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People’s Mojahedin Organization of Iran v Council of the European Union, 4 December 2008 [ECJ]

Case T-284/08

Background to the case

1  For an account of the earlier background to the present dispute reference is made to the judgments in Case T‑228/02 Organisation des Modjahedines du peuple d’Iran v Council [2006] ECR II‑4665 (‘the OMPI judgment’), paragraphs 1 to 26, and Case T‑256/07 People’s Mojahedin Organization of Iran v Council [2008] ECR II‑0000 (‘the PMOI judgment’), paragraphs 1 to 37. 

2   By judgment of 7 May 2008, the Court of Appeal of England and Wales (United Kingdom) (‘the Court of Appeal’) dismissed the application of the Secretary of State for the Home Department (‘the Home Secretary’) for permission to appeal to that court against the decision of 30 November 2007 of the Proscribed Organisations Appeal Commission (United Kingdom) (‘the POAC’) by which it had allowed an appeal against the Home Secretary’s decision of 1 September 2006 refusing to lift the proscription of the People’s Mojahedin Organization of Iran (‘the applicant’ or ‘the PMOI’) as an organisation concerned in terrorism and ordered the Home Secretary to lay before the United Kingdom Parliament the draft of an Order removing the applicant from the list of organisations proscribed in the United Kingdom under the Terrorism Act 2000. 

3   In that decision, the POAC inter alia described as ‘perverse’ the Home Secretary’s conclusion, in his decision of 1 September 2006 refusing to lift the applicant’s proscription, that the applicant was, at that period, still an organisation ‘concerned in terrorism’ within the meaning of the Terrorism Act 2000. According to the POAC’s assessment, the only belief that a reasonable decision maker could have honestly entertained, whether as at September 2006 or thereafter, was that the PMOI no longer satisfied any of the criteria necessary for the maintenance of their proscription. In other words, on the material before it, the POAC found that the PMOI was not at the time of its decision and had not been, as at September 2006, concerned in terrorism (see the PMOI judgment, paragraphs 168 and 169). 

4   It appears from the POAC decision (paragraph 10) that the said material included some elements of information relating to events concerning the PMOI which had occurred in France. In particular, the POAC mentioned the fact that on 17 June 2003 the offices of the National Council of Resistance of Iran (NCRI) near Paris were raided, that a large number of NCRI members were arrested, some of whom were remanded in custody, but that, although a substantial sum of money was found at the premises, no prosecutions were brought. 

5   In its judgment, the Court of Appeal upheld the POAC’s findings and moreover stated that the closed material adduced by the Home Secretary reinforced the Court of Appeal’s conclusion that the Home Secretary could not reasonably have considered that the PMOI intended in future to revert to terrorism. 

6   By order of 23 June 2008, which entered into force on 24 June 2008, the Home Secretary therefore removed the PMOI’s name from the list of organisations proscribed under the Terrorism Act 2000, and this was approved by both Houses of Parliament in the United Kingdom. 

7   By Council Decision 2008/583/EC of 15 July 2008 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Decision 2007/868/EC (OJ 2008 L 188, p. 21) (‘the contested decision’), the Council nonetheless maintained, with others, the applicant’s name on the list in the Annex to Council Regulation (EC) No 2580/2001 of 27 December 2001 adopting restrictive measures directed against certain persons and entities with a view to combating terrorism (OJ 2001 L 344, p. 70) (‘the disputed list’). 

8   Recital 5 in the preamble to the contested decision which, it is common ground, refers to the PMOI, states: 

‘In the case of one group, the Council has taken account of the fact that the decision by a competent authority on the basis of which the group was included on the list has not been in force since 24 June 2008. However, new information concerning the group has been brought to the Council’s attention. The Council considers that this new information warrants the group’s inclusion on the list.’ 

9   The contested decision was notified to the applicant under cover of a letter from the Council dated 15 July 2008 (‘the letter of notification’). In that letter, the Council stated, in particular, the following: 

‘the Council has again decided to include [the PMOI] on the list … The Council has taken note of the fact that the competent authority decision which served as a basis for including [the PMOI] on the list is no longer in force as of 24 June. However, the Council has been provided with new information relevant to this listing. Having considered this new information, the Council has decided that [the PMOI] should still be included on the above-mentioned list. Therefore, the Council has amended the statement of reasons accordingly.’ 

