Soon after the imposition of sanctions against Iranian individuals and entities by the Council of Europe, the European courts (the General Court of the European Union and the European Court of Justice) were called upon by Iranian plaintiffs to review the conformity of the sanctions with the fundamental principles of EU law.
The complainants said the restrictions contradict several principles of the EU law, i.e. the right to property of the listed persons, the right to be informed before the imposition of restrictive measures, the right to defense and the principle of proportionality. European courts in some cases ruled against the imposition of sanctions and accordingly the Council of Europe removed those persons and entities from the black lists. Now with the conclusion of the Joint Plan of Action (JCPOA) and provisions therein regarding the lifting of sanctions, new questions have emerged regarding the fate of cases decided by European courts and/or pending before them.
There will be individuals and entities on the sanctions list, even after 'Implementation Day' when the lifting of sanctions will commence, and would not be removed from the list until 'Transition Day', which is expected to be the eight years after the conclusion of the JCPOA. Some of these persons and entities currently have pending cases before European courts and may win their cases against the Council of Europe.
If so, the council should remove them from the sanctions lists, despite the fact that the JCOPA clearly states that they should remain on the sanctions list till the Transition Day. Thus, a question to be answered by Iran and the P5+1 would be how to modify the attachments to annex II of the JCPOA and what is the due process for that?
The text of the JCPOA is silent about such critical issues and it does not contain any provision regarding delisting of the individuals named in the agreement’s attachments. Iran would probably insist on the automatic removal of the successful applicants from the banned lists simultaneously with their removal from the EU sanctions lists. Although this proposal seems fair and reasonable, the EU position is unclear and not easy to predict.
In addition to the delisted persons and entities by the European courts, there are those individuals and entities listed by the Council of Europe, delisted by the JCPOA, and still waiting for their cases to be heard by the European courts. After Implementation Day, they will face a quandary.
Should they ask the courts to terminate the proceedings and remove the cases from its agenda, or should they follow their cases until the end of proceedings. At first sight it seems reasonable to terminate the cases, because there is no rationale for seeking verdicts knowing that the sanctions have been already terminated. But what makes such a decision difficult to be made by those persons and entities is the possibility of snap-back. If Iran or one of the P5+1 alleges that there is a material breach of the JCPOA by the other party and the dispute settlement mechanism envisaged in sections 36 and 37 of the JCPOA proves unsuccessful to settle the issue, then the sanctions imposed against Iran would be restored.
In such a scenario, the fate of the cases before the European courts would play a pivotal role. If the case is dropped at the request of the claimant, the court would not be entitled to resume proceedings after its removal from its agenda. On the other hand, there is no possibility for the suspension of the proceedings before the court pending the full implementation of the JCPOA and waiting for almost 15 years to make a decision about such cases.
The solution to this problem seems to be termination of the current cases before the European courts because of the removal of the sanctions without any prejudice to the rights of the listed persons to challenge the resumption of the sanctions if the snap-back occurs. In other words, the restoration of sanctions by the EU in the case of snap-back should be regarded by the European courts as the imposition of new sanctions against Iran, giving those affected the right to challenge the legitimacy of their imposition by the European justice system.
It is conceivable that Iran would insist on some kind of assurance for preserving its rights to challenge the restoration of sanctions before taking any steps to terminate the pending cases in European courts. Again, the response of the EU authorities regarding such a proposal by Iran is not clear, though the good faith commitment incorporated in the JCPOA leaves no room for the EU authorities to refrain from cooperating with Tehran on such key issues.
