1.

Nuclear proliferation is unquestionably one of the principal threats to international peace and security this century. The stability of regions as sensitive as the Middle East or Far East is particularly at stake.

2.

In order to combat that threat, the United Nations Security Council (‘the Security Council’) has decided, in various resolutions, ( 2 ) to put pressure on the Islamic Republic of Iran to cease its proliferation-sensitive nuclear activities and the development of nuclear weapon delivery systems (‘nuclear proliferation’).

3.

The restrictive measures laid down by the Security Council are therefore designed both to encourage the Islamic Republic of Iran to respect its international obligations, in particular to persuade that State to cooperate with the International Atomic Energy Agency (IAEA), ( 3 ) and, in the meantime, to avoid the risk of proliferation which that State’s development of its nuclear programme entails.

4.

The European Union decided, under its common foreign and security policy (CFSP), to give support to State activities by implementing the successive resolutions of the Security Council. The measures adopted by the Union include the freezing of the funds and economic resources of persons and entities which are regarded as contributing to the development of the Iranian nuclear programme. ( 4 )

5.

The actions brought by persons and entities subject to those measures are currently bringing more and more litigation before the Courts of the European Union. ( 5 )

6.

During recent months, those actions have led almost automatically to annulments of the contested funds-freezing measures. ( 6 ) Those annulments are generally based on a finding of infringement of the obligation to state sufficient reasons for those measures, or on the fact that the Council of the European Union had not adduced evidence in support of its claims, or on both those factors.

7.

In my view, such a series of annulments is the consequence of a standard of judicial review which is not suited to the specific nature of the measures at issue.

8.

Indeed, as is also the situation in other cases recently heard by the General Court, a number of assessments it made in its judgment in Manufacturing Support & Procurement Kala Naft v Council ( 7 ) seem to me to fail to take proper account of a number of relevant criteria and considerations, prominent among which is the preventive nature of the restrictive measures adopted against the Islamic Republic of Iran.

9.

The objective of the funds-freezing measures is to prevent the persons or entities designated from having access to economic or financial resources that they could use to support proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems.

10.

When it is called upon to assess the legality of a measure which is designed to avoid a risk in that way, that is to say, to prevent a threat from materialising, the European Union judicature cannot carry out a review which is identical, in its procedures and scope, to that which it must carry out in relation to a measure designed to punish an infringement which has been established.

11.

As the judgment under appeal shows, the General Court applies a method of review with an approach which is, in fact, that of classic criminal law.

12.

As regards the difference between prevention and repression, it should be pointed out that the former is completely different from the latter in that it seeks not to penalise an act which has been committed, but to avoid the commission of an act in the future. Since it is the future that is in issue, the act can only be a possibility. For that reason, which consists in wishing to avoid harm, the application of the preventive measure cannot be conditional, in principal, on evidence that the (natural or legal) person concerned is prepared and truly determined to commit a specific reprehensible act or has already committed it, but on the finding that there is an objective risk that he will commit it.

13.

However, in the approach taken by the General Court, I find that evidence is required that the entity subject to the restrictive measure has actually committed the acts which that measure has been adopted to prevent.

14.

By so doing, the General Court has, in my view, erred in law by disregarding the specific nature of the CFSP and that of the powers of the EU institutions in that area.

15.

None the less, that cannot mean that the jurisdiction to review restrictive measures which is expressly conferred on the Court of Justice by the Treaties themselves is necessarily a sham. Certainly not.

16.

On the other hand, and without it reducing in any way the authority of the Court of Justice or the nobility of its task, quite the contrary, it must clearly and scrupulously ensure that it does not impinge on the rights and powers of the Union institutions in respect of the CFSP. Consequently, it is the very essence of the preventive measure as conceived in the specific area of the CFSP which must be analysed.

17.

It is apparent from the circumstances in which it was decided to adopt restrictive measures against the Islamic Republic of Iran that the true position is that those measures arise in a such a climate of tension that those measures are taken in order to avoid a situation of potential conflict in a part of the world.

18.

In other words, the measures taken in that area constitute an alternative to war or to the commission of acts of war and are, therefore, special in nature.

19.

It seems to me to be absolutely clear that, in those situations, the considerable importance of which does not even need to be mentioned, the application of the criteria in force in classic criminal law cannot be transposed to the prevention of a threat to international peace and security concerning the CFSP, without there being a risk, as in the present case, of impinging on the assessment of the competent political authorities as regards the expediency of the measure and its implementation, which are determined by those authorities according to the nature and scope of the threat they are seeking to prevent.

20.

To subject the measures in question to a review that would call into question, in a general way, their application and effectiveness would be tantamount to considering that the Member States or the Union institutions have exaggerated the threat or the degree of coercion needed to neutralise it, although, in my view, that unquestionably and exclusively falls within their powers.

21.

In those circumstances, to require the Union institutions and, therefore, the Member States, to adduce evidence that such an entity has already committed the acts it is sought to prohibit before authorising the measures to prevent them seems particularly detached from the very nature of the CFSP and also from the dangerous reality of life in the world.

22.

By contrast, it is for the Court of Justice to verify whether, objectively seen, the measures taken truly do fall within the scope laid down by the decisions adopted by the Council concerning the CFSP and do not constitute, for example, a misuse of powers.

23.

To carry out a judicial review suited to the preventive nature of the restrictive measures requires the European Union judicature to take account of the precautionary principle. Its role is therefore to ensure, making due allowance for the discretion which must be accorded to the competent political authority and on the basis of the information concerning the case and its context that are made available to it, that the assessment made by that authority as regards the existence of a risk is not manifestly incorrect.

24.

In accordance with the preventive aim of restrictive measures, the role of the European Union judicature is not, therefore, to seek to be certain that the conduct which the competent political authority seeks to prevent has already occurred or, to put it another way, that the risk which that authority is trying to prevent has already materialised.

25.

It is, of course, natural that the European Union judicature, inspired by the concern to ensure that designated persons and entities have effective judicial protection in the face of measures which seriously affect their rights and freedoms, would not wish its review to be merely an ‘empty shell’.

26.

However, in the light of so essential an objective as the preservation of international peace and security, ( 8 ) and having regard to the secrecy with which the Islamic Republic of Iran develops its nuclear programme, it is only by taking account of the preventive nature of the restrictive measures, and by refusing to reason from a perspective of repression which is not that of the measures submitted for its assessment, that the European Union judicature will carry out a review which is both credible and realistic.

27.

The adaptation by the European Union judicature of the review it carries out of the restrictive measures adopted against the Islamic Republic of Iran is also necessary for the continuity itself of the role played by the European Union in that area on the international scene.

28.

This case clearly gives the Court of Justice the opportunity to establish the guidelines for the judicial review to be carried out of the funds-freezing measures applied to persons and entities considered to be providing support for nuclear proliferation.

29.

In that regard, I shall argue that, when it verifies whether the obligation to state reasons has been fulfilled, the European Union judicature must assess whether that reasoning is sufficiently precise and specific by taking into account the context in which the funds-freezing measure at issue was adopted and by relating the different grounds to each other without splitting them up artificially.

30.

I shall also observe that it cannot be claimed that the Council has infringed the rights of the defence and the right to effective judicial protection of the company at issue in this case on the ground that it did not provide the company with information it did not have, beyond that contained in the statement of reasons.

31.

As regards the assessment of the substance of the reasons, I shall maintain that, if, on the basis of all the information before it relating to the case and its context, the European Union judicature is able to determine that the risk posed by a person or entity in the light of the campaign against nuclear proliferation is sufficiently established, that person or that entity may rightly be regarded as supporting nuclear proliferation and may therefore be the subject of a funds‑freezing measure.

32.

In the judgment under appeal, the General Court annulled Council Decision 2010/413/CFSP, ( 9 ) Council Implementing Regulation (EU) No 668/2010, ( 10 ) Council Decision 2010/644/CFSP ( 11 ) and Council Regulation (EU) No 961/2010 ( 12 ) (‘the measures at issue’), in so far as they concern Manufacturing Support & Procurement Kala Naft Co., Tehran (‘Kala Naft’).

33.

Kala Naft is an Iranian company owned by the National Iranian Oil Company (‘the NIOC’) and has the object of acting as the central purchasing body for the oil, gas and petrochemical divisions of the latter’s group.

