The Organisation des Modjahedines du peuple d’Iran (OMPI) was originally set up to depose the Shah of Iran. It then changed tack to oppose the mullahs’ regime. It had an armed and violent branch. It claims to have renounced violence and terror (euphemistically called "military action" by the Court of First Instance) since June 2001. Nevertheless, the Council included the OMPI in a list of organizations whose funds should be frozen in order to protect against terrorism. The OMPI then sought annulment of its inclusion in that list.
The OMPI was included in the list in the following circumstances. The UN Security Council adopted Resolution 1373 in 2001 calling on all UN members to combat terrorism and the financing of terrorism by all means, in particular by freezing the funds of persons who commit, or attempt to commit, terrorist acts. That resolution did not identify the persons and entities in question but left it to the member States to identify them. To implement the Resolution 1373 (2001), the EC adopted Common Position 2001/931/CFSP and Council Regulation 2580/2001 ordering the freezing of the assets of the terrorist organizations included in a list. That list is to be updated regularly. An organization is included in the list on the basis of precise information in the file which indicates that a decision has been taken by a competent national authority, usually a judicial authority. The names of persons and entities on the list are to be reviewed at regular intervals and at least once every six months to ensure that there are still grounds for keeping them on the list. In 2002 the Council updated the list and included the OMPI. The list has been reviewed several times and the OMPI has remained on the list.
In its judgment sympathetic to OMPI, the Court of First Instance annulled the inclusion of OMPI on the list of terror organizations because, in short, the Council failed to accord that organization due process.
Interestingly, the Court of First Instance distinguishes this case from those cases involving organizations linked to terrorists such as Osama bin Laden, Al-Qaeda and the Taleban (Case T-306/01 Yusuf and Case T-315/01 Kadi and by implication Case T-253/02 Ayadi and Case T-49/04 Hassan. For our posts on those cases see here and here). In those cases, the Council and the Commission had merely transposed at EC level the resolutions of the Security Council and decisions of its Sanctions Committee which identified the persons concerned by name, without the EC institutions having any discretion as to the appropriateness or well-foundedness of those measures. By contrast, in the system at issue in the present case, the Security Council left it to the discretion of the UN Members to identify the organizations whose funds are to be frozen. That identification, according to the Court of First Instance, involves the exercise of the EC's own powers, entailing the exercise of discretion. Consequently, the Court held that the Council is in principle bound to observe the fundamental rights guaranteed by the EC legal order.
The judgment contains long and detailed explanations of the right to a fair hearing and the right to effective judicial protection. There is much citation of the case law of the European Court of Human Rights.
The Court of First Instance held that the right to a fair hearing does not require that the persons concerned be heard by the Council when an initial decision to freeze their funds is adopted, as it must be able, the Court concedes, to benefit from a surprise effect. But the Court of First Instance finds that the organizations concerned must be informed of the specific information in the file which indicates that a decision has been taken in respect of them by a competent authority of a member State, in so far as reasonably possible, either concomitantly with or as soon as possible after the adoption of such a decision. And the organization involved must be given the opportunity to make known its views on any subsequent decision to maintain a freeze on funds.
The Court of First Instance found that the OMPI was not given the opportunity to make its views known and was not told of the information on which the decision to include in the list was based.