General Court upholds recent sanctions against UK banks

20/03/13

The General Court today upheld the recent sanctions imposed on Bank Saderat Plc, whilst at the same time holding that earlier sanctions against the bank were unlawful and vitiated by violations of the bank's rights of defence. These procedural failings were held not to affect the most recently adopted measures.

Bank Saderat Plc was subjected to restrictive measures by the EU Council not because of its conduct but because it is wholly owned by Bank Saderat Iran which was itself the subject of sanctions. The sanctions imposed on BSI were recently annulled. However, in Bank Saderat plc's case the Court ruled that the bank could not rely on the annulment of the parent's listing without also challenging the substantive basis for that listing. It therefore held that arguments based on the invalidity of the parent's listing were inadmissible, despite its recent earlier annulment of the sanctions imposed on BSI.

The General Court also maintained, as it did recently in another case involving a UK Bank - Melli Bank Plc v Council, the somewhat surprising proposition that individual decisions to impose restrictive measures on an entity ‘owned' by another listed entity are immune from any individualised proportionality review even if (as in Melli Bank Plc's case) the entity has offered cooperation with the national regulatory authority in measures designed to isolate it from its listed parent (a device utilised by HM Treasury and the FSA to exclude the application of Libyan sanctions to the British Arab Commercial Bank).

The judgment in Case T-495/10 Bank Saderat Plc v Council is here.

The Judgment in Case T-492/10 is here.