34.

In connection with the restrictive measures directed against the Islamic Republic of Iran in order to combat nuclear proliferation, ( 13 ) Kala Naft was made subject to a measure freezing its funds and economic resources.

35.

The inclusion of Kala Naft on the list concerned is a consequence of the application of the provisions of EU law which freeze the funds and economic resources of persons or entities recognised as participating, being either directly associated or providing support, in the proliferation-sensitive nuclear activities of the Islamic Republic of Iran. ( 14 )

36.

The reasons given to justify that inclusion are the following:

‘Trades equipment for oil and gas sector that can be used for Iran’s nuclear programme. Attempted to procure material (very hard-wearing alloy gates) which have no use outside the nuclear industry. Has links to companies involved in Iran’s nuclear programme.’

37.

The parts of the judgment under appeal which are affected by the appeal are those in which the General Court:

38.

The Council’s appeal is centred around two pleas in law. By the first plea, the Council criticises the reasons given by the General Court concerning the right of offshoots of third States to plead infringement of their fundamental rights. By its second plea, the Council calls in question the General Court’s assessments relating to the grounds of the decision to freeze the funds of Kala Naft, to the rights of the defence and right to effective judicial protection of that company, and also to the substance of the statement of reasons for the measure at issue.

39.

By its first plea, the Council criticises the reasoning of the General Court in paragraphs 43 to 46 of the judgment under appeal, which are worded as follows:

40.

The Council considers that the General Court erred in law by holding that the question whether Kala Naft had the right to plead infringement of its fundamental rights did not concern the admissibility of that plea, but only its merits. It takes the view that, if an entity which constitutes a governmental organisation within the meaning of Article 34 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), cannot enjoy the fundamental right to the protection of property or other fundamental rights, it does not have the capacity (locus standi) to plead an alleged infringement of those rights before the General Court.

41.

It bases its argument on Article 34 of the ECHR, which precludes the bringing of proceedings before the European Court of Human Rights by governmental organisations and similar entities, and other comparable provisions, such as Article 44 of the American Convention on Human Rights. ( 15 ) The ratio legis of the preclusion of governmental entities lies in the very nature of fundamental rights. It is for the State to respect the fundamental rights of the natural and legal persons falling within its jurisdiction, but the State itself cannot enjoy those rights. Even though the Treaties and the Charter of Fundamental Rights of the European Union (‘the Charter’) do not contain provisions identical to Article 34 of the ECHR, the same principle applies.

42.

It is therefore a matter of determining whether Kala Naft is a State entity. If it is, that, according to the Council, precludes its capacity to invoke the fundamental rights as beneficiary.

43.

In that regard, the Council mentions:

44.

As regards Kala Naft, the Council notes that, according to Article 3.1 of its Articles of Association, its sole object is to act as a central purchasing body in order to facilitate the implementation of policies decided by the Iranian Oil Minister. The Council also states that Kala Naft was set up by the NIOC and that it is wholly owned by that company, which is a State company under the control of the Iranian Oil Minister.

45.

The NIOC’s links with the Iranian State have been established in several decisions. The Council cites, in that regard, a judgment in which the French Court of Cassation held that the NIOC could enjoy the jurisdictional immunities accorded to the Member States on account not only of the constitutive links between itself and the Iranian State, but also of the public service mission of the NIOC. ( 19 ) The Council also cites an arbitration ruling in which the Iran-United States Claims Tribunal found that the NIOC acted as an agent of the Iranian State. ( 20 )

46.

As for the structural links between Kala Naft and the NIOC, the constitution of Kala Naft provides that it acts on behalf of the NIOC and in accordance with the rules laid down by that company. It therefore has no autonomy. The Council notes, in that regard, that the constitution of Kala Naft states several times that the organs of Kala Naft operate in accordance with the rules governing the NIOC, that the members of the board of directors must work full-time for the NIOC (Article 9 of the constitution) and that that body is responsible for acting on behalf of the NIOC (Article 11 of the constitution).

47.

In the light of those various elements, it must be acknowledged, according to the Council, that Kala Naft is an offshoot of the Iranian State. It states that that company has obvious means for helping the Iranian State develop its nuclear programme and has no autonomy which would enable it to avoid the demands of the Iranian Government.

48.

Since Kala Naft acts on behalf of the Iranian State through the NIOC, it must be regarded as an Iranian governmental entity. Consequently, Kala Naft does not have the legal capacity to invoke fundamental rights. Therefore, the General Court should have declared Kala Naft’s action inadmissible.

49.

The Council recognises that the institutions raised that objection only at the stage of the oral procedure, but argues that conditions governing admissibility fall within the scope of an absolute bar to proceeding. It also states that that objection as to inadmissibility is valid in respect of all the pleas raised by Kala Naft. Since the purpose of the action is to obtain the annulment of a decision to freeze assets, which constitutes an interference in the right to property, it is of no relevance that some of those pleas did not mention that right. It is therefore the action as a whole which should have been declared inadmissible.

50.

The Commission considers that the General Court should have declared the action inadmissible only in part. Basing its analysis on a distinction between procedural rights, which can be invoked by a State entity such as Kala Naft, and fundamental rights, such as the right to property, which cannot, the Commission maintains that only the plea alleging infringement of the right to property should have been declared inadmissible.

51.

To those arguments, Kala Naft replies, in the first place, that the Council never challenged the admissibility of the action, but only whether Kala Naft could rely on its fundamental rights. The General Court was right to hold that that plea related to the substance of the action. The conditions to which enjoyment of a right is subject are a matter of substance and not admissibility. In those circumstances, by now maintaining that the application lodged by Kala Naft is inadmissible because it does not have locus standi, the Council raises before the Court a new plea, which is therefore itself inadmissible.

52.

In the second place, Kala Naft argues that that plea relating to the substance of the action was raised for the first time at the hearing and was not a matter of public policy. It was therefore a new plea which is inadmissible under Article 48(2) of the Rules of Procedure of the General Court.

53.

In the third place, it is incorrect to state that Kala Naft could not bring an action before the General Court on the ground that it is an offshoot of the Iranian State. Kala Naft argues that, unlike Article 34 of the ECHR, no provision in the FEU Treaty prohibits a State from bringing an action before the Courts of the European Union. A State’s sovereignty affords it jurisdictional immunity enabling it not to be brought before a court, but does not prevent one sovereign from submitting voluntarily to the jurisdiction of another.

54.

Moreover, Kala Naft denies being an offshoot of the Iranian State. The fact that it is wholly owned by the Iranian State does not prevent it from carrying out its own independent activity. It disputes the decision of the French Cour de Cassation, which, it argues, does not reflect the distinction commonly made in the Member States between measures adopted jure gestionis or jure imperii. It cites, in that regard, a ruling of the Bundesverfassungsgericht, which allowed the attachment of funds held by the NIOC, on the ground that those funds did not constitute assets earmarked for sovereign purposes. ( 21 )

55.

In the fourth place, Kala Naft refers to recital 25 in the preamble to Decision 2010/413, according to which ‘[t]his Decision respects the fundamental rights and observes the principles recognised in particular by the Charter … and notably the right to an effective remedy and to a fair trial, the right to property and the right to the protection of personal data. This Decision should be applied in accordance with those rights and principles’, and to the paragraph in the Council’s letter of 29 July 2010 informing Kala Naft that it had been included in the list, which stated:

‘… your attention is also drawn to the possibility of challenging the Council’s decision before the General Court of the European Union, in accordance with the conditions laid down in Article 275, 2nd paragraph, and Article 263, 4th and 6th paragraphs, of the Treaty on the Functioning of the European Union.’

56.

In the fifth place, Kala Naft maintains that, if it were to be regarded as a State entity, any restrictive measure taken against it would be unlawful, because it would be contrary to Article 215(2) TFEU, which provides for restrictive measures only against natural or legal persons and groups or non-State entities.

57.

