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Financial distress is not enough: EIH Bank, EU Iran sanctions and interim relief (T-365/26 R)

Financial distress is not enough: EIH Bank, EU Iran sanctions and interim relief (T-365/26 R)

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A German bank claimed that EU sanctions threatened its survival – and still lost. Here, Pourya Ahansa examines why the application for interim relief failed, what the order leaves open on causation, and what applicants should assemble before they apply.

Europäisch-Iranische Handelsbank AG (“EIH”), a bank based in Hamburg, told the General Court of the European Union that it would soon be unable to continue trading. It submitted that essential service providers had ended their relationships, that the Deutsche Bundesbank (“Bundesbank”) was refusing payments, and that the Federal Financial Supervisory Authority (“BaFin”) had suggested that EIH might be treated as technically insolvent. It further invoked the risk of 67 job losses. On 23 September 2026, the President of the General Court nevertheless dismissed its application to suspend the EU restrictive measures against it.1

The President did not decide whether the listing is lawful, and did not assess whether EIH is financially sound. The application failed because urgency had not been established. This article argues that the strict approach is correct and offers important guidance for practitioners and banks. Interim relief is an exception to the rule that actions do not suspend EU acts, and an exception must be treated as such. An interim application is not won by legal argument alone, but by structured preparation of the facts and their presentation to the court.

An interim application is not won by legal argument alone, but by structured preparation of the facts and their presentation to the court.

TWO APPLICATIONS, TWO PROCEDURAL FAILURES

EIH challenged the measures in December 2025 (T-865/25) and applied for interim relief. On 23 March 2026, the President dismissed that application as inadmissible: EIH had devoted practically no argument to the prima facie case and merely referred to its main action.4 After the Council informed EIH on 31 March 2026 that its listing was maintained, EIH brought a new action on 10 June 2026 (T-365/26) and lodged a further application for interim measures on 17 July 2026.

The second application relied on the economic consequences of the freeze. The Council contested admissibility, but the President left that open for reasons of procedural economy (paras 23–24) and decided on urgency (para. 47). The two failures differ in kind: first the prima facie case was not set out, then the urgency was not substantiated. What they share is a rule: the judge does not search the annexes or the main action for evidence the applicant has not pointed to (para. 39, citing T-865/25 R, para. 19). In both rounds the gap lay in what the applicant itself controlled.

In both rounds the gap lay in what the applicant itself controlled.

THE TEST: URGENCY MUST BE DEMONSTRATED

Under Article 278 TFEU, actions before the Court do not have suspensory effect, because Union acts are presumed lawful, so a suspension is ordered only exceptionally (para. 18). The rationale is that interim relief exists to secure the effectiveness of the final judgment, and it is for the applicant to prove that it cannot await that judgment without serious and irreparable harm (para. 25).5 The procedure is fast, and the judge is not required to reconstruct the applicant’s evidentiary case. Article 156(4) of the Rules of Procedure of the Court of Justice therefore requires the application to contain all available evidence and to be intelligible on its own (paras 37–38).

Allegations of financial harm do not, by themselves, establish urgency. As a general rule, monetary loss is reparable, for instance by an action for damages; interim relief may nevertheless be justified in exceptional circumstances, particularly where the applicant’s financial viability would be jeopardised before the main proceedings end (paras 34–35). An asset freeze is meant to bite; if economic harm alone sufficed, nearly every listed entity could obtain suspension. The line has a cost: a party that truly stands on the brink can lose for want of paper. But the cost falls on the one party that controls the cure. The same standard applies outside sanctions: two days later the same President applied the same viability test to an EU official whose pay had been cut to the subsistence minimum, and dismissed her application because her financial calculations, loan documentation and income forecasts did not adequately substantiate the alleged risk.6

WHERE THE APPLICATION FELL SHORT

The order identifies three gaps. EIH annexed documents, mainly from BaFin, but did not say which document supported which assertion (para. 39). It gave no figures and did not set out its financial situation, although the applicant must in principle provide an accurate overall picture backed by certified documents (paras 36 and 40). And it cited no concrete examples of the alleged terminations of services (para. 40). The arguments on the 67 jobs and on the two Iranian banks, which EIH described as unsanctioned and dependent on it for humanitarian payment channels, failed for a separate reason: an applicant must show harm to its own interests, and third-party interests count only when interests are weighed (paras 43 and 45). That does not mean humanitarian payments were unaffected. The submission was simply not sufficient for the purpose for which it was made.

The order proves that the old maxim da mihi factum, dabo tibi ius (“Give me the facts, and I will give you the law”) can have concrete economic consequences. The court knows the law, but the facts must be delivered, in a form it can use, by the party that needs them. The freeze remains in force while the main proceedings run, and the reason is not a finding that the listing is lawful. It is a missing record.

THE CAUSATION QUESTION

The causation point is the more interesting one. EIH said that the Bundesbank refused to process payments for which authorisations had been granted and declined to return the funds to EIH so that it could make the payments itself, and that BaFin had suggested technical insolvency (paras 29–30). Interim relief requires the alleged harm to be attributable to the contested EU act. The President held that, even if the Bundesbank’s measures were proven, the resulting harm would flow directly from the Bundesbank’s conduct, not from the contested EU acts; the same applied to BaFin’s alleged intentions regarded as technically insolvent (para. 41).

On the facts as the order records them, that is persuasive. A refusal to execute authorised payments may go beyond what the asset freeze itself requires; if it happened, it is a separate decision with its own legal basis, and an applicant who does not show otherwise cannot ask the Court to attribute it to the Council. Read more broadly, the passage would raise a question the order does not need to answer. Where a national authority merely executes a binding EU measure, for example by refusing a payment because the payee is listed, the effect is hard to distinguish from the EU act itself. Where it acts on its own assessment, such as a supervisory view on solvency, the chain is more plausibly interrupted. The order draws no line between the two, because on its facts it did not have to. For applicants, the consequence is practical: separate the effects that follow from the freeze from those that rest on independent decisions, attribute each to its source, and prove the attribution.

