A European Union court has ruled that the EU should lift sanctions it imposed on one of Iran's largest banks, the second such judgment that could complicate Western efforts to increase pressure on the Islamic Republic.

The ruling further weakens the EU's sanctions regime imposed against Iran's nuclear program, just weeks before six powers are due to resume stalled negotiations with Iran aimed at addressing fears that Tehran is seeking the bomb.

In its 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".

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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 programme it fears is aimed at creating atomic bomb capability, a charge Tehran denies.

More than 30 cases are still pending at the General Court, including ones filed by the Central Bank of Iran and the National Iranian Oil Company (NIOC). Those sanctions severely affected Iran's ability to export oil and carry out international financial transactions.

EU diplomats, who fear the rulings could undermine the sanctions program, say they face the challenge of providing sufficient justification while not compromising intelligence sources when they are drafting sanctions lists.

A spokeswoman for EU foreign policy chief Catherine Ashton said EU institutions would examine the ruling, but gave no further comment.

She is due to lead a delegation representing six world powers in talks with Iran that resume in Kazakhstan on Feb. 26, aimed at defusing the nuclear stand-off.

US sanctions Iranian broadcasters, locks up oil revenues

The United States, meanwhile, said on Wednesday it had sanctioned Iran's main agency in charge of broadcasting for helping the government censor Western reports, part of a broader effort by Washington to pressure Tehran's nuclear program.

The US Treasury Department also said sanctions that shackle Iran's oil earnings took effect, as scheduled, on Wednesday. Iran's earnings now have to be credited to accounts in countries that buy Iranian crude.

Under the conditions, Tehran can only use the funds to buy goods from its oil customers, preventing the money from being repatriated and used on the nuclear program the West believes is developing weapons. Iran says the program is for purely civilian purposes.

"This will significantly restrict Iran's ability to make use of the oil revenue that it's earning," a senior US official told reporters about the sanctions.

In its crackdown on Iran's state-sponsored media, the Treasury named the Islamic Republic of Iran Broadcasting, its director, Ezzatollah Zarghami, and others as subject to sanctions that effectively block their access to the US financial system.

Human rights groups have said Iran is using state media reports to trample dissent, and have pointed to forced confessions of political detainees in front of state media outlets.

Iran is using social media to hunt down political activists and is engaged in a campaign to filter out unwanted television content, the senior US official said. After Iran's 2009 presidential election, the government increased its jamming of foreign channels, including the BBC and Voice of America, the Treasury said.

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