10  In the statement of reasons enclosed with the letter of notification (‘the statement of reasons’), the Council stated the following: 

‘The [PMOI] is a group formed in 1965 with the initial aim of overthrowing the imperial régime. Its members participated in the elimination of several thousand ‘agents’ of the old régime and were among the leaders in the taking of hostages at the US Embassy in Teheran. Although initially one of the most radical groups of the Islamic revolution, after being banned the PMOI went into hiding and carried out a number of attacks against the régime in place in Iran. The organisation was behind terrorist attacks, for instance the attack on the headquarters of the Party of the Islamic Republic on 28 June 1981, killing more than a hundred of the most senior members of the régime (ministers, parliamentarians, high-level officials), and the assassination on 30 August 1981 of President Rajai and his Prime Minister Javad Bahonar. In April 1992 the PMOI carried out terrorist attacks on Iranian diplomatic representations and installations in 13 countries. During the presidential campaign in 1993, the group openly claimed responsibility for attacks against oil installations, including Iran’s largest refinery. In April 1999 the PMOI claimed responsibility for the assassination of Ali Sayyad Shirazi, the deputy chief of the Iranian Armed Forces General Staff. In 2000 and 2001 the organisation claimed that its members were involved in hit-and-run raids against the Iranian military and government buildings near the Iran-Iraq border and on 5 February 2000 carried out mortar attacks on official buildings in Teheran. Members of this organisation, located in various Member States of the European Union, are moreover currently being prosecuted for criminal activities aimed at funding their activities. These acts fall within Article 1(3), points (a), (b), (d), (f), (g), (h) and (i) of Common Position 2001/931/CFSP, and were committed with the aims set out in Article 1(3), points (i) and (iii) thereof. 

The [PMOI] falls within Article 2(3) (ii) of Regulation (EC) No 2580/2001.

In April 2001, the anti-terrorist prosecutor’s office of the court of first instance [sic] of Paris opened a judicial inquiry into the charges of ‘criminal associations for the preparation of terrorist acts’ as provided for under French law by Act No 96/647 of 22 July 1996. The investigations conducted in the course of that judicial inquiry resulted in the targeting of alleged members of the [PMOI] for a series of offences all having a principal or subsidiary link with a collective undertaking whose aim is to seriously disrupt public order through intimidation or terror. In addition to the aforementioned criminal offence, the inquiry also focused on the ‘financing of a terrorist group’ as provided for under French law by Act No 2001/1062 of 15 November 2001 on security in everyday life. 

On 19 March 2007 and 13 November 2007, the Paris anti‑terrorist prosecutor’s office brought supplementary charges against alleged members of the PMOI. These proceedings were prompted by the need to enquire into further elements arising from the investigations conducted between 2001 and 2007. They particularly focused on the charges of ‘laundering the direct or indirect proceeds of fraud offences against particularly vulnerable persons and organised fraud’ having a link with a terrorist undertaking as provided for under French law by Act No 2003/706 of 2 August 2003. 

A decision in respect of the [PMOI] has therefore been taken by a competent authority within the meaning of Article 1(4) of Common Position 2001/931/CFSP. 

The Council notes that these proceedings are still in progress and were given wider scope in 2007 as part of the combating of financing operations conducted by terrorist groups. The Council is satisfied that the reasons for including it on the list of persons and entities subject to the measures set out in Article 2(1) and (2) of Regulation (EC) No 2580/2001 remain valid. 

Having considered these elements, the Council has decided that the [PMOI] should continue to be subject to the measures set out in Article 2(1) and (2) of Regulation (EC) No 2580/2001.’ 

...

24   In support of its claim for annulment of the contested decision, the applicant advances, in essence, five pleas in law. The first alleges a manifest error of assessment of the evidence. The second alleges breaches of Article 1(4) of Common Position 2001/931 and of Article 2(3) of Regulation No 2580/2001 and a failure to discharge the burden of proof. The third alleges breach of the applicant’s right to effective judicial protection. The fourth alleges breach of the rights of the defence and of the obligation to give reasons for a decision. The fifth alleges abuse or misuse of powers or procedures. 