The argument put forward by the Council in support of its first plea consists in claiming that Kala Naft, as an offshoot of the Iranian State, does not have locus standi to invoke before the European Union judicature the protections and safeguards linked to fundamental rights, whether procedural or substantive. Taking the view that that was a condition for the admissibility of Kala Naft’s action before the General Court, as an absolute bar to proceeding, the Council criticises the General Court for having addressed that question from the point of view of the substance of the pleas raised, and not from that of their admissibility. It maintains that the Court should have declared Kala Naft’s action inadmissible in its entirety, whereas the Commission considers that the Court should have declared the action inadmissible only in part, in so far as the plea alleging infringement of the right to property was concerned.

58.

In my view, the General Court did not err in law by treating the question whether or not an offshoot of a third country may invoke the protections and safeguards linked to the fundamental rights as a question relating to substance rather than as a question of admissibility.

59.

Since it was indisputable that Kala Naft’s action fell within the scope of the second paragraph of Article 275 TFEU, that the company had locus standi to challenge its inclusion on the list before the European Union judicature, since that measure was of direct and individual concern to it within the meaning of the fourth paragraph of Article 263 TFEU, and that its legal interest in bringing proceedings was not disputed, the General Court was right to consider that whether or not Kala Naft could invoke the protections and safeguards linked to fundamental rights lay outside the examination of the conditions for admissibility of the action and related to the substance of the case. In my view, it is a matter which, if raised in time by the parties during the proceedings, should, if appropriate, be the subject of a preliminary assessment forming part of the examination of the substance of the pleas invoked.

60.

Since the arguments of the Council and the Commission were presented for the first time at the hearing before the General Court, without those institutions referring to the fact that they were based on matters of law or of fact which would be disclosed during the proceedings, it did indeed constitute a new plea within the meaning of the first subparagraph of Article 48(2) of the Rules of Procedure of the General Court, which that Court correctly declared inadmissible.

61.

The reference made by the Council and the Commission to Article 34 of the ECHR, which does not allow for the admissibility of applications presented before the European Court of Human Rights by governmental organisations, is irrelevant. As the General Court has recently stated, ( 22 ) Article 34 of the ECHR is a procedural provision which is not applicable to proceedings before the European Union judicature. Secondly, according to the case-law of the European Court of Human Rights, the aim of that provision is to ensure that a State which is a party to the ECHR is not both applicant and defendant before that court. ( 23 ) That reasoning cannot be transposed to annulment proceedings in EU law. This lays down, in the fourth paragraph of Article 263 TFEU, conditions for admissibility of actions for annulment which are peculiar to it and which reflect a different aim from that expressed in Article 34 of the ECHR. It cannot be a matter of making the admissibility of actions brought by offshoots of third States against restrictive measures subject to an additional (negative) condition, namely that it does not plead infringement of fundamental rights.

62.

Apart from that problem of classification between admissibility and substance of the action, the argument that an entity such as Kala Naft cannot plead before the Court of the European Union an infringement of its fundamental rights in order to challenge the restrictive measure applied to it is, in my view, manifestly wrong.

63.

As the Council has established, ( 24 ) Kala Naft has with the NIOC, an Iranian public entity, and therefore indirectly with the Iranian State, a number of structural and functional links, which make it possible to regard it as an offshoot of the Iranian State or, at the very least, as not acting independently but on behalf of that State. As is stated unambiguously in Article 3.1 of its constitution, the object of that central purchasing body is to implement the policies decided by the Iranian Oil Minister.

64.

However, in my view, that finding does not prevent such an entity from invoking before the Court of the European Union an infringement of its fundamental rights in order to contest the legality of the restrictive measure applied to it. As it is plain that actions brought against restrictive measures are centred mainly around pleas alleging infringement of fundamental rights such as the rights of the defence, the right to effective judicial protection or even the right to property, the Council’s argument has the effect, purely and simply, of depriving persons and entities dependant in one way or another on a third State of their right to an effective remedy.

65.

Furthermore, several provisions of primary legislation make it easily to rule out that argument.

66.

Article 215 TFEU constitutes the legal basis which permits the Council to adopt restrictive measures against third States, persons and entities linked to them and also non-State entities.

67.

When restrictive measures are designed to put pressure on a third country, as in the present case, that action may cover the freezing of funds belonging to persons or entities which are associated with the regime of the third country concerned. ( 25 ) There is nothing which states that such persons or entities, owing to their links with the third country to which the Union action applies, are entitled to lesser legal safeguards than those on which persons and entities which do not have such links with a third State may rely. I find, in that regard, that, by providing in Article 215(3) TFEU that ‘[t]he acts referred to in this Article shall include necessary provisions on legal safeguards’, that article does not make such a distinction. Moreover, the declaration on Articles 75 and 215 of the Treaty on the functioning of the European Union ( 26 ) points out the need to respect the rights and fundamental freedoms of the natural persons and entities affected by restrictive measures without making a distinction according to whether they have more or less close links with a third country, or even if they form a part of it.

68.

I would also point out, as does the General Court in its judgments in Bank Mellat v Council and Bank Saderat Iran v Council, ( 27 ) that neither in the Charter nor the Treaties are there any provisions which state that legal persons who are offshoots of States are not entitled to the protection of fundamental rights. On the contrary, the provisions of the Charter which are relevant to the pleas raised by Kala Naft, and in particular Articles 17, 41 and 47, guarantee the rights of ‘everyone’, a wording which includes legal persons such as that company.

69.

The same assessment may be made with regard to secondary legislation, by referring to recital 25 in the preamble to Decision 2010/413, which states that the decision ‘respects the fundamental rights and observes the principles recognised in particular by the Charter … and notably the right to an effective remedy and to a fair trial, the right to property and the right to the protection of personal data. This Decision should be applied in accordance with those rights and principles’.

70.

The only limit which I can detect on whether or not an offshoot of a third country may invoke the protections and safeguards linked to fundamental rights is that these, in order to be effectively invoked, must be suited to the natural or legal nature of the person who invokes them.

71.

It is necessary, finally, to point out that the argument put forward by the Council and the Commission is particularly surprising because it is in direct conflict with the requirement, enshrined in the Treaties, that the Union’s action on the international scene is to be guided by respect for fundamental rights. In that regard, I need only refer to Article 205 TFEU, read in conjunction with Article 21 TEU.

72.

In the light of all of those considerations, that argument must therefore be firmly rejected and the first plea raised by the Council rejected as unfounded.

73.

More generally, it is, in my view, expedient for the Court of Justice to take the opportunity offered by the present case to dispense with the idea, put forward several times by the Council and the Commission in other cases and accepted in the General Court’s judgment in Tay Za v Council, ( 28 ) that the fundamental rights, and in particular the rights of the defence, do not apply to the persons and entities named in the annex to a regulation adopting a scheme of restrictive measures against a third country. ( 29 ) That argument is the subject of paragraphs 86 to 91 of the judgment under appeal. It is based on a distinction, in my view artificial, between the persons and entities subject to restrictive measures on account of their own activities and those to whom those measures apply because they belong to a general category of persons and entities. Only the former may invoke the rights of the defence.

74.

Although the General Court, in the judgment under appeal, reaches a satisfactory conclusion, in that it recognises that the principle of respect for the rights of the defence may be invoked by Kala Naft, I do not think that the reasons it states in paragraph 88 of that judgment are correct. It finds that, unlike the persons concerned in Tay Za v Council, Kala Naft ‘is subject to the restrictive measures because it is presumed to be involved in nuclear proliferation, and not because it belongs to a general category of persons and entities associated with the Islamic Republic of Iran’. It thus lends weight to the idea of a distinction between two categories of persons and entities with regard to their ability to invoke the rights of the defence. The present case illustrates the irrelevance of such a distinction. As I shall have the further opportunity to argue below, the structural and functional links which Kala Naft enjoys with the Iranian State are precisely one of the factors which permit the conclusion that it provides support for the Iranian nuclear programme.

75.

As a basis for its reasoning, the General Court, in so far as concerns the rights of the defence, could merely have stated that such a distinction is not provided for by the Union legislature. It was therefore correct to point out, in paragraph 90 of the judgment under appeal, that ‘Article 24(3) and (4) of Decision 2010/413, Article 15(3) of Regulation [(EC)] No 423/2007 [ ( 30 )] and Article 36(3) and (4) of Regulation No 961/2010 set out provisions to safeguard the rights of defence of entities which are subject to restrictive measures adopted under those acts’ and that ‘[r]espect for those rights is subject to review by the Courts of the European Union’.

