By Justyna Pawlak
BRUSSELS, June 11 The European Union's second
highest court said on Wednesday it had annulled an EU asset
freeze on Syria International Islamic Bank, dealing
another blow to EU sanctions following legal victories last year
by several Iranian companies.
The EU imposed sanctions on SIIB in 2012, alleging that it
had acted on behalf of two other banks, Commercial Bank of Syria
(CBS) and Syrian Lebanese Commercial Bank (SLCB), that were both
under EU sanctions.
The EU also alleged that SIIB, owned by Qatari and Syrian
shareholders, carried out financial transactions for people who,
without being under sanctions themselves, had bank accounts with
the two other banks.
But the court said the bloc's governments had failed to
provide evidence that the bank's clients were "implicated in the
violent repression of the civilian population in Syria" or that
any proof was made available that transactions on behalf of
clients were linked to the Syrian government.
"The fact that the applicant carried out financial
transactions for persons who also have accounts with CBS or SLCB
cannot be considered to be sufficient to justify its inclusion,"
the court said in a statement.
The bank has 20 branches and three offices in Syria and has
also been sanctioned by the U.S. Treasury, which has accused it
of helping Syria's state-owned Commercial Bank to evade U.S.
The EU made no immediate comment on the ruling, which is
subject to appeal.
Instead of appealing, EU governments could also re-impose
sanctions as they did with several Iranian companies last year
to avoid a lengthy and complicated appeal process.
Such court challenges by people and companies targeted by EU
sanctions have became a growing problem for European
At the core of the issue is the governments' unwillingness
to provide sufficient evidence of their targets' alleged
wrongdoing because of concerns that making such information
public would undermine western intelligence gathering.
UKRAINIANS LAUNCH LITIGATION
The U.S. government has also expressed concern over the
growing body of litigation and pressed European politicians to
find a way to allow judges to examine confidential information
and avoid conflicts with courts.
The latest high-profile targets of EU sanctions to sue in
court are former Ukrainian president Viktor Yanukovich,
overthrown by pro-European protesters in February, and former
Prime Minister Mykola Azarov.
Both have been accused by the EU of misappropriation of
Ukrainian state funds and face an EU asset freeze.
In addition to targeting the Syria International Islamic
Bank, the EU has imposed a broad range of sanctions against
Syria over President Bashar al-Assad's conduct of a war with
domestic opponents since 2011.
They include an embargo on purchases of Syrian oil, a ban on
arms sales and investment in the Syrian oil industry as well as
prohibition of European companies trading in Syria in gold and
Nearly 180 Syrians are banned from travelling to the EU and
roughly 50 companies have their assets in Europe frozen,
including the Syrian central bank.
For the full court ruling, please click: here
(Additional reporting by Adrian Croft; Editing by Ralph