EU court rules against sanctions on Iran's Bank Saderat

(Reuters) - A European Union court has ruled that the EU should lift sanctions it imposed on one of Iran's largest banks, Bank Saderat, a judgment that could complicate Western efforts to increase pressure on the Islamic Republic.

In a ruling on Tuesday, the EU's General Court said the EU had failed to provide sufficient evidence that Bank Saderat was involved in Iran's nuclear program when the bloc targeted it with sanctions in July 2010.

EU governments have two months to appeal. Last week, the court issued a similar ruling about of Bank Mellat, the biggest private sector lender in Iran.

When the EU imposed sanctions on Bank Saderat, it accused it of providing "financial services for entities procuring on behalf of Iran's nuclear and ballistic missile programs".

The court, however, said the claims were not sufficiently substantiated.

"The Council (of EU governments) is in breach of the obligation to state reasons and the obligation to disclose to the applicant ... the evidence adduced against it," the court said in its ruling.

The EU has severely tightened sanctions on Iran over the last two years, seeking to pressure it to curb the nuclear program it fears is aimed at creating atomic bomb capability, a charge Tehran denies.

(Reporting by Justyna Pawlak; Editing by Robin Pomeroy)