25   In its observations lodged at the Court Registry on 5 November 2008, the applicant advances a sixth plea in law, alleging breach of an essential procedural requirement. The Court considers that this new plea in law is admissible. First, it is based on matters of law or of fact which came to light in the course of the procedure, within the meaning of Article 48(2) of the Rules of procedure. Second, and in any event, this plea in law raises a matter of public policy since it is based on a breach of an essential procedural requirement affecting the conditions for the very adoption of the contested Community act. 

26   It is appropriate to begin by examining this sixth plea in law, then the fourth plea and finally, the second and third pleas together. 

 The sixth plea in law, alleging breach of an essential procedural requirement

27   In its written observations on the first seven documents provided by the Council in compliance with the Court Order of 26 September 2008, lodged at the Court Registry on 5 November 2008, the applicant advances, inter alia, a new plea in law, alleging the irregularity of the voting process, within the Council, on all draft Community decisions in relation to the freezing of assets. 

28   In support of this plea in law, the applicant refers to a statement made on 22 July 2008 by Lord Malloch-Brown, Minister of State to the Foreign and Commonwealth Office of the United Kingdom (‘the Minister of State’) to the House of Lords. More particularly, answering a question as to the reasons why the United Kingdom government had abstained during the vote in the Council on 15 July 2008 which led to the adoption of the contested decision, instead of opposing the continued inclusion of the applicant in the disputed list, in the light of the POAC decision and the subsequent judgment of the Court of Appeal, the Minister of State stated the following, according to the official Hansard transcript: 

‘We were determined to respect that court decision, which is why we were not able to support the [French] Government who brought to the table new information that had not been available earlier, on the basis of which they were able to persuade many Governments of Europe to support them. As to why we abstained rather than opposing the listing, the difficulty is that it is a total list with all terrorist organisations on it, and you have to vote up or down on that list. We were therefore faced with the unpalatable situation that either the old list would be retained, which would have done no good because the PMOI would have remained on it, or we would have been left with no listed terrorist organisations in Europe. We felt that was an unacceptable threat to the people of Britain as well as the rest of the Continent’. 

29  The applicant contends that not allowing Member States the possibility of voting against including a particular organisation in the disputed list, assuming that was indeed the case, is wholly contrary to the appropriate Community legislation and the duty on the Council and Member States to evaluate in detail and individually whether there are grounds for keeping the organisation in question on the disputed list. The applicant further contends that it appears from the statement of the Minister of State that, had the United Kingdom been able to vote on individual organisations, this Member State (and, it believes, some other Member States) would have voted against its continued inclusion in the disputed list. Thus there would not have been the necessary unanimity required by Regulation No 2580/2001, which would necessarily have led to its withdrawal from the disputed list. 

30  By this plea in law, the applicant contends, in essence, that for the Council to proceed by means of an overall vote on the whole list, without providing for the possibility of a vote on particular individuals or organisations, when periodically re-examining Community fund-freezing measures, vitiates so seriously the entire decision-making process leading up to the adoption of those measures, that it has to be considered as a misuse both of powers and of procedures, a violation of an essential procedural requirement and a violation of Article 2(3) of Regulation No 2580/2001 and of Article 1(6) of Common Position 2001/931. In the light of those allegations, the Court adopted the measures of organisation of the procedure referred to at paragraphs 17 and 18 above. 

31  In its written observations lodged at the Court Registry on 21 November 2008, however, the Council maintains that, when reviewing at regular intervals and at least once every six months the names of persons and entities on the disputed list, as provided for by Article 1(6) of Common Position 2001/931, each member of the Council has the right to express itself on all of the entries on the list individually and to indicate its position in relation to all or any of those entries. The Council adds that each entry on the disputed list must be agreed by unanimity, so that, if a Member State opposes the continued inclusion of a particular individual or group on the list, then the necessary unanimity for continuing to include that individual or group does not exist. As evidence for its allegations, the Council relies on the outcomes of proceedings of the meetings of the Council’s working group on Common Position 2001/931 (‘the CP 931 working group’) on 2 and 24 June and 2 July 2008, attached as annexes 1, 3 and 4 to its answer of 10 October 2008 to the Court Order of 26 September 2008. 