The order draws no line between the two, because on its facts it did not have to.

WHO HOLDS THE FACTS: BANK MELLI AND THE BGH

The order cites neither Bank Melli Iran v Telekom Deutschland (C-124/20) nor the BGH’s judgment of 18 March 2025 (XI ZR 59/23), and they do not establish a uniform evidentiary standard. But they ask a question the EIH order sharpens: who is best placed to supply the facts? In Bank Melli, the Court held that, where the available evidence suggested prima facie that a termination was motivated by compliance with listed US legislation, it was for the terminating undertaking to establish to the requisite legal standard that its conduct did not pursue that objective.7 Against that background, the BGH held that US secondary sanctions may, in principle, justify an interference with property or another protected right under section 823(1) BGB and the affected party’s extra-EU business activities to disproportionate economic harm. In the case at hand, however, it found no such justification, as the relevant US secondary sanctions had not yet entered into force during the period in question.8 In EIH, the missing information concerned the applicant’s own finances. There was no asymmetry to correct, and a strict approach to its own evidence is unsurprising.

WHAT APPLICANTS SHOULD DO BEFORE APPLYING

The law on urgency is settled; the record is what differs. Start it when the risk becomes foreseeable, not when the freeze takes effect, and give it one owner. Build it from executed documents, not drafts: signed agreements, proof of payment, dated correspondence. Keep the reason each provider gave when it terminated services. Certify the figures and reconcile them with ledgers and bank statements; a bare forecast table did not suffice in T-436/26 R. Tie each assertion to a document by annex and page, not to an annex as a whole. Attribute each harm to its decision-maker and attach that decision-maker’s own statement of its legal basis. Record the alternatives explored and why they failed. Keep consequences for employees and third parties for the balance of interests.

FOUR QUESTIONS TO ASK BEFORE SEEKING INTERIM RELIEF
  1. Can we quantify when the bank’s viability is threatened, and prove it with certified documents?
  2. Does each factual assertion point to specific, dated evidence rather than to an annex as a whole?
  3. Is the EU act the decisive cause, or does the harm flow from a separate national or commercial decision?
  4. Are we showing harm to the applicant itself, rather than to employees, customers or counterparties?
BEFORE THE COURT REACHES THE MERITS

The EIH order does not change the principles of interim relief, and it says nothing about whether the listing is lawful. The President was right to hold the line: an exception that a severe narrative could obtain would soon become the rule. The practical choice for a bank in this position is narrow: build the factual record before it applies, or learn that a persuasive account of distress is not a substitute for proof of it.

Pourya Ahansa, LL.M. (Washington, D.C.), is an Associate in the Frankfurt office of Oracle Law Global, advising on banking, regulatory and sanctions law.

LINKS AND NOTES
  1. General Court, Order of the President of 23 September 2026, Europäisch-Iranische Handelsbank v Council, T-365/26 R, ECLI:EU:T:2026:591, paras 36–47; official English text: https://infocuriaws.curia.europa.eu/blob/download-file/327246/EN/HTML.
  2. Council Implementing Decision (CFSP) 2025/1971, Council Decision (CFSP) 2025/1978 and Council Implementing Regulation (EU) 2025/1980, all of 29 September 2025 (T‑365/26 R, para. 1); Council of the European Union, Press Release 760/25, “Iran sanctions snapback: Council reimposes restrictive measures”, 29 September 2025.
  3. Human Rights Council, Report of the Independent International Fact-Finding Mission on the Islamic Republic of Iran, UN Doc A/HRC/63/61, 21 September 2026 (advance edited version), paras 9, 11–13, 23–28 and 117–121; official OHCHR PDF: https://www.ohchr.org/sites/default/files/documents/hrbodies/hrcouncil/sessions-regular/session63/a-hrc-63-61-aev.pdf.
  4. General Court, Order of the President of 23 March 2026, Europäisch-Iranische Handelsbank v Council, T‑865/25 R, ECLI:EU:T:2026:210, paras 14–21.
  5. T-365/26 R, paras 18–25 and 33–38, citing AGC Glass Europe and Others v Commission, C‑517/15 P‑R, ECLI:EU:C:2016:21; Commission v Vanbreda Risk & Benefits, C‑35/15 P(R), ECLI:EU:C:2015:275; Kanyama v Council, T‑145/17 R, ECLI:EU:T:2017:212; and ICA Laboratories and Others v Commission, T‑732/15 R, ECLI:EU:T:2016:129.
  6. General Court, Order of the President of 25 September 2026, HI v Parliament, T-436/26 R, ECLI:EU:T:2026:592, paras 29–39; EUR-Lex: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62026TO0436(01).
  7. Court of Justice, Judgment of 21 December 2021, Bank Melli Iran v Telekom Deutschland, C-124/20, ECLI:EU:C:2021:1035, paras 65–67; EUR-Lex: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62020CJ0124.
  8. BGH, Judgment of 18 March 2025, XI ZR 59/23, ECLI:DE:BGH:2025:180325UXIZR59.23.0, paras 65–66 (setting aside the judgment under appeal and remitting the case to the Higher Regional Court); full text: https://curia.europa.eu/site/upload/docs/application/pdf/2025-08/xi_zr__59-23.pdf.
Pourya-final
Pourya Ahansa
Associate
  • Barckhausstraße 1 60325 Frankfurt Germany
  • (+49) 69 967 58 891

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