76.

By its second plea, which comprises three parts, the Council criticises the following points in the judgment under appeal.

77.

Three grounds justified the imposition of restrictive measures against Kala Naft. In the judgment under appeal, the General Court rejected as unfounded the plea alleging infringement of the obligation to state reasons in so far as it referred to the first and second grounds put forward by the Council. As regards the first ground, it considered that the reasons given had enabled Kala Naft to verify whether the contested measures were well founded, to defend itself before the General Court and to enable that Court to review the legality of the measures. ( 31 ) As regards the second ground, the General Court considered that it had enabled Kala Naft to dispute the alleged attempt to purchase and to allege that the hard-wearing alloy gates used by it are not intended solely for the nuclear industry. ( 32 )

78.

However, it upheld that plea as regards the third ground, giving the following explanation:

‘79 By contrast, the third ground, which is that the applicant maintains links with the companies taking part in Iran’s nuclear programme, is insufficient in so far as it does not explain what kind of relations it is actually alleged to have with what entities, so that it is unable to verify whether the allegation is well founded and to challenge it with the slightest degree of precision.’

79.

The General Court therefore decided, in paragraph 80 of the judgment under appeal, that ‘so far as the third ground is concerned … the contested measures must be annulled’. It then stated, in paragraph 81 of the judgment under appeal, that ‘[a]s the three grounds concerned are independent, that finding does not entail the annulment of the contested measures in so far as they introduce restrictive measures in relation to the applicant. However, the third ground cannot be taken into consideration when the other pleas of the application are examined, particularly the eighth plea relating to erroneous assessment of the facts’.

80.

Next, in the examination of the third plea, alleging infringement of Kala Naft’s rights of the defence and right to effective judicial protection, the General Court responded to the argument by which Kala Naft maintained that it was not given access to the evidence and information concerning it in the Council’s file notwithstanding the express request to that effect in the letter of 12 September 2010. By that letter, Kala Naft asks the Council, in essence, to give it information, ‘with a reasonable level of detail’, regarding the three grounds stated. After noting that the Council had not replied to that request in its letter of 28 October 2010, the General Court concluded that the Council had infringed Kala Naft’s rights of the defence by not replying to the request for access to the file which was made by the applicant in good time. ( 33 ) The General Court then held that the right of that company to effective judicial protection had been infringed, and therefore upheld the third plea and, accordingly, annulled the contested measures in so far as they concerned Kala Naft.

81.

Pointing out that, according to the Council, its file did not contain evidence or information other than that reproduced in the statement of reasons of the contested measures, the General Court considered it expedient, ‘for the sake of procedural efficiency and in the interest of the sound administration of justice’, to examine the seventh and eighth pleas, alleging respectively an error of law with regard to the concept of involvement in nuclear proliferation and an error in the assessment of the facts relating to the activities of Kala Naft.

82.

Regarding the seventh plea, alleging an error of law with regard to the concept of involvement in nuclear proliferation, the General Court set out the following reasons:

83.

Finally, concerning the eighth plea, alleging an error in the assessment of the facts relating to the applicant’s activities, the General Court held as follows:

84.

The Council maintains, in the first place, that the General Court erred in law by examining, separately and individually and from the point of view of different pleas for annulment, each of the three grounds for including Kala Naft on the list. In particular, in order to assess whether there was support for nuclear proliferation, the first ground is relevant to the other grounds for designating Kala Naft. Therefore, the General Court erred in law by not taking into account the relationship between that first ground and the other parts of the statement of reasons.

85.

In the second place, the Council maintains that the General Court erred in law by not taking proper account, when examining the second and third grounds, of the fact that those elements were based on information from confidential sources. It notes that the nuclear proliferation activities of the Islamic Republic of Iran are secret, that they have not been declared to the IAEA and that they have been pursued in infringement of the Security Council Resolutions. The activities which Kala Naft is alleged to have pursued in the second and third parts of the statement of reasons are also secret and the information on the basis of which they were established comes from confidential sources.

86.

Some Member States may have an objection to the communication of information from confidential sources since it may facilitate the identification of the persons who have provided that information or reveal the method by which that information was obtained. Consequently, the life or safety of the persons concerned may be put in danger and the method used for obtaining that information risks being compromised.

87.

The Council also states that that information may be given to a Member State by a third State in confidence, the latter refusing to authorise its disclosure. In such a situation, it is also necessary to respect the confidentiality of the information; otherwise, international cooperation between the Member States and third States risks being compromised.

88.

The Council infers from that that, when a Member State proposes to designate a person or an entity, but the evidence and information which substantiate or explain the ground for the designation come from confidential sources, it may lawfully make that designation on the basis only of the statement of reasons proposed by that Member State. The Council states that that statement of reasons must be objectively convincing, which it is in the present case.

89.

At the hearing, in order to demonstrate the objectively convincing nature of the grounds, it emphasised the fact, recorded in recital 17 in the preamble to Security Council Resolution 1929 (2010), that ‘chemical process equipment and material required for the petrochemical industry have much in common with those required for certain sensitive nuclear fuel cycle activities’.

90.

According to the Council, its approach is in accordance with the principle of mutual trust which must prevail between the Member States and between the Member States and the institutions of the European Union, and which is justified by the fact that the values concerning the respect for fundamental rights are common to the Member States and to the European Union. Moreover, that conclusion is also in accordance with the principle of the duty to cooperate in good faith, as provided in the first subparagraph of Article 4(3) TEU. It would therefore be excessive to require a Member State to disclose evidence and information even if it comes from confidential sources.

91.

The Council cites, moreover, various judgments of the European Court of Human Rights, relating to Article 6(1) of the ECHR, from which it is apparent that ‘the entitlement to disclosure of relevant evidence is not an absolute right. In any criminal proceedings there may be competing interests, such as national security or the need to protect witnesses at risk of reprisals or keep secret police methods of investigation of crime, which must be weighed against the rights of the accused’. ( 34 )

92.

According to the Council, that finding of the European Court of Human Rights made in relation to criminal charges must apply a fortiori to the restrictive measures at issue in this appeal in so far as they constitute not criminal sanctions but preventive measures. ( 35 )

93.

For all those reasons, the Council maintains that the General court erred in law by considering that it had to adduce evidence to substantiate the second part of the statement of reasons (namely, Kala Naft’s attempt to procure very hard‑wearing alloy gates used exclusively by the nuclear industry) and to give an further explanation of the third part of that statement of reasons (namely, that Kala Naft had links with the companies taking part in the Iranian nuclear programme). The Council also takes the view that the General Court erred in law by holding that it had infringed Kala Naft’s rights of the defence by not replying to its request to be informed of details concerning the case made against it.

94.

In reply to those arguments, Kala Naft claims, in the first place, that it was the Council itself which identified each part of the statement of reasons in the contested measures as being sufficient, in itself, to justify its decision. Not only did the General Court not err in law by rejecting the third ground, but the Council’s plea should be regarded as new and, therefore, inadmissible.

95.

Turning to the reasoning of the General Court in paragraphs 114 and 115 of the judgment under appeal, Kala Naft maintains, in the second place, that the first ground, which is intrinsically invalidated, could not have the effect of validating the third ground.

96.

In the third place, Kala Naft maintains that, even if the first and third grounds are read together, the latter is still obscure because it is impossible to understand to which companies and to which links the Council is referring.

97.

As regards the evidence, Kala Naft claims that the Council invoked the confidentiality of the evidence only at the hearing. It is therefore a new plea, which Article 48(2), of the Rules of Procedure of the General Court prohibited that Court from examining.

98.

Citing the judgments in Kadi and Al Barakaat International Foundation v Council and Commission and Fulmen v Council, ( 36 ) Kala Naft claims that the European Union judicature must be able to review the legality and the validity of measures to freeze funds, without the issue of the secrecy or confidentiality of the evidence and information used by the Council being raised as an obstacle.

99.

It states that the Council did not give it any information. Kala Naft notes that the reason for freezing its funds is that it attempted to purchase material (very hard-wearing alloy gates) used exclusively for the nuclear industry and maintains links with the companies participating in the nuclear programme. Kala Naft does not understand in what respect adducing evidence, in that regard, jeopardises the safety of the informants of the Council or of the Member States. It considers rather that that alleged confidentiality conceals a lack of tangible evidence and notes that the Council does not propose any practical measure for resolving the problem, such as communication in camera.

