(CN) - A British subsidiary of Melli Bank Iran will remain included on a list of entities that promote the nuclear proliferation of Iran, Europe's high court ruled Tuesday.
In 2008 the European Council froze the assets of Melli Bank Iran (BMI), including those of U.K. subsidiary Melli Bank, to implement the economic sanctions imposed by the U.N. Security Council to stop Iran from obtaining and developing nuclear weapons.
The Council of the European Union described BMI as "providing or attempting to provide financial support for companies which are involved in or procure goods for Iran's nuclear and missile programs." It also said that the bank "serves as a facilitator for Iran's sensitive activities," according to the court's summary.
Melli Bank, the British subsidiary, filed suit in the EU's General Court, seeking to overturn the council's decision. In 2009, that court dismissed the action and upheld the freezing of Melli Bank's assets.
Claiming that it is not wholly owned or operated by BMI, and that it does not provide financial support to Iran's nuclear program, Melli Bank appealed that decision to the Court of Justice in Luxembourg.
In dismissing Melli Bank's appeal Tuesday, the Court of Justice held that the General Court "did not err in holding that EU required the council to freeze the funds of an entity 'owned or controlled' by an entity identified as engaged in nuclear proliferation."
"Therefore, the reason for the freezing of the funds of Melli Bank - which is wholly owned by BMI, an entity identified as being engaged in nuclear proliferation - need not be the fact that Melli Bank itself engaged in such proliferation," the court said in a statement.
The court also found that the General Court did not violate the EU's principle of proportionality in holding that "where the funds of an entity identified as being engaged in nuclear proliferation are frozen there is a not insignificant danger that that entity may exert pressure on the entities it owns or controls in order to circumvent the effect of the measures applying to it and that the freezing of the funds of those entities is necessary and appropriate in order to ensure the effectiveness of the measures adopted and to ensure that those measures are not circumvented."
Freezing Melli Bank's funds and assets aligns with the principle of proportionality, since it is "appropriate and necessary for attaining the legitimate objective of preserving international peace and security," according to the court.
The General Court also correctly found that no alternative measures exist to obtain the same objective.
"Similarly, given the prime importance of the preservation of international peace and security, the restrictions of a bank's freedom to carry on economic activity, and of its right to property, occasioned by the fund-freezing measures were not disproportionate to the ends sought," the court said.
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