(Case T‑580/19)

Sayed Shamsuddin Borborudi

v

Council of the European Union

Judgment of the General Court (Fourth Chamber), 9 June 2021

(Common foreign and security policy – Restrictive measures taken against Iran with the aim of preventing nuclear proliferation – Freezing of funds – List of persons, entities and bodies subject to the freezing of funds and economic resources – Retention of the applicant’s name on the list – Error of assessment – Article 266 TFEU)

1. Common foreign and security policy – Restrictive measures against Iran – Legal basis – Restrictive measures provided for by a decision adopted on the basis of Article 29 TEU and by a regulation based on Article 215 TFEU – Adoption of an implementing regulation subject to the prior adoption of a decision on the basis of Article 29 TEU – Application for annulment directed solely against the implementing regulation adopted on the basis of Article 215 TFEU – Whether permissible

   (Art. 29 TEU; Art. 215(1) TFEU; Council Decision (CFSP) 2019/870; Council Regulation 2019/855)

   (see paragraphs 23, 26‑29)

2. Common foreign and security policy – Restrictive measures against Iran – Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation – Action for annulment of a person subject to a decision to freeze funds – Allocation of the burden of proof – Judicial review

   (Council Regulations Nos 267/2012 and 2019/855)

   (see paragraphs 45, 46, 55)

3. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures against Iran – Scope of the review – Exclusion of matters brought to the knowledge of the institution after the adoption of the contested decision

   (Council Regulations Nos 267/2012 and 2019/855)

   (see paragraph 50)

4. European Union – Judicial review of the legality of the acts of the institutions – Restrictive measures against Iran – Scope of the review – Proof that the measure is well founded – Obligation on the competent EU authority to establish, in the event of challenge, that the grounds held against the persons or entities concerned are well founded – Breadth of the discretion of that competent authority – Relevance of evidence produced on the basis of a previous inclusion where there are no amendments to the grounds for inclusion or changes in the applicant’s situation or in the context in Iran – Changes in the applicant’s situation

   (Council Regulations Nos 267/2012 and 2019/855)

   (see paragraphs 60‑62, 65)

5. Common foreign and security policy – Restrictive measures against Iran – Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation – Alternative criteria fixed by EU measures for the inclusion of an entity in the lists of persons and entities concerned by the restrictive measures – Scope – Existence of a direct or indirect link between a person’s activities and nuclear proliferation – No actual reprehensible conduct – Irrelevant

   (Council Decision 2010/413/CFSP; Council Regulation No 267/2012)

   (see paragraphs 81-85)

6. Common foreign and security policy – Restrictive measures against Iran – Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation – Judicial review of the legality – Scope – Allocation of the burden of proof – Obligation to submit concrete evidence and information – Sound and consistent evidence – Absence – Error of assessment

   (Council Regulations Nos 267/2012 and 2019/855)

   (see paragraphs 86-89)

7. Action for annulment – Judgment annulling a measure – Effects – Partial annulment of a regulation concerning restrictive measures against Iran – Retroactive effect of annulment – Obligation on the Council to eliminate from decisions to freeze funds adopted on the same day grounds for listing identical to those held to be illegal – Scope

   (Art. 266 TFEU)

   (see paragraphs 93‑98)

Résumé

In 2010, the Council of the European Union adopted restrictive measures ( 1 ) in order to compel the Islamic Republic of Iran to end proliferation-sensitive nuclear activities or activities contributing to the development of nuclear weapon delivery systems by providing for the freezing of funds and economic resources of persons and entities involved in that nuclear programme. The applicant, Mr Borborudi, had been included on 1 December 2011 on the list of persons and entities covered by those measures on the grounds that he held the post of Deputy Head of the Atomic Energy Organisation of Iran (AEOI) and, in particular, that he had been involved in Iran’s nuclear programme since at least 2002. The Council had subsequently extended that listing on several occasions.

Following the adoption of Decision 2019/870 ( 2 ) and Regulation 2019/855, ( 3 ) by which the Council extended the inclusion of his name on the list at issue on the same grounds against him, the applicant brought an action for annulment of that regulation. He alleged, inter alia, that the Council had made an error of assessment and had failed to establish that the restrictive measures were well founded.

The General Court annuls Regulation 2019/855 in so far as it concerns the applicant and examines the consequences of the annulment of that regulation, adopted on the basis of Article 215 TFEU, on Decision 2019/870, adopted on the basis of Article 29 TEU.

