[JURIST] The European Court of First Instance [official website] on Tuesday annulled [judgment text; press release, PDF] a decision by the Council of the European Union to freeze the assets of the People's Mojahedin Organization of Iran (PMOI) [organization website; Wikipedia backgrounder] after EU member states put the group on their terrorist watch lists. The group, which is an arm of the National Council of Resistance of Iran (NCRI) [organization website] based in France, argued that it was incorrectly labeled as a terrorist organization after encouragement by Tehran during a time when Europe was attempting to better relations with Iran [JURIST news archive]. A judge for Europe's second highest court said the decision to freeze the group's assets was made without giving PMOI a fair hearing and was reached without a "sufficient statement of reason."

The PMOI was the first to reveal [JURIST report] information about Iran's nuclear program and has been at odds with the government since it chose to support Saddam Hussein [JURIST news archive] in the Iran-Iraq war [GlobalSecurity backgrounder] during the 1980s. The court's decision to annul the asset freeze does not ban member states from keeping the group on their individual terrorist watch lists. Tuesday's ruling may still be appealed to the European Court of Justice [official website]. Reuters has more.