Sharif University’s ECJ appeal rejected

The European Court of Justice has dismissed the appeal brought by Sharif University of Technology against the General Court’s judgment declining to annul its listing on the EU’s sanctions against Iran (see previous blog). SUT was listed for providing support for the government of Iran. See Case C-385/16 P Sharif University of Technology v Council [2017].

The Court dismissed SUT’s first argument, that the General Court had not considered one of SUT’s grounds for annulment, because the ECJ said the University had not raised it before the General Court. The ECJ upheld the General Court’s interpretation of the listing criterion of providing “support, such as material, logistical, or financial support, to the Government of Iran” as not requiring any connection with Iran’s nuclear activities.  It held that the General Court had been correct to find that SUT provided support to the Iranian government for these purposes because it had been involved with the government in military (as opposed to nuclear) or military-related fields, evidenced by agreements between SUT and the government of Iran involving the production of satellites, participation in smart boat competitions, and work for Iran’s air force.

EU annuls listing of Alkarim on Syria sanctions

The General Court of the EU has annulled a listing of Alkarim for Trade and Industry LLC, a Syrian firm involved in trading lubricants and base oils, from the EU’s sanctions on Syria.  Alkarim remains listed for reasons given in subsequent listings that it did not challenge.

The challenged reasons for Alkarim’s listing were “Parent company of Pangates with operational control of it. As such it is providing support to and benefiting from the Syrian regime. It is also associated with listed Syrian oil company Sytrol”. See Case T-35/15 Alkarim for Trade and Industry LLC v Council [2017]. The Council said these reasons showed that Alkarim benefited from and supported the regime, and was associated with a listed entity, Sytrol.

The Court found that the Council had not provided sufficient evidence to support its assertions that Alkarim was the parent company of Pangates, a listed firm, and that it was associated with Sytrol, or that it was associated with the Syrian regime. The judgment contains comments about the circumstances in which applicants can rely on evidence submitted late. The Council was ordered to pay Alkarim’s costs.

EU court annuls Libya sanctions on Quaddafi’s daughter

The General Court of EU has today held that the re-inclusion of Aisha Quaddafi on the EU’s targeted Libya sanctions in 2014 (implementing UN listings) was unlawful because the EU institutions had not explained why being Colonel Quaddafi’s daughter and alleged closeness to his regime justified her re-inclusion in 2014.  See Case T-681/14. She was out of time to challenge her original 2011 listing.  The Court said that even if it were relevant that supporters of the former regime continued to play “a role in the current situation in Libya and were involved in attacks against civilians”, the EU had not explained her “individual, specific and concrete role” in those events that could have justified her re-listing.

ECJ upholds and clarifies EU’s Russia sanctions in Rosneft judgment

The ECJ has today answered questions the UK High Court referred to it (on which see previous blog) in the EU’s preliminary reference procedure asking for the ECJ to interpret some of the EU’s sanctions on Russia imposed in July 2014.  The ECJ’s judgment is here; Case C-72/15.  The EU Russia sanctions at issue are those imposing restrictions on some financial transactions and on the access of some Russian entities to EU capital markets, and on the export of some goods and technology and services required for oil transactions. The questions were referred to the ECJ in the course of a judicial review brought by Rosneft (the Russian oil and gas company) against the UK Government and Financial Conduct Authority (see previous blog for the background to this case). See previous blog for the Advocate General’s opinion in this case.

The ECJ judgment holds (link to the Court’s summary of its judgment here) that:

