BEIRUT

Middle East

European court annuls asset freeze on Syrian bank

BRUSSELS: The European Union’s second-highest court said 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 and Syrian Lebanese Commercial Bank, which 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. counterproliferation sanctions.

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 policymakers.

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.

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.

In addition to targeting the Syria International Islamic Bank, the EU has imposed a broad range of sanctions against Syria over President Bashar Assad’s conduct of a war with domestic opponents since 2011.

 
A version of this article appeared in the print edition of The Daily Star on June 12, 2014, on page 8.

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