100.

Let me say, first of all, that I do not agree with the reasoning of the General Court and the result in which it culminates. That disagreement is explained to a large extent by the fact that, in my view, the General Court did not take adequate account of the context and preventive nature of the restrictive measures taken against the Islamic Republic of Iran.

101.

That context is characterised by a finding, expressed in the fourth recital in the preamble to Security Council Resolution 1929 (2010), namely that, ‘as confirmed by the reports … of the Director General of the [IAEA], Iran has not established full and sustained suspension of all enrichment-related and reprocessing activities and heavy water-related projects ..., nor cooperated with the IAEA in connection with the remaining issues of concern, which need to be clarified to exclude the possibility of military dimensions of Iran’s nuclear programme, nor taken the other steps required by the IAEA Board of Governors, nor complied with the provisions of Security Council resolutions 1696 (2006), 1737 (2006), 1747 (2007) and 1803 (2008)’. In the light of that finding, the Security Council decides, inter alia, in paragraph 5 of Resolution 1929(2010) that ‘Iran shall without delay comply fully and without qualification with its IAEA Safeguards Agreement’ [NPT ( 37 )].

102.

In the face of the persistent refusal of the Islamic Republic of Iran to implement those resolutions and to cooperate with the IAEA, the Security Council was prompted to put pressure on that State to persuade it to comply with its international obligations. The measures decided to that end were intended to continue for so long as the Security Council did not, owing to the refusal to cooperate expressed by the Islamic Republic of Iran, have guarantees that that State’s nuclear programme is being developed for exclusively peaceful purposes.

103.

As well as being designed to put pressure on the Islamic Republic of Iran to persuade it to fulfil its international obligations, the restrictive measures decided by the Security Council also seek, as is apparent from recital 21 in the preamble to Resolution 1929 (2010), to constrain Iran’s development of sensitive technologies in support of its nuclear and missile programmes.

104.

That resolution, as the previous ones, therefore emphasises the risk of proliferation presented by the Iranian nuclear programme ( 38 ) and the need to prevent that risk.

105.

The preventive measures laid down by Resolution 1929 (2010) include, in paragraph 21 of the resolution, as an extension of what was laid down by the previous resolutions, ( 39 ) the freezing of funds and economic resources in respect of which the States have information giving them reasonable grounds for thinking that they could contribute to Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems.

106.

The Court of Justice has unambiguously recognised the preventive nature of the restrictive measures taken against the Islamic Republic of Iran. In its judgment in Bank Melli Iran v Council, it stated that ‘[i]t is apparent from the recitals in the preamble [to Regulation No 423/2007] and from its provisions taken as a whole that the regulation is intended to prevent or slow down the nuclear policy of that State, in the light of the threat it poses, by means of restrictive economic measures’. ( 40 ) It noted that ‘it is not nuclear proliferation in general which is being combated, but the risks inherent in the Iranian nuclear proliferation programme’. ( 41 )

107.

In Afrasiabi and Others, ( 42 ) that Court of Justice held that ‘[i]t is clearly apparent from the terms both of Resolution 1737 (2006), in particular paragraphs 2 and 12 thereof, and of Common Position 2007/140/CFSP, [ ( 43 )] in particular recitals 1 and 9 in the preamble thereto, that the restrictive measures adopted against the Islamic Republic of Iran are intended to be preventive in that they seek to prevent a risk of proliferation-sensitive nuclear activities in that State’. ( 44 )

108.

It is interesting to note that the Court drew from that finding a direct conclusion regarding the interpretation of the concept of ‘economic resources’ within the meaning of Article 1(i) of Regulation No 423/2007. The Court therefore considered that, having regard to the preventive nature of the restrictive measures adopted against the Islamic Republic of Iran, ‘the relevant criterion, for the purposes of the application of that concept …, is whether there is a possibility that the asset in question may be used to obtain funds, goods or services capable of contributing to nuclear proliferation in Iran’ ( 45 ) For the purposes of interpreting Article 7(3) of Regulation No 423/2007, concerning the prohibition against making funds or economic resources available to persons and entities included in a list, the Court took into account the fact that an asset, within the meaning of Article 1(i) of that regulation, ‘entails in itself a danger that it may be diverted in order to support proliferation-sensitive nuclear activities in Iran’ ( 46 ) and pointed to the ‘potential for use [of a sintering furnace such as that at issue] in the manufacture of nuclear missile components and, therefore, for contributing to nuclear proliferation in Iran’. ( 47 )

109.

It seems to me that the Court of Justice should maintain that approach, which complies with the precautionary principle, and which consists, for interpreting the provisions of EU law concerning the freezing of funds, in focusing its reasoning on the preventive purpose of restrictive measures.

110.

Therefore, if the Court wishes to remain consistent with what it held in its judgment in Afrasiabi and Others, and give full effect to the repeated references to the preventive nature of the restrictive measures, it should, as I shall have the opportunity to explain below, consider that that preventive nature of the restrictive measures requires it to adapt its review, inter alia for the purpose of assessing whether a person or an entity is to be regarded as supporting nuclear proliferation.

111.

In order to prevent the risk of proliferation posed by the Iranian nuclear programme and increase pressure on the Islamic Republic of Iran, Resolution 1929 (2010) extended the scope of the earlier restrictive measures and laid down additional restrictive measures against that State.

112.

To that end, it identified several economic sectors whose activities are likely to contribute to proliferation-sensitive nuclear activities. Those sectors include, inter alia, the energy sector, and in particular the gas and petrol industry.

113.

Recital 17 in the preamble to Resolution 1929 (2010) clearly states why that sector is covered. The Security Council notes, in that recital, ‘the potential connection between [the Islamic Republic of Iran’s] revenues derived from its energy sector and the funding of Iran’s proliferation-sensitive nuclear activities’, and ‘that chemical process equipment and materials required for the petrochemical industry have much in common with those required for certain sensitive nuclear fuel cycle activities’.

114.

The energy sector of the Islamic Republic of Iran is therefore one of the sectors to which the restrictive measures apply, for the dual reason that it procures for that State revenues which may be used to finance proliferation-sensitive nuclear activities, and that the goods used by the petrochemical industry may be used to develop the Iranian nuclear programme.

115.

That sector is therefore particularly targeted by the restrictive measures owing to the risk which it poses in terms of nuclear proliferation.

116.

That reference to a high-risk situation inherent in the Iranian energy sector was repeated by the European Council in its conclusions of 17 June 2010, in which it requested the Council to adopt measures implementing those laid down in Resolution 1929 (2010) and ancillary measures. The sectors to which those measures were to apply include the ‘key gas and petrol sectors, with a ban on further investment, technical assistance and transfers of technologies, equipment and services linked to those sectors’. ( 48 )

117.

In accordance with those conclusions of the European Council, Article 4(1) of Decision 2010/413 provided that ‘[t]he sale, supply or transfer of key equipment and technology for [several key sectors] of the oil and natural gas industry in Iran, or to Iranian or Iranian-owned enterprises engaged in those sectors outside Iran, by nationals of Member States, or from the territories of Member States, or using vessels or aircraft under the jurisdiction of Member States shall be prohibited whether or not originating in their territories’.

118.

To supplement that measure, Decision 2010/413 also laid down measures to freeze the funds and economic resources of additional persons and entities, and further restrictions on trade in dual-use goods and technologies.

119.

Regulation No 961/2010 implemented the additional restrictive measures laid down by Decision 2010/413. Accordingly, in Annex VI, it provides a list of key equipment and technology for key sectors, listed in Article 8(2) of that regulation, of the oil and gas industry in Iran. It also specifies the scope of the additional restrictions on trade in dual-use goods and technologies, referring to Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items. ( 49 )

120.

Moreover, in view of the ‘specific threat to international peace and security posed by [the Islamic Republic of] Iran’, ( 50 ) the Council considered it necessary to amend the funds-freezing lists.

121.