32  In its written observations on the factual assertions made by the applicant, in relation to the procedure leading to the adoption of the contested decision, lodged at the Court Registry on 20 November 2008, the United Kingdom merely submits that ‘given the request [of the Court] relates to the conduct of members of the Council in their capacity as members of that institution, the Council itself is best placed to address any points relating to the adoption of legislation within the Council’. 

33  In such circumstances, and whatever the meaning and scope to be attributed to the statement made by the Minister of State to the House of Lords on 22 July 2008, the Court can only find, in the light of the documents on the Court file, that there is no objective evidence making it possible to uphold the applicant’s allegation that the Member States within the Council are constrained to vote ‘up or down’ on a ‘total list’, without being offered the possibility to take a position individually, case by case, on the question whether the inclusion or maintenance of a particular person or entity on the disputed list is, or remains, justified. 

34  On the contrary, the documents produced by the Council show that such reviews on a case by case basis do occur within the CP 931 working group. More particularly, the outcomes of proceedings of the meeting of the said CP 931 working group on 2 July 2008 show that the Member States delegations were granted an extension of time, expiring on 4 July 2008, to indicate whether ‘[i]n the light of the further additional information provided by a Member State and the revised statement of reasons wich had been circulated’, they had ‘any objection to one group being listed on the new basis proposed’. Since that reference obviously concerned the specific case of the applicant, it is clear that the Member States retained the possibility to oppose its continued listing but that they ultimately chose not to make use of that possibility. 

35   It follows from the foregoing that the sixth plea in law must be rejected as unfounded. 

 The fourth plea in law, alleging breach of the rights of the defence

36   It is common ground that the Council adopted the contested decision without first informing the applicant of the new information or new material in the file which, in its view, justified maintaining it on the disputed list, namely, that relating to the judicial inquiry opened in April 2001 by the anti-terrorist prosecutor’s office of the Tribunal de grande instance of Paris and to the supplementary charges brought in March and November 2007. A fortiori, the Council did not enable the applicant to effectively make known its view of the matter, prior to the adoption of the contested decision. 

37   As regards the rights of the defence, it is therefore clear that the contested decision was adopted in disregard of the principles stated by the Court in the OMPI judgment (see, in particular, paragraphs 120, 126 and 131). 

38   The Council submits, however, first, that the considerations expressed by the Court in paragraph 131 of the OMPI judgment as regards subsequent decisions to freeze funds do not take account of the particular situation in which the Council found itself in the present case. The Court presupposed, in that case, that the decision of a competent national authority which formed the basis for the initial decision to freeze funds would remain in force, without addressing the possibility that such decision might be revoked or withdrawn, in circumstances where the Council has nevertheless received new information justifying the continued inclusion of the party concerned on the disputed list. That was the case, in June 2008, in relation to the applicant. In the circumstances of the present case, the Council considered that the public interest objective pursued by the Community, pursuant to United Nations’ Security Council Resolution 1373 (2001), could be attained only by the immediate replacement of the decision then in force by a new Council decision relying on the new information which had just been urgently considered. The Council submits that, by so doing, it struck the only balance possible between the need to take due account of the fact that the decision of the competent national authority which formed the basis of the initial decision to freeze the applicant’s funds had been withdrawn, and the need to ensure that those funds remained frozen in the light of the new information made available to the Council which, in its view, warranted the continued application of the restrictive measures concerning the applicant. It adds that any interruption in the application of those measures would have immediately afforded the applicant the opportunity to gain access to its funds, which would have rendered the contested decision ineffective. In the Council’s submission, nothing in the OMPI judgment suggests that, in view of the special circumstances of the case, it was not entitled to act as it did. 

39   The Court finds that the Council’s arguments totally fail to substantiate its claim that it was impossible for it to adopt the contested decision under a procedure that would have respected the applicant’s rights of the defence. 

40   More specifically, the alleged urgency is by no means established. Even assuming that the Council was not under an immediate duty to remove the applicant from the disputed list following the POAC decision of 30 November 2007, the possibility for the Council to continue to rely on the Home Secretary’s decision which had served as a basis for the initial decision to freeze the applicant’s funds came to an end as of 7 May 2008, when the Court of Appeal gave its judgment. Between that date and the date of adoption of the contested decision, more than two months lapsed. The Counci back

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