The General Court of the EU has annulled sanctions measures against seven Iranian companies after finding they had no connection with nuclear proliferation in the Islamic Republic.  

The Council of the EU had enforced regulations freezing the funds of the firms and people identified as being involved in Tehran’s nuclear programme.

The court found that the council had not proved its case against Post Bank Iran, Iran Insurance Company, Good Luck Shipping and Export Development Bank of Iran.

“The council could not properly establish that [the companies] had provided support for nuclear proliferation,” the court said in a statement. “Consequently, the acts of the council requiring the funds of those firms to be frozen have been annulled.”

In the case of Persia International Bank and Iranian Offshore Engineering & Construction Company, the court found the council had erred in their assessment, while in the case of Bank Refah Kargaran, the court discovered the council had breached the obligation to state its reasons and disclose evidence to the bank.

At the same time, the court ruled that Bank Melli Iran and Europaisch-Iranische Handelsbank would remain on the list of companies with assets frozen.

“The court has dismissed the action of Bank Melli Iran in its entirety,” said the statement, saying the bank ensured payments were made to the Atomic Energy Organisation of Iran (AEOI) after restrictive measures had been adopted against it by the UN Security Council.

The annulments will take effect in two months and 10 days from the notification of the judgement on 6 December to give the chance of appeal.

Washington, which has led the imposition of economic sanctions against Iran, sees the ruling as a setback in its efforts to maintain pressure on Tehran to suspend uranium enrichment activities.

“We are very disappointed by the court’s decision today,” the US Treasury said in a statement. “The evidence linking these banks to Iran’s illicit nuclear activities is clear and strong, and no financial institution anywhere should allow these Iranian banks to transact with them.”

In a similar case in the UK, the country’s Supreme Court found in June that Iran’s largest bank, Bank Mellat, had not supported the Iranian nuclear programme and would be exempted from sanctions. EU sanctions against the bank were overturned in January by the General Court, but remain in place due to an appeal against the ruling at the European Court of Justice.