From Kadi to Bank Mellat: Iran Sanctions and the Revival of the Due Process Dilemma

European Court of Justice (Cedric Puisney, Wikimedia.org).

[PDF]

By Maziar Peihani*

Council of the European Union v. Bank Mellat is an important addition to a series of suits that Iranian banks have brought before domestic and regional fora to challenge the sanctions regime imposed on Iran. Bank Mellat challenged restrictions imposed by European Union authorities pursuant to a UN Security Council resolution, arguing that they infringed on its fundamental rights under EU law, including its rights to defense and judicial protection. On February 18, 2016, the Court of Justice of the European Union (CJEU) handed down its final judgment, finding for Bank Mellat. The CJEU affirmed the lower court’s findings that the bank had not been given sufficient reasons for its listing and that there was no evidence that actually proved the bank’s involvement in Iran’s nuclear program. The case bears striking resemblance to Kadi, the most important European litigation to date on UN sanctions and due process.

This note first sets out the background of the Bank Mellat case and provides an overview of the relevant judgments delivered by the General Court and the Court of Justice. It then identifies the parallels between Kadi and Bank Mellat, with an emphasis on the confrontation between the UN and EU legal orders and the perceived supremacy of EU constitutional values. The note then delves deeper into the dynamics of the Iran sanctions regime, illustrating the accountability and due process shortcomings that have undermined its legitimacy and hindered the effective implementation of its targeted measures. The note concludes by critiquing the CJEU’s reluctance to go beyond the confines of EU law when looking at the collective security measures adopted by the UNSC, while at the same time welcoming the judgment as a victory for accountability and a potential catalyst for reforming the UN sanctions regime.

The full note is available here.


* Maziar Peihani is a post-doctoral Fellow, International Law Research Program, Centre for International Governance Innovation.