EU Court Dismisses €121 Million Claim by Bank Refah Kargaran Over Sanctions
Sanctions against Bank Refah Kargaran were justified, the EU General Court ruled in 2011, rejecting claims of financial losses and liability against the European Union.
Bank Refah Kargaran sought compensation for damages amounting to €68,651,319 for material losses and €52,547,415 for non-material losses, totaling €121,198,734. The case arose after the bank was placed on the EU sanctions list, which led to financial restrictions impacting its operations. The bank argued that the sanctions were unlawful and had caused significant financial losses, leading to the substantial claim for compensation.
The General Court ultimately ruled against Bank Refah Kargaran, dismissing the claim for damages on the grounds that the sanctions were justified under EU law, and the Council was not liable for the alleged losses incurred by the bank.
Overview of Bank Refah Kargaran
Established in 1959, Bank Refah Kargaran is one of the largest banks in Iran. The bank is owned by the Iranian Social Security Organization (Tamin) and its shareholders include various Tamin subsidiaries, such as the Social Security Investment Co (Shasta).
Shasta a.k.a. Social Security Investment Co. (SSIC) a.k.a. Tamin Investment Fund has a stake in 36 of Iran’s top 100 companies, as well as 27 of Iran’s top 59 oil companies. It is government-owned, but also co-owns companies along with the Armed Forces, Sepah Cooperative Foundation and EIKO, among other bonyads. As such, it is a vehicle for corruption in its own right; a significant link in the chain of complex ownership structures that keeps money flowing from public coffers into the private hands of regime affiliates, previous Tehran Bureau reporting has shown.
Powerful people linked to Shasta include IRGC founder Mohsen Rezaei, reformist MP Gholamreza Tajgardoon, and the Shiraz-based Dastgheib clan. All have business interests in Shasta through family networks.
Shasta has been involved in dealings with various bonyads including EIKO when it purchased shares in Mofid Economic Group despite having been banned from doing so by Tamin.
The bank is a shareholder in companies such as the sanctioned Mobarakeh Steel Company which has ties to multiple bonyads. 1
The US Treasury imposed sanctions on Bank Refah in July 2010 for taking over Bank Melli’s operations following European Union sanctions. The Treasury once again imposed sanctions on Bank Refah along with 17 other Major Iranian banks in October 2020.
The bank has no known branches outside the country.
- Sepah Cooperative Foundation (BTS), EIKO, Sepah Bank, City Bank, Khuzestan Steel (hBTS affiliated), Amir Kabir Petrochemical Co (NIOC), North Drilling Co (BM-owned, EIKO and armed forces affiliated), Aburaihan Pharmaceutical, Data Processing Iran Co. (IKRF affiliated)