Legal Journals

European Court Annuls Iranian Fund Freeze Order

By jruby

On October 23, the Court of First Instance of the European Communities annulled the December 2007 renewal of an order of the EU Council freezing the assets of the People’s Mojahedin Organization of Iran (PMOI). The Court found that there was insufficient legal justification for the order. It doing so, it relied on a 2007 British decision removing the PMOI from a list of organizations concerned with terrorism. According to the Court, the Council had failed to provide additional evidence to justify keeping the PMOI’s funds frozen.

Under the authority of a December 2001 regulation, the Council can freeze the funds of organizations involved in terrorism. Since May 2002, the Council has identified the PMOI as one such organization. The PMOI, a pro-democracy movement founded in 1965, claims to have ceased military operations in 2001. It has repeatedly litigated the Council’s decision to freeze its assets. In December 2006, the organization won an annulment of the Council’s decision on the basis of procedural and evidentiary defects. The Council renewed the freeze order and remedied these defects.

Although the Court approved of the Council’s procedural remedies, it still invalidated the December 2007 freeze order. The Court cited an November 2007 British Proscribed Organisations Appeal Commission (POAC) decision ordering the Home Secretary to remove the PMOI from its list of proscribed organizations concerned with terrorism. POAC called classifying the PMOI as a terrorist organization “perverse” and “unreasonable.” Given this forceful declaration by a competent national authority on the same evidence before the Council, the Court reasoned, the Council’s assertion that the Home Secretary intended to appeal the decision did not constitute sufficient grounds to maintain the freeze order. The Court also noted that the Home Secretary cannot appeal POAC’s findings of fact, thus requiring the Council to submit additional evidence beyond what POAC considered in order to justify continuing to freeze the PMOI’s assets.

The Council reaffirmed the decision to freeze the PMOI’s funds in July 2008, citing the availability of new information. A PMOI challenge to that decision is still pending.

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Full post as published by Harvard International Law Journal Digest on October 28, 2008 (boomark / email).