That is the context in which Kala Naft was included on the list of persons and entities in Annex II to Decision 2010/413 and Annex VIII to Regulation No 961/2010. That context is characterised by a dual intention, namely, to put pressure on the Islamic Republic of Iran first, by paralysing a strategic sector which is, for that State, an important source of revenue which may potentially be used for the purposes of developing its nuclear programme.

122.

Secondly, in the light of the Security Council’s finding in Resolution 1929 (2010) of a similarity between the chemical process equipment and materials required for the petrochemical industry and those required for certain sensitive nuclear fuel cycle activities, and of the need to restrict trade in dual-use goods and technologies, the Union legislature intended to prevent the risk of goods and technologies intended for undertakings in the oil and gas industry being, in reality, diverted to the nuclear activities of the Islamic Republic of Iran. That intention is reflected not only in restrictions on trade in key equipment and technologies which may be used in the Iranian oil and gas industry, but also in the freezing of the funds and the economic resources of an entity such as Kala Naft, the activity of which consists in purchasing goods for undertakings active in that sector.

123.

I recall, in that regard, that Kala Naft has the object of acting as the central purchasing body for the oil, gas and petrochemical divisions of the NIOC’s group.

124.

In the judgment under appeal, the General Court set out reasons which disregard these contextual matters and do not take into account that it was to assess the legality of a preventive measure, not a repressive measure. The failure to take account of that backcloth led that Court to commit several errors of law.

125.

The obligation to inform the person or entity included on the list of the grounds for his inclusion is expressly laid down in Article 24(3) of Decision 2010/413, Article 15(3) of Regulation No 423/2007 and Article 36(3) of Regulation No 961/2010.

126.

In determining whether or not the reasons communicated to the listed person or entity were adequate, reference should be made to the Court’s settled case-law concerning the obligation to state reasons for EU acts. ( 51 ) In essence, the statement of reasons must enable the person concerned to ascertain the reasons for the measures and enable the court having jurisdiction to exercise its power of review. The statement of reasons must indicate the actual and specific reasons why the competent authority considered that a restrictive measure should be adopted in respect of the person concerned, in such a way that the statement allows the person concerned to understand the allegations made against him and to defend himself effectively by challenging the reasons relied on. Compliance with the obligation to state reasons must enable the person concerned to invoke effectively the legal remedies available to him in order to contest the legality of the decision to include him on the list.

127.

The requirements of a statement of reasons varies according to the nature of the act in question and the context in which it was adopted. Those requirements must be appraised by reference to the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the statement of reasons to specify all the relevant matters of fact and law, since the question whether the statement of reasons is adequate must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. ( 52 ) In particular, the reasons given for a measure adversely affecting a person are sufficient if it was adopted in circumstances known to that person which enable him to understand the scope of the measure concerning him. ( 53 )

128.

After referring to that case-law, the General Court, considering that the Council invoked three independent grounds, examined each of them separately. At the end of that examination, it concluded that the first two grounds were sufficient but considered that the third was insufficient.

129.

Consequently, in paragraph 80 of the judgment under appeal, it held that ‘[the plea alleging infringement of the obligation to state reasons] must be upheld so far as the third ground is concerned and therefore the contested measures must be annulled’. It then stated, in paragraph 81 of the judgment under appeal, that ‘[a]s the three grounds concerned are independent, that finding does not entail the annulment of the contested measures in so far as they introduce restrictive measures in relation to the applicant’, before stating that, ‘[h]owever, the third ground cannot be taken into consideration when the other pleas of the application are examined, particularly the eighth plea relating to erroneous assessment of the facts’.

130.

I note a contradiction between paragraphs 80 and 81 of the judgment under appeal, in that the General Court decided, in the former paragraph, to annul the contested measures in so far as the third ground is concerned before immediately reversing that conclusion in the latter paragraph.

131.

Even if moderated by paragraph 81 of the judgment under appeal, paragraph 80 of the judgment is open to criticism in that it states that the finding that one ground out of three is not sufficiently precise and specific constitutes an infringement of the obligation to state reasons. In my view, that conclusion is incorrect. It is necessary, on the contrary, to take the statement of reasons as a whole and to consider that, since at least one part of the statement of reasons may be regarded as sufficiently precise and specific, the obligation to state reasons is fulfilled.

132.

The statement of reasons must be regarded as sufficient if it enables the person or entity concerned to understand the reasons for its inclusion on the list and to challenge those reasons. In view of the preventive nature of the measures at issue, those reasons must show in what respect an activity, the conduct or the links of the designated person or entity are such as to contribute to the development of the Iranian nuclear programme. Moreover, the grounds must be understood in the light of the context in which the restrictive measures were adopted. It is important, in that regard, when assessing whether the statement of reasons is sufficient, to take into account the fact that that context is, where relevant, known to the designated person or entity.

133.

From the moment the statement of reasons for a restrictive measure, considered in the context in which that measure was adopted, identifies in a sufficiently precise and specific manner the risk posed by the activity, conduct or links of a designated person or entity in terms of nuclear proliferation, the requirement for a statement of reasons must be regarded as fulfilled.

134.

I must also express reservations regarding the method consisting in examining the grounds of the restrictive measures separately without relating them to each other. That method is likely to culminate in a biased and artificial result. While conceding that the third ground is not a model of precision, it seems to me that, according to whether it is assessed separately or in relation to the other grounds, the analysis may vary. Moreover, there too, the General Court should have taken account of the context in which Kala Naft’s funds and economic resources were frozen.

135.

In that regard, as I have explained in the foregoing arguments, it is not disputed that Kala Naft is structurally and functionally linked to the public undertaking NIOC, which is controlled by the Iranian State, and that its role is to act as the central purchasing body for the oil, gas and petrochemical divisions of the NIOC group. Moreover, the Security Council pointed out the potential connection between the Islamic Republic of Iran’s revenues derived from its energy sector and the funding of its proliferation-sensitive nuclear activities, and it alerted the States to the fact that chemical process equipment and materials required for the petrochemical industry have much in common with those required for certain sensitive nuclear fuel cycle activities.

136.

In my view, it is in the light of that context and of the other parts of the statement of reasons that it was necessary to assess whether the allegation that Kala Naft has links with the companies participating in the Iranian nuclear programme was sufficient.

137.

In the light of these considerations, I conclude unreservedly that the statement of reasons for the contested measures was sufficient, in that it enabled Kala Naft to understand, in the light of a situation of which it could not claim to be unaware, in what respect its activity, its conduct and the alleged links were likely to contribute to the development of the Iranian nuclear programme, and therefore to pose a risk in terms of nuclear proliferation.

138.

The General Court was therefore wrong to declare, in paragraph 80 of the judgment under appeal, that there had been an infringement of the obligation to state reasons.

139.

In paragraph 101 of the judgment under appeal, the General Court considered that the Council had infringed Kala Naft’s rights of defence by not replying to its request for access to the file. Since that circumstance was a priori likely to have affected that company’s defence before the Court, it resulted, according to the General Court, in an infringement of Kala Naft’s right to effective judicial protection. The General Court therefore annulled the contested measures in so far as they concern Kala Naft.

140.

I disagree with that analysis.

141.

In its letter of 12 September 2010, Kala Naft asked the Council to inform it ‘with a reasonable level of detail’ regarding the three grounds against it. Kala Naft therefore asked the Council for additional information in support of those grounds, information which the Council did not supply in its letter of 28 October 2010.

142.

It is apparent from Article 110 of the judgment under appeal, that, in its written pleadings before the Court, the Council had confirmed that its file did not contain evidence or information other than that reproduced in the statements of reasons for the contested measures, which must, moreover, be regarded as sufficiently precise and specific. In those circumstances, it cannot be alleged that the Council infringed Kala Naft’s rights of the defence and right to effective judicial protection by not communicating to it, in addition to the statement of grounds, information which it did not have. ( 54 )

143.

I now come to the question whether the Council was entitled to base its decision to adopt and then to retain that measure only on the information in its possession, namely the statement of reasons, read in the light of the context in which the restrictive measure at issue was decided, and the observations of Kala Naft. The General Court thought not. I do not agree with its analysis.

144.

The reasoning of the General Court should briefly be summarised.

145.

