EU Courts and Iran Sanctions

This is a good new piece reviewing the wave of court judgments in the EU striking down designations of individuals and businesses for financial sanctions, in implementation of UN Security Council resolutions.  The basic problem is that the EU governments are unwilling to furnish evidence for these designations, and even when they do, as in judicial proceedings in the UK, the evidence is found to be lacking.

This is essentially the same basis on which the EU courts, even more famously, have struck down designations of individuals for sanctions in implementation of UN Security Council decisions regarding terrorism. The Kadi case is one of the leading cases in this area. My friend Antonios Tzanakopoulos has written a couple of great pieces on the Kadi cases (see here and here), including the final judgment on the appeal of the EU governments, which was just handed down a few days ago.

In all of these cases, the EU courts are being consistent in their protection of the rights of the designees, based in fundamental principles of due process. No one should be subject to legal action by a government depriving them of life, freedom, or property, without due process of law, which includes having the evidence against them presented and reviewed by a court, and subject to proper evaluation for both soundness and sufficiency.  The plea by governments of the necessity of secrecy of sources of evidence cannot and must not be allowed to overcome this basic requirement of any developed legal system.

In summary, the Security Council can’t just point its finger at anyone it decides to, and have those individuals and businesses financially sanctioned in domestic courts in the EU. Fortunately, the EU requires proper due process for legal sanction, and so far EU governments have in many cases failed to meet this requirement in both the Iran sanctions and terrorism sanctions contexts.

I only wish US courts held US government action to such high standards.


12 Comments on “EU Courts and Iran Sanctions”

  1. yousaf says:

    For us non-lawyers, could you elaborate on why EU courts can step into this issue whereas US courts cannot (or don’t seem to want to…) ?

    • Cyrus says:

      There are a variety of reasons starting with the difference in constitutional stucture but more specifically, any such lawsuit brought in the US would be stymied by the “State Secrets” privilege, which once invoked by the govt effectively ends any litigation against it since it bans the introduction of any evidence which may compromise national security — and the judge is generally not legally allowed to second-guess that. The potential for abuse of the National Security Privilege is obvious, even from the “rest of the story” in the case that first led to the recognition of this principle by the courts….since it turned out that the “secret” that the govt had tried to protect was just an embarrasing fact and not a national security secret at all.

      (The above was not intended as legal advice)

  2. Dan Joyner says:

    This article, from pgs. 890-899, talks specifically about constitutional (including due process) challenges against OFAC sanctions in the US.

    Click to access 49_849-913.pdf

    The bottom line is they just don’t ever work. Probably the biggest reason is the sliding scale of due process standard that the US uses. You only get the process that is due under the specific circumstances. So when it comes to sanctions for things like terrorism and Iran, US courts typically find that the process due is very limited because the countervailing government interest is so compelling. That’s another way of saying that people have due process rights – unless its in a really important issue area. Then not so much.

  3. Cyrus says:

    I only wish that national courts in Europe were as protective of rights. THe Belgians preferred to amend their laws that gave Beglian courts universal jurisdiction over human rights atrocities rather than to indict Sharon or Rumsfeld (Rumsfeld’s threats to kick Belgium out of Nato worked) and the French legal system decided that Rumsfeld and friends enjoy life-time immunity for war crimes prosecution by virtue of “Head of State Immunity” thus going against established international law. Spain and Germany simply dropped any investigation against Bush and Rumsfeld.,-dismisses-torture-comp

  4. masoud says:

    Personally, I’m shocked that such laws could even be suggested in passed in a modern country. Can anyone point out any difference between this kind of sanction legislation and the medieval bills of attainder that supposedly went out of fashion about two centuries ago?

  5. Don Bacon says:

    The EU courts must be aware that the sanctions cut two (at least) ways, affecting buyers and sellers. And the illegal US economic sanctions on Iran have had a large effect on the European companies that had Iran as an important buyer.

    recent news reports:

    PSA Peugeot Citroen (UG), Europe’s second-biggest carmaker, reported a 9.8 percent drop in first-half vehicle sales because of slumping demand in its home region and the end of component-kit deliveries to Iran.

    French giant carmaker Renault says its profits have plunged after US-engineered sanctions against Tehran led to a halt in its activities in Iran. The auto group said the stoppage resulted in a loss of 249 million euros from a profit of 519 million euros last year.

    So Iran is re-orientating away from Europe and toward the Orient. That’s where the growth is, not in Europe, so it’ll work out all right. Just take a little time. Meanwhile Iran is increasing domestic capability, and has a good trade balance. Hey – maybe sanctions on the US would be good.

  6. Don Bacon says:

    Iran 2012 oil export revenues fell 12%, according to a recent OPEC report. This doesn’t include Iran’s barter arrangements for oil sales.

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