EU unfreezes Iran group's funds

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The EU's second highest court has overturned a freeze on the funds of an Iranian group which was on the EU's list of banned terrorist organisations.

The People's Mujahideen of Iran was added to the list four years ago, and its funds were frozen.

On Tuesday the European Court of First Instance ruled that the EU did not sufficiently justify its decision on freezing the funds.

The People's Mujahideen has always protested at its inclusion on the list.

The opposition group says it has renounced violence since 2001.

The People's Mujahideen, which is in exile from Iran, is also on the British and American lists of banned organisations.

The European Court of First Instance ruled in favour of the People's Mujahideen and ordered the money to be unblocked.

The EU is still studying the ruling and has not yet decided whether to appeal.

But a spokesman admitted it would have serious implications for the way the banned list is established.