Findings of the Court

In the first place, the Court considers that the fact that the subject matter of the action is limited to an application for annulment of Regulation 2019/855, in so far as it concerns the applicant, and does not also relate to Decision 2019/870 does not preclude its examination. It recalls in that regard that decisions adopted on the basis of Article 29 TEU and regulations adopted on the basis of Article 215 TFEU are two types of act, the first declaring the Union’s position with respect to the restrictive measures to be adopted and the second constituting the instrument giving effect to those measures at Union level. Despite their close connection, the Court holds that those acts are distinct and independent, so that there is nothing to prevent an applicant from challenging only an implementing regulation.

In the second place, the Court considers that the first ground for inclusion on the list at issue is unfounded in so far as the Council has not established that the applicant, on the date of adoption of the contested measure, was a Deputy Head of the AEOI. The Court notes in that regard that the Council was not entitled to criticise the applicant, without reversing the burden of proof, for not having established that he had ceased all activity within the AEOI by requiring him to inform it of that fact and to submit evidence to the Council in that regard. On the contrary, the Council was required to examine carefully, in the context of the annual review of the restrictive measures, ( 4 ) the evidence substantiating the inclusion of the applicant’s name on the list at issue, notwithstanding the power vested in the applicant to submit, at any time, observations or new evidence. ( 5 ) The Court observes, in the present case, that there is no evidence to substantiate the ground that, as was stated in the non-confidential extract of the listing proposal, the applicant was a Deputy Head of the AEOI on the date of adoption of the Regulation.

In the third place, the Court considers that the Council replaces the grounds on which the contested measure is based by claiming that the retention of the applicant’s name on the list at issue is justified by his past activities. The Court recalls that the listing criterion relating to the provision of support for Iran’s proliferation-sensitive nuclear activities implies that the existence of a direct or indirect link is established between the activities of the person and nuclear proliferation. It specifies in that respect that the adoption of restrictive measures against a person does not necessarily presuppose that that person has actually previously acted reprehensibly; the risk that that person may do so in the future may be sufficient in itself. However, the existence of a direct or indirect link between a person’s activities and nuclear proliferation is, on the other hand, a necessary condition for the inclusion of that person’s name on the list at issue. The Council could not, therefore, rely, on the date of adoption of the contested measure, on the applicant’s former employment with the AEOI and his former involvement in Iran’s nuclear programme, without adducing sound and consistent evidence from which it might be inferred that the applicant maintained links with the AEOI and that programme, or, more generally, with proliferation-sensitive nuclear activities.

Lastly, the Court examines the consequences of the annulment of Regulation 2019/855, in so far as it concerns the applicant, for Decision 2019/870, which the applicant has not challenged. It observes, first of all, that this judgment does not automatically lead to the annulment of Decision 2019/870. However, in so far as those two acts impose identical measures on the applicant, Decision 2019/870’s remaining applicable despite the annulment of the contested measure would risk seriously jeopardising legal certainty. The Court goes on to recall that, in order to comply with the annulment judgment, the Council is required to have regard both to the operative part of the judgment and to the grounds on which it is based. Those grounds identify the grounds for including the applicant’s name on the list at issue as being illegal and indicate the specific reasons for their illegality. The Council must therefore ensure that any subsequent decisions to freeze funds that may be adopted after the judgment are not vitiated by the same defects. For that purpose, the Court states, in the light of the retroactive effect of annulling judgments, that the finding of unlawfulness takes effect from the date on which the annulled measure entered into force. In so far as the date on which Decision 2019/870 enters into force is the same as that of the contested measure, the Court infers from this that the Council may be under an obligation to eliminate from that decision the grounds for including the applicant’s name with the same content as those held to be unlawful in the present judgment, if those grounds are substantiated by the same evidence.

( 1 ) 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), and 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).

( 2 ) Council Decision (CFSP) 2019/870 of 27 May 2019 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2019 L 140, p. 90).

( 3 ) Council Implementing Regulation (EU) 2019/855 of 27 May 2019 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran (OJ 2019 L 140, p. 1).

( 4 ) Article 26(3) of Decision 2010/413 and Article 46(7) of Regulation No 267/2012.

( 5 ) Article 24(4) of Decision 2010/413 and Article 46(5) of Regulation No 267/2012.