September 13-2013
An EU court ruled Friday against EU sanctions on several Iranian firms but has confirmed sanctions against the two main banks under sanctions.
Ten suits were filed against the EU after it imposed sanctions. The EU General Court ruled sanctions in eight of those cases were not legal because the EU was unable to prove that those sanctioned were linked to Iran’s nuclear program.
But the General Court okayed the sanctions against Bank Melli, Iran’s largest bank, and the Europaisch-Iranische Handelsbank, a major Iranian bank based in Germany.
Most of the international news coverage failed to report on the upholding of sanctions against the two big banks and just reported the overturning of sanctions in the other eight cases.
The sanctions against those eight were not halted, however. The General Court said the sanctions would remain in place for two more months to give the European Union time to appeal to the Court of Justice, Europe’s Supreme Court. And, if the EU appeals, the sanctions will remain in place until the appeal is ruled on by the Court of Justice.
The ruling in Brussels was the latest in a string of reversals for EU governments, which have been reluctant to share evidence that they deem overly sensitive or that might compromise intelligence gathering.
The Wall Street Journal and The New York Times last week said that British, French and German officials—working in collaboration with colleagues in Washington and Brussels—are looking at new options.
The simplest is a case-by-case review of each entity sanctioned to see if new evidence can be filed publicly with the court in any future legal challenge.
A second would be to see if sanctions could be justified on grounds other than nuclear ties. The EU already targets Iranians for human rights abuses and has applied sanctions on other countries for a host of reasons.
The EU could also shift from targeting companies and individuals toward broader sector-specific measures, as already done with some shipping, energy and financial sanctions.
The EU might also set up a new channel to provide classified information to the EU courts while ensuring it would remain confidential. That would require the agreement of the court system, however.
European governments already agreed last October to shift tactics by moving away from blacklisting individual banks and instead imposing across-the-board measures, like requiring authorization for transactions of more than 10,000 euros ($13,000), with some exceptions for transfers in areas like humanitarian aid, medical equipment and farming.
Some EU countries are reluctant to cast around for new justifications for the sanctions, fearing that doing so could undermine the credibility of all Iran restrictions.
Scrapping individual listings in favor of sectors would likely be unpopular with politicians who prefer to be able to point to specific targets and the reasoning behind its selection, and would be legally complex to design so as to avoid strangling legitimate trade. In addition, all decisions on sanctions must be unanimous, making approval of a broad new package a huge diplomatic challenge.
The General Court said the sanctions remain in place on Bank Melli because it paid scholarships on behalf of the Atomic Energy Organization of Iran after the UN sanctioned the bank, this proving a link to Iran’s nuclear program.
The sanctions remain in place on the German-based bank because transactions it carried out in Europe—which did not require secret intelligence methods to detect—proved the link to Iran’s nuclear program and justified sanctions.
The court overruled the sanctions on the others, saying the EU failed to prove their ties to Iran’s nuclear program.
The sanctions overruled applied to four banks—Post Bank Iran, Export Development Bank of Iran, Persia International Bank and Bank Refah Kargaran—plus Iran Insurance Co., Good Luck Shipping, Iranian Offshore Engineering & Construction Co., and Nasser Bateni, the sole individual involved. He is the manager of Hanseatic Trade Trust & Shipping, based in Hamburg, Germany.