  1. It has jurisdiction to answer most of the questions on the validity of these restrictive measures, even though they are EU Common Foreign & Security Policy (CFSP) measures, because the ECJ has jurisdiction to consider whether CFSP measures comply with Article 40 TEU (which concerns institutional competence) and CFSP decisions imposing restrictive measures on natural or legal persons.  The Court commented that the exclusion of jurisdiction for certain CFSP decisions should be “interpreted strictly” given the need to ensure effective judicial protection as part of the rule of law.
  2. The ECJ rejected Rosneft’s argument that the EU Council had encroached on the powers of the Commission and EU High Representative for foreign & security policy in breach of Article 40 by enacting these measures.
  3. These measures were not incompatible with the EU-Russia Partnership agreement because the EU institutions could take the view that they were necessary to protect essential EU security interests and to maintain peace and international security.
  4. The measures gave sufficient reasons and did not breach the principle of equal treatment or misuse the EU’s powers, nor did they amount to a disproportionate interference with Rosneft’s fundamental rights.
  5. Rosneft would have to have challenged the Council’s refusal to give full access to its file in an action for annulment before the General Court, not in a preliminary reference in the ECJ.
  6. The ECJ said the vagueness of some of the measures did not make them invalid for lack of certainty or prevent member states from imposing criminal penalties for breach, and gave interpretations of a few provisions:
    • The power for authorities to grant an authorisation in Article 3(5) of Regulation 833/2014 must be understood as meaning that they had to ensure that the application of the first sub-para of Article 3(5) was without prejudice to the execution of contracts concluded before 1 August 2014.
    • The measures on “financial assistance” in Article 4(3)(b) do not include the processing of a payment by a bank or other financial institution.
    • Article 5(2) prohibits the issuance of Global Depositary Receipts pursuant to a depositary agreement concluded with one of the entities listed in Annex VI where those GDRs represent shares issued by one of those entities before 12 September 2014.

Syrian sanctions on George Haswani annulled

The General Court of the EU has just annulled targeted sanctions on George Haswani, because the evidence the EU Council relied on in court did not provide any support for the reasons it had given for including him in the EU’s targeted sanctions on Syria – Case T-231/15 Haswani v Council [2017].  Mr Haswani was included for being an “important Syrian businessman”, co-owner of an engineering and construction company that has ties with the Syrian regime, for being an intermediary with the regime in oil contracts, and enjoying favourable treatment from the regime through Stoytransgaz, a Russian oil company.  The Court, after a detailed analysis of all the evidence put forward by the Council, concluded that the evidence it relied on was vague and general and did not substantiate the reasons given for his inclusion.

The Court rejected Mr Haswani’s claim for damages resulting from his unlawful EU listing because he had not demonstrated that the losses he claimed were caused by the imposition of EU sanctions. The Court also rejected his challenge to subsequent amended sanctions relating to him because he had not properly amended his pleadings to challenge those measures.

EU court rejects Bank Tejarat’s challenge to its re-listing

The General Court of the EU has dismissed another challenge to an EU decision to re-list an Iranian entity that won its challenge to its original sanctions designation.  A link to the judgment is here. The Court regularly now upholds decisions to re-list entities on the revised basis that they provide support for the Government of Iran, in circumstances in which the EU could not sustain the original reasons given for their inclusion (usually on the grounds that they support Iran’s nuclear programme).

Bank Tejarat’s original listing was annulled in January 2015 (see previous blog) then it was re-listed in April 2015 (blog here). The General Court has said its re-listing was not unlawful essentially because it was based (inter alia) on the fact that it supports the Iranian Government by offering financial resources and services for oil and gas development projects which is a significant source of Government funding.

ECJ says actions by armed forces can be terrorist acts for sanctions purposes

The European Court of Justice has just given judgment in the LTTE case, Case C-158/14 A, B, C, D v Minister van Buitenlandse Zaken.  The Court followed the views of Advocate General Sharpston in her opinion (see previous blog). This was a preliminary reference, meaning that the ECJ was answering questions about the interpretation of EU law rather than being asked to invalidate sanctions measures.  The 2 main points in the judgment are that:

  • The preliminary reference was admissible because it was not clear that A, B, C and D would have had standing to bring a direct action in the General Court (since they were not EU-designated) – had they had so they would have had to have brought a direct action not a preliminary reference; and
  • Actions by armed forces during periods of armed conflict within the meaning of international humanitarian law can constitute terrorist offences / terrorist acts for the purposes of the EU’s terrorist asset freezing regime.

General Court rejects another re-listing case; IRISL v Council

The General Court of the EU has rejected another challenge to the re-listing of entities after they have won their annulments challenging their initial listing on the EU’s Iran sanctions; Islamic Republic of Iran Shipping Lines v Council (link to the judgment is here).  The Court has held that the Council was entitled not only to re-list IRISL and some companies said to be connected with it, but that it could introduce new listing criteria that expressly target IRISL-connected companies after IRISL’s designation had been annulled (on which see previous blog). The judgment contains interesting comments on the probative value of witness evidence and the credibility and source of evidence. Maya Lester QC acted for the applicants.