BRUSSELS, Oct 23: A court ruled on Thursday that European Union governments illegally froze the funds of an Iranian opposition group.

The ruling handed down by EU’s second-highest court, the Court of First Instance, said the bloc had failed to justify its decision to keep the People’s Mujahideen Organisation of Iran on its list of terror group list.

But the group will remain a banned organisation because the EU changed its rules on compiling the list in the months since the case was brought. The rule change means the entire matter will be brought back to the courts for more argument.

The case was brought after a British court decided last year that the group should be removed from London’s list of ‘banned terror groups’ after concluding it had conducted no military activity in Iran or elsewhere since August 2001.

The court decided that Britain’s decision should have been taken into account by the EU when it decided to keep the group on its terror list. It said in a statement it believed “the (EU) Council’s statement of reasons is manifestly insufficient to provide legal justification for continuing to freeze the PMOI’s funds”.

However, the EU said it would not appeal against the ruling because circumstances had changed since the court case began.—AP