Iran’s nuclear and ballistic missile programmes, including entities designated under [United Nations Security Council Resolution] 1737. Bank Saderat handled DIO (sanctioned in [United Nations Security Council Resolution] 1737) and Iran Electronics Industries payments and letters of credit as recently as March 2009. In 2003 Bank Saderat handled letter[s] of credit on behalf of Iranian nuclear-related Mesbah Energy Company (subsequently sanctioned in [United Nations Security Council Resolution] 1737).

11 Those reasons were, in essence, repeated in Regulation No 961/2010 and subsequently in Regulation No 267/2012.

12 Both BSI and the applicant challenged their designation and sought to have it annulled, in cases registered under references T‑495/10 (Bank Saderat v Council) and T‑494/10 (Bank Saderat Iran v Council).

13 By judgment of 5 February 2013, Bank Saderat Iran v Council (T‑494/10, EU:T:2013:59), the Court annulled the acts designating BSI as an entity involved in nuclear proliferation, on the ground that that designation had not been substantiated by evidence. The appeal brought by the Council was dismissed by judgment of 21 April 2016, Council v Bank Saderat Iran (C‑200/13 P, EU:C:2016:284).

14 By judgment of 20 March 2013, Bank Saderat v Council (T‑495/10, not published, EU:T:2013:142), the Court annulled the lists at issue, in so far as they related to the applicant. No appeal was brought against that judgment.

15 By application lodged at the Court Registry on 27 July 2015, the applicant brought the present action.

17 By document lodged at the Court Registry on 9 November 2015, the European Commission sought leave to intervene in the present proceedings in support of the form of order sought by the Council.

18 On 4 December and 9 December 2015 respectively, the Council and the applicant lodged their observations on the Commission’s application for leave to intervene.

19 By decision of the President of the First Chamber of the Court of 10 December 2015, the Commission was granted leave to intervene in the present case.

20 By decision of the President of the First Chamber of the Court of 19 January 2016, proceedings in the present case were stayed until the judgment of the Court of Justice was delivered in Council v Bank Saderat Iran, registered under number C‑200/13 P.

21 The judgment Council v Bank Saderat Iran (C‑200/13 P, EU:C:2016:284) having been delivered on 21 April 2016, proceedings in the present case were resumed.

23 On 6 July and 27 July 2016 respectively, the applicant lodged its reply and its observations on the Commission’s statement in intervention.

24 By decision of the President of the First Chamber of the Court of 5 October 2016, proceedings in the present case were stayed until the judgment of the Court of Justice was delivered in Safa Nicu Sepahan v Council, registered under number C‑45/15 P. The judgment in Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402) having been delivered on 30 May 2017, proceedings in the present case were resumed.

26 By letter of 7 August 2017, the applicant requested that a hearing be held and that measures of inquiry be taken with a view to having an independent expert appointed to examine the evidence which it submitted with regard to the extent of the losses it claimed to have sustained as a result of its inclusion on the list of designated persons and entities.

27 By letters of 12 September and 27 September 2017 respectively, the Council and the Commission lodged their observations on the request for measures of inquiry.

28 On 28 February 2018, the Court decided to seek the parties’ observations on the implications for the present action of the judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402). The Commission complied with that request on 14 March 2018 and the applicant and the Council did so on 15 March 2018.

29 On 8 May 2018, the applicant lodged its observations on the Council’s response to the question raised by the Court on 28 February 2018.

30 By decision of the President of the Court of 5 June 2018, the present case was assigned to a new Judge-Rapporteur, sitting in the Second Chamber.

31 On a proposal from the Judge-Rapporteur, the Court decided to open the oral part of the procedure.

32 The parties presented oral argument and answered questions put to them by the Court at the hearing on 10 December 2018, during which the applicant stated, in answer to a question from the Court in that regard, that the present action for damages was based on acts implementing Common Foreign and Security Policy (CFSP) decisions and not directly on CFSP decisions. The Court also asked the applicant for clarification regarding some of its heads of claim and requested it to produce an update of the amounts claimed.

33 By letter lodged at the Court Registry on 7 January 2019, the applicant complied with that request.

– EUR 88 906 191 in respect of material damage up until the date of the present claim;

– EUR 21 787 819 in respect of interest on the sum in the preceding sub-indent as at 7 January 2019 plus daily interest of EUR 10 377 from 8 January 2019 until the date of judgment, in the alternative at the European Central Bank (ECB) main refinancing rate plus 2% per annum from 8 January 2019 until the date of judgment, and in the further alternative at such rate and for such period as the Court thinks fit;

– EUR 14 609 275 in respect of material damage from the date of the present claim until the end of the claim period (being up to and including 19 April 2016);

– Interest on the total sum calculated pursuant to the preceding sub-indent being EUR 2 148 438 as at 7 January 2019 plus daily interest of EUR 1 705 from 8 January 2019 until the date of judgment, in the alternative at the ECB main refinancing rate plus 2% per annum from 8 January 2019 until the date of judgment, and in the further alternative at such rate and for such period as the Court thinks fit;

– post-judgment interest on the sums in the sub-indents above at the rate of 4.2601% per annum until the date of the present judgment, in the alternative at the ECB main refinancing rate plus 2% per annum until the date of the present judgment, and in the further alternative at such rate and for such period as the Court thinks fit;

38 The applicant submits that the adoption of the restrictive measures at issue caused it both material and non-material damage, for which it seeks compensation.

39 The Council, supported by the Commission, disputes the applicant’s arguments.

40 In order for the European Union to incur non-contractual liability under the second paragraph of Article 340 TFEU for unlawful conduct of its institutions or bodies, a number of conditions must be satisfied: the conduct of the EU institution or body must be unlawful, actual damage must have been sustained and there must be a causal link between the conduct complained of and the damage pleaded (see judgment of 25 November 2014, Safa Nicu Sepahan v Council, T‑384/11, EU:T:2014:986, paragraph 47 and the case-law cited).

41 The cumulative nature of those three conditions governing the establishment of non-contractual liability means that, if one of them is not satisfied, the action for damages must be dismissed in its entirety, and there is no need to examine the other conditions (see judgment of 25 November 2014, Safa Nicu Sepahan v Council, T‑384/11, EU:T:2014:986, paragraph 48 and the case-law cited).

42 The applicant submits that the condition relating to the unlawful conduct on the part of an institution is satisfied, since the adoption of the acts including the applicant’s name in the list of designated persons and entities amounts to a sufficiently serious breach by the Council of a rule of law intended to confer rights on individuals in order for the European Union to incur non-contractual liability in accordance with the case-law.

43 In that regard, the applicant notes that its name was included on the list of entities involved in nuclear proliferation on the sole ground that it was a subsidiary of BSI. Given that BSI’s designation was unlawful, as the Court held in the judgment of 5 February 2013, Bank Saderat Iran v Council (T‑494/10, EU:T:2013:59), confirmed on appeal, the applicant submits that its designation which derives from that of BSI manifestly lacked any legal basis. In addition, the adoption of the acts at issue infringes a rule of law intended to confer rights upon individuals, namely the right not to be subject to unlawful sanctions adopted without any supporting evidence.

44 According to the applicant, which refers to the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:20l4:986, paragraphs 57 and 58), the Council’s decision to enter or maintain a person’s name in the list of designated persons and entities, although it does not have any information or evidence which substantiates the restrictive measures at issue to the requisite legal standard, constitutes a sufficiently serious breach of the provisions at issue.

45 The applicant further submits that the Council cannot contend that the provisions which it infringed were vague, ambiguous or unclear because, when the acts at issue were adopted, it was clear that the Council had to provide evidence supporting the restrictive measures which it adopted.

46 The Council maintains that, even though it must acknowledge, following the judgment of 21 April 2016, Council v Bank Saderat Iran (C‑200/13 P, EU:C:2016:284), that it made an error of assessment concerning the interpretation and application of the relevant listing criterion with regard to BSI and hence also to the applicant as a subsidiary of the latter, this error did not constitute a sufficiently serious breach of a rule of law as to engage the non-contractual liability of the European Union.

47 According to the Council, until the Court of Justice delivered the judgment of 21 April 2016, Council v Bank Saderat Iran (C‑200/13 P, EU:C:2016:284), there was no definitive case-law to the effect that the provision by an Iranian bank of financial services, such as the handling of letters of credit, to entities which were already designated by the United Nations and/or the European Union did not qualify by itself as providing support for nuclear proliferation. The cases which gave rise to the judgments of 6 September 20l3, Bank Melli Iran v Council (T‑35/l0 and T‑7/11, EU:T:20l3:397), and of 16 September 20l3, Bank Kargoshaei and Others v Council (T‑8/11, not published, EU:T:20l3:470) suggested the contrary. As the case-law was not definitively settled on this point before the judgment of 21 April 2016, Council v Bank Saderat Iran (C‑200/13 P, EU:C:2016:284), the Council considers that it still had a margin of discretion in that regard during the period before that judgment was delivered.

48 According to settled case-law, a finding that a legal act of the European Union is illegal, made for example in the context of an action for annulment, regrettable as it may be, is not a sufficient basis for holding that the non-contractual liability of the Union, flowing from illegal conduct on the part of one of its institutions, has automatically arisen. In order for that condition to be met, the case-law requires the applicant to demonstrate that the institution in question has not merely infringed a rule of law, but that the infringement is sufficiently serious and that the rule of law was intended to confer rights on individuals (see judgment of 4 July 2000, Bergaderm and Goupil v Commission, C‑352/98 P, EU:C:2000:361, paragraph 42 and the case-law cited).

49 Furthermore, the requirement for proof of a sufficiently serious breach is intended to avoid, in the field inter alia of restrictive measures, the institution concerned being obstructed in the exercise of the functions which it is responsible for carrying out, in the general interest of the European Union and its Member States, by the risk of ultimately having to bear losses which the persons concerned by its acts might potentially suffer, without however leaving those individuals to bear the consequences, be they financial or non-material, of flagrant and inexcusable misconduct on the part of the institution concerned (see, to that effect, judgments of 11 July 2007, Schneider Electric v Commission, T‑351/03, EU:T:2007:212, paragraph 125; of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 34; and of 25 November 2014, Safa Nicu Sepahan v Council, T‑384/11, EU:T:2014:986, paragraph 51).

50 According to the case-law, the wider objective of maintaining peace and international security, in accordance with the objectives of the Union’s external action stated in Article 21 TEU, is such as to justify negative consequences for economic operators — even significant negative consequences — arising from decisions implementing acts adopted by the European Union with a view to achieving that fundamental objective (see, by analogy, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 150 and the case-law cited).

51 Thus, in assessing the conduct of the institution concerned, the Court, hearing an action for damages brought by an economic operator, is also required, having regard in particular to Article 215(2) TFEU, to take account of that fundamental objective of the CFSP, except where the operator is able to establish that the Council failed to comply with its mandatory obligations in a flagrant or inexcusable manner, or that it infringed, again in a flagrant or inexcusable manner, a fundamental right recognised by the European Union (judgment of 13 December 2017, HTTS v Council, T‑692/15, under appeal, EU:T:2017:890, paragraph 46).

52 The fact that one or more of the acts of the Council giving rise to the losses claimed by an applicant may have been annulled, even by a judgment of the General Court delivered before the action for damages had been brought, is not irrefutable evidence of a sufficiently serious breach on the part of that institution, giving rise ipso jure to liability on the part of the European Union (see, to that effect, judgment of 13 December 2017, HTTS v Council, T‑692/15, under appeal, EU:T:2017:890, paragraph 48).

53 The decisive test for a finding that the requirement not to leave those individuals to bear the consequences of flagrant and inexcusable misconduct on the part of the institution concerned has been satisfied, is whether the institution concerned has manifestly and gravely disregarded the limits of its discretion. The determining factor in deciding whether there has been such an infringement is, therefore, the discretion available to the institution concerned. It is apparent from the criteria of the case-law that, if the institution in question has only considerably reduced, or even no, discretion, the mere infringement of EU law may be sufficient to establish the existence of a sufficiently serious breach (see judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 35 and the case-law cited).

54 However, that case-law does not establish any automatic link between, on the one hand, the fact that the institution concerned has no discretion and, on the other, the classification of the infringement as a sufficiently serious breach of EU law. The extent of the discretion enjoyed by the institution concerned, although determinative, is not the only yardstick. On this point, the Court of Justice has many times recalled that the system of rules it has developed with regard to the second paragraph of Article 288 EC (now the second paragraph of Article 340 TFEU) also takes into account, in particular, the complexity of the situations to be regulated and the difficulties in applying or interpreting the texts (see judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraphs 36 and 37 and the case-law cited).

55 It follows that only the finding of an irregularity that an administrative authority, exercising ordinary care and diligence, would not have committed in similar circumstances, can render the European Union liable (see judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 39 and the case-law cited).

56 It is, consequently, for the EU judicature, once it has first determined whether the institution concerned enjoyed any discretion, next to take into consideration the complexity of the situation to be regulated, any difficulties in applying or interpreting the legislation, the clarity and precision of the rule infringed, and whether the error made was inexcusable or intentional. On any view, an infringement of EU law is sufficiently serious if it has persisted despite a judgment finding the infringement in question to be established or a preliminary ruling, or settled case-law on the matter from which it is clear that the conduct in question constituted an infringement (see judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 40 and the case-law cited).

57 In the present case, it must be borne in mind that, in the judgment of 5 February 2013, Bank Saderat Iran v Council (T‑494/10, EU:T:2013:59), the Court rejected all the grounds put forward by the Council to justify BSI’s inclusion in the list of designated persons and entities. The Court held, in particular, as follows:

– the Council had made a factual error as regards the Iranian State’s part shareholding in BSI, since BSI is not 94% owned by the Iranian State, which is a minority shareholder (paragraphs 107 and 108 of the judgment);

– the Council had produced no evidence or information to substantiate the claim that BSI had provided services to Mesbah Energy Company (paragraph 109 of the judgment);

– the Council had produced no evidence to substantiate the claim that BSI had provided financial services to Sanam Industrial Group after the latter’s designation or that BSI was aware of the alleged involvement of Sanam Industrial Group in nuclear proliferation before its designation (paragraph 110 of the judgment);

– the Council had not produced any information on the letters of credit handled by BSI on behalf of Defence Industries Organisation (‘DIO’) and Iran Electronics Industries (IEI) (paragraph 114 of the judgment).

58 As regards that last indent more specifically, a point of contention between the parties in the present case, it is apparent from paragraphs 111 to 116 of the judgment of 5 February 2013, Bank Saderat Iran v Council (T‑494/10, EU:T:2013:59), that BSI accepted that DIO and IEI were engaged in nuclear proliferation and that it had handled their letters of credit, while nonetheless denying that those services justified the adoption of restrictive measures. In BSI’s view, those services were ordinary banking services linked to export letters of credit, issued by third-party banks, unconnected with nuclear proliferation. The Court therefore asked the Council to send to it information on the letters of credit, but the Council did not reply to that request. The Court did not accept the argument that the bank had also failed to produce any material, finding that it was for the Council to produce the evidence and information on which it had relied and that the fact that it was impossible to determine whether the bank’s arguments were well founded should not prejudice the bank. Since the reason why it was impossible was the Council’s failure to meet its obligation to submit relevant evidence and information, the Court upheld the second plea in law.

59 The Court of Justice endorsed that approach. In paragraph 105 of the judgment of 21 April 2016, Council v Bank Saderat Iran (C‑200/13 P, EU:C:2016:284), it held:

‘As regards the third reason, the General Court held, having regard to the lack of detailed information concerning the letters of credit handled by Bank Saderat Iran on behalf of DIO and IEI, that it was impossible to determine whether Bank Saderat Iran’s arguments were well founded. This Court must reject the arguments of the Council, the Commission and the United Kingdom, which rely on Articles 1(4) and 15(1) of Decision 2010/413, Article 4 of Regulation No 267/2012, and on paragraphs 5, 7 and 14 of [United Nations Security Council Resolution, (‘UNSCR’)] UNSCR 1737 (2006), UNSCR 1747 (2007) and UNSCR 1929 (2010) to demonstrate that Bank Saderat Iran’s handling of export letters of credit of DIO and IEI constitutes by itself support for the Islamic Republic of Iran’s proliferation-sensitive nuclear activities. The Council did not produce any evidence before the General Court to prove that those letters of credit related to goods whose export from Iran was prohibited under the provisions of the acts and resolutions cited above, and thus failed to prove that the services provided by Bank Saderat Iran to DIO and IEI constituted such support. Consequently, the General Court did not err in law when it concluded, in paragraph 116 of the judgment under appeal, that the second plea in law had to be upheld.’

60 It is, therefore, apparent that the applicant refers, as regards the rule of law which was held to have been infringed in the judgment of 5 February 2013, Bank Saderat Iran v Council (T‑494/10, EU:T:2013:59), to the finding that the Council had failed to comply with the obligation to establish that BSI had provided support for nuclear proliferation. Consequently, the alleged infringements concern, as the applicant stated at the hearing, those referred to in the implementing regulation which implemented Article 7(2) of Regulation No 423/2007, Article 16(2)(b) of Regulation No 961/2010 and Article 23(2)(a) of Regulation No 267/2012.

61 First, in accordance with the case-law, the relevant provisions of the acts at issue which were infringed by the imposition of the restrictive measures stemming from the adoption of those acts must be analysed as ensuring that the individual interests of the persons and entities liable to be concerned are protected and are, therefore, to be considered rules of law intended to confer rights on individuals. If the substantive conditions in question are not satisfied, the person or the entity concerned is entitled not to have restrictive measures imposed on it. Such a right necessarily implies that the person or the entity on which restrictive measures are imposed in circumstances not provided for by the provisions in question may seek compensation for the harmful consequences of those measures, if it should prove that their imposition was founded on a sufficiently serious breach of the substantive rules applied by the Council (see, by analogy, judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 52 and the case-law cited).

62 Secondly, as to whether the Council enjoyed any discretion, it is apparent from the case-law that the Council’s obligation to substantiate the restrictive measures adopted arises from the requirement to observe the fundamental rights of the persons and entities concerned, and in particular their right to effective judicial protection, which implies that the Council does not enjoy any discretion in that regard (judgment of 25 November 2014, Safa Nicu Sepahan v Council, T‑384/11, EU:T:2014:986, paragraph 60).

63 As regards the determination of the Council’s obligations towards the applicant in the light of the case-law in force when the acts at issue were adopted, it must be recalled, as the Court of Justice had already stated in case-law predating the adoption of those acts, that the European Union is based on the rule of law and the acts of its institutions are subject to review by the Court of their compatibility with EU law and, in particular, with the FEU Treaty and the general principles of law (see judgment of 29 June 2010, E and F, C‑550/09, EU:C:2010:382, paragraph 44 and the case-law cited), and natural and legal persons must enjoy effective judicial protection (see, to that effect, judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 35).

64 With regard to respect for the principle of effective judicial protection, the Court of Justice held in paragraph 343 of the judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, EU:C:2008:461), that restrictive measures adopted in respect of natural or legal persons do not escape all review by the EU judicature, including where it has been claimed that the act laying them down concerns national security and terrorism (see judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 36).

65 As is evident from that case-law, the right to effective judicial protection requires the Council to provide, in the event of a challenge, information or evidence substantiating the reasons for the adoption of restrictive measures against natural or legal persons. In that regard, it is apparent from paragraph 336 of the judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, EU:C:2008:461) that it must be possible for the judicial review of restrictive measures adopted in respect of natural or legal persons to apply, in particular, to the lawfulness of the grounds on which the decision imposing a set of restrictive measures on a person or on an entity is based (judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 37).

66 Similarly, in paragraph 57 of the judgment of 29 June 2010, E and F (C‑550/09, EU:C:2010:382), the Court of Justice considered that an adequate review by the courts of the substantive legality of individual restrictive measures had to cover, in particular, verification of the facts and of the evidence and information relied upon in order to adopt those measures (judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 38).

67 Furthermore, although the cases giving rise to those judgments concerned asset-freezing measures adopted in the specific context of the fight against international terrorism, it is clear that the obligation to establish that restrictive measures targeting individual persons and entities are well founded, which is derived from that case-law, applies equally with regard to the adoption of asset-freezing restrictive measures aimed at applying pressure on the Islamic Republic of Iran, such as those covering the applicant, given, in particular, the individual nature of those restrictive measures and the considerable impact they are likely to have on the rights and freedoms of the persons and entities subject to them (see, to that effect, judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraphs 361 and 375).

68 In those circumstances, it must be held that the obligation on the Council to provide, in the event of a challenge, information or evidence substantiating the reasons for the adoption of restrictive measures against a natural or legal person was already apparent, at the time when the provisions at issue were adopted, from well-established case-law of the Court of Justice (see, to that effect, judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 40).

69 However, while in the case giving rise to the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:2014:986, paragraph 59), the General Court found that the Council had committed an infringement although it did not enjoy any discretion, this was due to the fact, as the Court of Justice held in the judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402, paragraph 33), that it did not have information or evidence to substantiate the reasons for the adoption of restrictive measures against the applicant.

70 In the present case, it must be found that although the annulment of the applicant’s listing was justified, in part, by a similar ground to that in the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:2014:986, paragraph 59) — namely the Council’s failure to comply with the obligation to disclose to BSI, as the entity concerned, evidence adduced against it as regards the ground that it had provided financial services to entities which carried out purchases intended for the Islamic Republic of Iran’s nuclear and ballistic missile programmes — it may be distinguished from it on an important point. It was indeed common ground that BSI had handled letters of credit of entities involved in nuclear proliferation.

71 The finding in paragraph 111 of the judgment of 5 February 2013, Bank Saderat Iran v Council (T‑494/10, EU:T:2013:59) — namely the circumstance that BSI had neither denied that OID and IEI were involved in nuclear proliferation nor that it had handled letters of credit on behalf of those two entities — could not be considered from the outset as devoid of any relevance as regards whether BSI and the applicant could be listed.

72 It is, admittedly, apparent from the judgments of the General Court and the Court of Justice delivered after BSI and the applicant challenged their inclusion in the list of designated persons and entities that that circumstance does not in itself justify those listings.

73 However, that point had not yet been made clear by the EU judicature at the date on which the applicant’s name was included in the list of designated persons and entities. Under those conditions, even if at the time of the applicant’s listing, the Council had been in a position to perceive the error it was making in relying on that circumstance alone, without being in possession of additional information or evidence, it cannot be found that that error was flagrant and inexcusable within the meaning of the case-law cited in paragraph 55 above and that an administrative authority exercising ordinary care and diligence would not have committed the error in similar circumstances.

74 Consequently, the infringement found in the judgment of 5 February 2013, Bank Saderat v Council (T‑494/10, EU:T:2013:59) does not amount to a sufficiently serious breach in order to give rise to non-contractual liability on the part of the European Union

75 The action must, therefore, be dismissed in its entirety, without there being any need to examine whether the other conditions for establishing the European Union’s non-contractual liability have been met, or to examine the applicant’s application for a measure of organisation of procedure consisting in the appointment of an expert in order to carry out an accounting valuation of the damage alleged.

76 Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party must be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

77 In addition, under Article 138(1) of the Rules of Procedure, the Member States and institutions which have intervened in the proceedings are to bear their own costs.

78 Since the Council has applied for costs and the applicant has been unsuccessful, the applicant must be ordered to bear its own costs and to pay those incurred by the Council. The Commission must bear its own costs.

2. Orders Bank Saderat plc to bear its own costs and to pay those incurred by the Council of the European Union;

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	Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Bank Saderat v Council (Non-contractual liability - Common foreign and security policy - Restrictive measures against Iran - Judgment) [2019] EUECJ T-433/15 (05 June 2019) URL: http://www.bailii.org/eu/cases/EUECJ/2019/T43315.html Cite as: ECLI:EU:T:2019:374, EU:T:2019:374, [2019] EUECJ T-433/15

Court of Justice of the European Communities (including Court of First Instance Decisions)