In the first place, the General Court considered that the first ground, alleging that Kala Naft trades in equipment for the oil and gas sector which may be used for the Iranian nuclear programme, did not reflect support for nuclear proliferation, within the meaning of Article 20(1) of Decision 2010/413, Article 7(2) of Regulation No 423/2007 and Article 16(2)(a) of Regulation No 961/2010. It took the view that ‘[t]he wording used by the legislature implies that the adoption of restrictive measures against an entity on account of the support which it has allegedly given to nuclear proliferation presupposes that it has literally done so previously. By contrast, if it has not actually done so, the mere risk that the entity concerned may provide support for nuclear proliferation in the future is not sufficient’. ( 55 )

146.

By so ruling, the General Court, in essence, validated the argument which Kala Naft put forward at first instance, namely that, in order to be regarded as constituting support for nuclear proliferation, the participation of a person or entity in the nuclear programme must be ‘actual and established, not only potential, or even possible’. ( 56 )

147.

Moreover, the General Court refused to take account of the fact that the Council is authorised, under Article 215(1) TFEU, to interrupt completely economic and financial relations with a third State or to adopt restrictive measures against specific sectors of that State.

148.

The General Court concluded that the contested measures should be annulled in so far as the first ground was concerned.

149.

Since the first ground was not regarded by the General Court, from the point of view of the legal classification of the facts, as well founded, it was only with regard to the second ground, alleging that Kala Naft attempted to purchase material (very hard-wearing alloy gates) used exclusively by the nuclear industry, that the General Court examined the material accuracy of the facts.

150.

To do this, it applied a standard of judicial review, summarising its structure and scale. Accordingly, it stated that it is apparent from the case-law that ‘the judicial review of the lawfulness of a measure whereby restrictive measures are imposed on an entity extends to the assessment of the facts and circumstances relied on as justifying it, and to the evidence and information on which that assessment is based. In the event of challenge, it is for the Council to present that evidence for review by the Courts of the European Union’. ( 57 )

151.

Applying that standard of review, the General Court concluded that, since the Council had not adduced evidence of the claims made in the second ground, the measures at issue should be annulled in so far as that ground was concerned.

152.

By reasoning in that way, the General Court, in my view, made an incorrect assessment of the substance of the statement of reasons for the contested measures.

153.

First of all, strictly from the point of view of method, the General Court carried out that assessment in two stages, in a rather surprising order. It first examined the seventh plea, alleging an error of law concerning the concept of involvement in nuclear proliferation, before examining the eighth plea, alleging an error in the assessment of the facts relating to the activities of Kala Naft. By doing so, the General Court examined the legal classification of the facts before examining the material accuracy of the facts, which does not seem to me to be the logical and traditional order of examining the pleas in an action for annulment.

154.

That approach is particularly open to criticism because it has a direct impact on the General Court’s assessment of the substance of the statement of reasons. It led that Court to separate artificially the different parts of the statement of reasons, in order, finally, to retain only the second part in its examination of the material accuracy of the facts. The General Court thus sought to ascertain the truth of the claim relating to an attempt to purchase very hard-wearing alloy gates used exclusively by the nuclear industry, although an examination of the reality of the facts focusing only on that attempt to purchase was not, in fact, appropriate, since the risk posed by Kala Naft in terms of nuclear proliferation was based on other facts, such as Kala Naft’s actual activity. The method used by the General Court therefore gave a biased result.

155.

Secondly, and more fundamentally, the assessments made by the General Court concerning the material accuracy and legal classification of the facts seems to me to be incorrect in that they take no account of the preventive nature of the funds-freezing measure taken against Kala Naft and of the context in which that measure was adopted.

156.

Thus, in order to verify the substance of the statement of reasons, that is to say, whether it could justify the restrictive measure taken against Kala Naft, the General Court should have taken an approach which was both pragmatic and complied with the precautionary principle, and taken into account the following parameters and contextual matters.

157.

In the first place, in view of the preventive nature of the funds-freezing measures, the European Union judicature must adjust the characteristics and scope of the review it carries out on the internal legality of those measures, in particular as regards the material accuracy and legal classification of the facts.

158.

The aim of preventive measures such as the funds-freezing measure at issue in the present case is to prevent the designated persons or entities having access to economic or financial resources that they may use to support proliferation‑sensitive nuclear activities or the development of nuclear weapon delivery systems

159.

Under paragraph 21 of Resolution 1929 (2010), those measures may be adopted if the competent authorities have information that provides reasonable grounds to believe that such economic or financial resources could contribute to those nuclear activities.

160.

On the basis of the evidence available to them, the competent authorities are therefore prompted to take the measures they consider necessary to prevent a risk materialising; in the present case that risk is constituted by the potential use of economic or financial resources for the Iranian nuclear programme.

161.

Those measures are by no means intended to penalise conduct which it has been shown, on the basis of evidence, actually helps to support that programme. In other words, the adoption of preventive measures does not require evidence that economic or financial resources are actually used for the Iranian nuclear programme. It is sufficient that the competent authority has adequate proof that such a risk exists.

162.

Accordingly, the measure to freeze funds and economic resources directed against Kala Naft was not intended to punish specific purchases of goods proved to have actually been used for nuclear proliferation, but to prevent such purchases.

163.

The prevention of a risk cannot therefore be equated to the punishment of a infringement already committed. The European Union judicature must therefore adjust its review depending on whether it is called upon to assess the legality of measures in one or the other category.

164.

This major difference between preventive and repressive measures must therefore be reflected in the standard of review conducted by the European Union judicature and in its assessment of the contribution of a person or entity to the Iranian nuclear programme.

165.

The finding that restrictive measures have a considerable impact on the rights and freedoms of the persons or entities concerned ( 58 ) does not, in my view, justify bringing the judicial review of preventive measures into line with that of repressive measures, because that, as the recent case-law of the General Court shows, would quite simply prevent the adoption of a measure such as that at issue in the present case.

166.

Such a finding requires, on the contrary, that the existence of a risk is sufficiently established by the competent authority. However, that does not need evidence of the actual use of economic or financial resources for the Iranian nuclear programme to be adduced. The existence of a risk may, as the present case clearly illustrates, emerge from a series of objective factors which, taken together, make that risk sufficiently perceptible.

167.

In the second place, in order to assess the validity of a restrictive measure such as that at issue in the present case, the European Union judicature must take account of the context in which it was adopted.

168.

I would observe that, in this case, that context is characterised by the intention of the Security Council, taken up by the European Council and then by the Council, to increase pressure on the Islamic republic of Iran by paralysing the financial resources provided by its energy sector and preventing goods intended for the petrochemical industry being diverted to the Iranian nuclear programme.

169.

These contextual matters are, above all, the expression of a political decision, namely, a decision to target more particularly, at a given time, the Iranian energy sector, because the political authorities consider that that sector poses a particular risk in the fight against nuclear proliferation.

170.

In the third place, the European Union judicature must bear in mind that the definition of the categories of persons and entities targeted by the restrictive measures derives from that political decision. The Council must therefore be accorded a wide discretion in the assessment it makes, on the basis of the grounds provided to it by the Member State proposing inclusion or by the High Representative of the Union for Foreign Affairs and Security Policy, ( 59 ) as to whether there is a sufficient risk.

171.

That wide discretion which the Council must enjoy is based on the political and complex nature of the assessment of the risk of nuclear proliferation, which must be carried out in compliance with the precautionary principle. That discretion must, in my view, be reflected in a review which is adjusted by the European Union judicature in so far as concerns the material accuracy of the facts and their legal classification.

172.

The European Union judicature must therefore, when carrying out its review, take care not to exceed the threshold which would lead it, as a result inter alia of unduly strict evidential requirements, to replace the assessment of the competent authority with its own.

173.

Specifically, the European Union judicature must carry out its review of the legality of a funds-freezing measure such as that at issue in the present case, on the basis of all of the information it has, namely, the statement of reasons for inclusion on the list and, if appropriate, the observations of the person or entity included and also those submitted in reply by the Council. It must also, taking a pragmatic approach, take into account the information provided during the judicial proceedings which may help to refine its understanding of the risk identified and therefore its assessment of the sufficiency of the measure.

174.

