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The Iranian rial has been imploding as the sanctions bite down. Photo by Reuters
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A European Union court ruled on Friday that the EU should lift sanctions it imposed against seven Iranian companies, dealing a new blow to Europe's efforts to use economic pressure to rein in Tehran's disputed nuclear program.

The ruling, which can be appealed, follows similar decisions earlier this year against sanctions imposed on two of Iran's biggest banks.

Friday's ruling covers Post Bank Iran, Iran Insurance Company, Good Luck Shipping, Export Development Bank of Iran, Persia International Bank, Iranian Offshore Engineering and Construction Co and Bank Refah Kargaran.

In making its ruling, the General Court, Europe's second-highest court, said that the EU had failed to produce sufficient evidence the listed companies were acting as front companies for Iran's nuclear program.

“We are very disappointed by the court’s decision today,” a spokesman for the United States 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.”

Meanwhile, the United States on Friday extended Japan's waiver on Iranian sanctions for six months, U.S. Secretary of State John Kerry said on Friday.

It was the fourth time Washington had extended the waiver. The move was expected, as Japan has cut its imports of Iranian oil, which in June were down 38.1 percent from a year earlier, government data showed.

The sanctions aim to choke funding to Iran's disputed nuclear program by reducing the country's oil sales, its main source of income. Washington believes Iran's nuclear program is aimed at developing weapons, and it has worked with the country's main oil consumers to find alternative petroleum supplies.

Tehran says the nuclear program is just for generating electricity and medical purposes.