In order to take into account the wide discretion enjoyed by the Council, and to take an approach which complies with the precautionary principle, the European Union judicature must verify, in the light of the arguments put forward during the administrative proceedings and the subsequent judicial proceedings, whether the Council’s assessment as to the existence of a risk is not manifestly incorrect. In my view, it is only if the European Union judicature, on the basis of the evidence available to it, considers that a risk is wholly inconceivable that the restrictive measure submitted for its assessment may be challenged. That may apply, for example, if the hearings held during the administrative and/or judicial proceedings have revealed that a finding of fact on which the restrictive measure was based was materially incorrect.

175.

It was by taking into account the preventive nature of the funds-freezing measure against Kala Naft and the context in which it was adopted, with the resulting consequences regarding the characteristics and scope of its judicial review, that the General Court should have assessed the substance of the statement of reasons for that measure. Keeping these factors in mind, it should have asked itself the following two questions.

176.

First, in the light of the information available to the General Court, that is to say, the statement of grounds, Kala Naft’s observations contained in its letter of 12 September 2010, the Council’s reply contained in its letter of 28 October 2010, and the exchanges which took place during the proceedings before that Court, was the General Court in a position to find that the risk posed by Kala Naft in terms of nuclear proliferation was sufficiently established?

177.

Second, if the answer to the first question is in the affirmative, could Kala Naft be regarded as supporting nuclear proliferation within the meaning of the relevant provisions of the measures at issue?

178.

As regards the first question, the General Court had factual evidence which was not disputed, namely the existence of structural and functional links between Kala Naft and the NIOC, the very object of Kala Naft’s activity consisting, it should be recalled, in acting as the central purchasing body for the oil, gas and petrochemical divisions of the NIOC’s group. Moreover, as is apparent from paragraph 77 of the judgment under appeal, the fact that the goods purchased by Kala Naft belonging to the gas, oil and petrochemical sectors could be used for the purposes of nuclear proliferation was known to that company and expressly admitted to be the case in its written pleadings.

179.

Moreover, as regards more specifically the purchase of very hard-wearing alloy gates, Kala Naft claimed, as is shown in paragraph 121 of the judgment under appeal, that, ‘contrary to the Council’s declaration in the statements of reasons for the contested measures, the gates which it procures are not used exclusively by the nuclear industry, but also in the gas, oil and petrochemical sectors’. Although Kala Naft thus denies, when faced with the Council’s allegations, that those gates are used exclusively by the nuclear industry, it does not, however, deny that they may be used for it. On the contrary, it concedes that they may be, as is shown by paragraphs 77 and 121 of the judgment under appeal, read together. Moreover, it acknowledged, with an order form to support its assertion, that it regularly purchased that type of gate.

180.

Since the risk posed by Kala Naft in respect of the fight against nuclear proliferation was, on the basis of all of that information, sufficiently established, the General Court should have rejected as unfounded the eighth plea, alleging an error of assessment of the facts relating to the activities of Kala Naft, even though the Council had not adduced evidence that it attempted to acquire very hard‑wearing alloy gates used exclusively by the nuclear industry.

181.

With regard, now, to the second question relating to the legal classification of the facts, I consider that the General Court gave too restrictive a definition of the concept of support for nuclear proliferation, within the meaning of Article 20(1)(b) of Decision 2010/413, Article 7(2)(a) of Regulation No 423/2007 and Article 16(2)(a) of Regulation No 961/2010.

182.

The General Court considered that it was insufficient, in order to characterise the existence of support for nuclear proliferation, that Kala Naft posed a particular risk of being involved owing to its position as the central purchasing body of the NIOC group.

183.

In order to interpret that concept, the General Court should have taken into account the wording and purpose of the relevant resolutions of the Security Council, in particular Resolution 1929 (2010). ( 60 ) Since, as I have pointed out above, that resolution, like the earlier ones, is designed to prevent the risk of nuclear proliferation, the concept of support for nuclear proliferation must be interpreted in accordance with that aim. That concept of support is, moreover, sufficiently broad to be given an interpretation consistent with that objective of preventing the risk of nuclear proliferation.

184.

In order to prevent such a risk materialising, it is necessary to neutralise the activities, conduct and relationships of persons and entities which the States have reasonable grounds for believing may, if restrictive measures are not applied, contribute to the development of the Iranian nuclear programme.

185.

From that point of view, for a person or entity to be recognised as supporting nuclear proliferation, it is sufficient if, by reason of its activity, conduct and/or links, that person or entity may be likely to contribute to the Iranian nuclear programme.

186.

In other words, if the Council has reasonable grounds for believing, on the basis of sufficiently precise and specific claims, that a person or entity poses a risk to the fight against nuclear proliferation, it may consider that that person or entity provides support for nuclear proliferation within the meaning of the relevant provisions of the contested measures.

187.

In the present case, the possibility, inferred from objective information and acknowledged by Kala Naft, that the goods which it acquires, in particular very hard-wearing alloy gates, may be used for the purposes of nuclear proliferation, is sufficient for the purpose of determining the existence of support for such proliferation.

188.

As the central purchasing body of the NIOC, Kala Naft purchases goods needed by the oil, gas and petrochemical industry. What the restrictive measure taken against that company seeks to prevent is specifically the purchase of goods which are used in those industries, because those goods may potentially be used in connection with the Iranian nuclear programme. Moreover, Kala Naft has no control over or knowledge of the final destination or use made of those goods.

189.

The requirement stated by the General Court in paragraphs 113 and 115 of the judgment under appeal for specific conduct on the part of Kala Naft goes against the preventive aim of the funds-freezing measures. If we follow the reasoning of the General Court and that of that company both before the General Court and the Court of Justice, it would be necessary, in essence, for the company to be recognised as providing support for nuclear proliferation, for evidence to be adduced that it has purchased gates actually used for the Iranian nuclear industry.

190.

I am firmly opposed to that argument, because it would lead to the absurd result that the adoption of a preventive measure such as that at issue in the present case, the purpose of which, I recall, is to prevent economic and financial resources contributing to the nuclear activities of the Islamic Republic of Iran, would have to be subject to evidence that that contribution had indeed been made.

191.

Moreover, in view of the secrecy of the nuclear programme developed by the Islamic Republic of Iran, it would be unrealistic to require the Council to adduce evidence that the gates purchased by Kala Naft were actually used by the Iranian nuclear industry, although, at the same time and as it has confirmed before the Court of Justice, Kala Naft itself cannot verify the final use to which those gates are put.

192.

Apart from the difficulty, if not the impossibility, of adducing such evidence in that atmosphere of secrecy, and without even mentioning the problems posed by the delicate balance between the preservation of the necessary confidentiality of information and the conduct of judicial proceedings in compliance with the audi alteram partem rule, this Court must also question the expediency of that evidential requirement.

193.

As I have pointed out in my earlier arguments, the reason for the restrictive measures under consideration lies in the refusal of the Islamic Republic of Iran to cooperate with the IAEA and, more generally, to comply with its international obligations in respect of nuclear non-proliferation. The ensuing atmosphere of secrecy is mainly the consequence of that State’s objection to IAEA inspectors carrying out investigations to establish that the Iranian nuclear programme has only peaceful objectives. The secrecy concerning the characteristics and scope of that programme is therefore clearly the result of a choice made by the Islamic Republic of Iran.

194.

On the basis of that finding, one might wonder whether, in terms of reciprocity, it is appropriate to ask the Council for more and more detailed information when, at the same time, the Islamic Republic of Iran refuses the repeated requests for information from the Security Council and the IAEA? Moreover, is it really reasonable to require the Council, and therefore the Member States, by demanding a high degree of evidence, to reveal sources of information and methods of obtaining it, even though that is the only means that the States have of piercing the opacity in which the Islamic Republic of Iran develops its nuclear programme and to prevent the threat it constitutes?

195.

It is with those thoughts in mind and on the basis of all the foregoing considerations that I suggest that the Court shall set aside the judgment under appeal.

196.

If the Court decides to give a ruling itself on Kala Naft’s action for annulment, I suggest, for the reasons I have set out, that it declare unfounded the pleas alleging infringement of the obligation to state reasons, infringement of Kala Naft’s rights of the defence and right to effective judicial protection, error of assessment of the facts relating to that company’s activities and error of law with regard to the concept of support for nuclear proliferation. The Court should, therefore, dismiss the action.

197.

In the light of all of the foregoing considerations, I propose that the Court should: