BRUSSELS (Reuters) - The EU's highest court upheld a decision Wednesday to remove an Iranian opposition group from the EU's terrorism blacklist, a ruling that could affect the fate of thousands of the organization's members stranded in Iraq.
France had appealed against a decision by a lower EU court that ordered the European bloc to remove the People's Mujahideen Organization of Iran (PMOI) from its terrorism list, but the European Court of Justice rejected the appeal.
It upheld a 2008 decision by the ECJ's court of first instance, which held that the EU had failed to provide the PMOI with evidence that formed the basis of a decision to keep it on the terrorism list.
"The adoption of such a decision must, in principle, be preceded by notification of the incriminating evidence and by allowing the person or entity concerned an opportunity of being heard," it said.
French officials said they regretted the court's ruling and pointed out that some of Paris' closest allies continue to list the PMOI as a terrorist organization.
The PMOI, which strongly opposes Iran's clerical rulers, waged a violent insurgency against the Shah in the 1970s and staged attacks on U.S. interests, but now says it has renounced violence and supports secularism and democracy.
Despite lobbying on the group's behalf, the United States still lists it as a terrorist organization.
The EU dropped its terrorist designation in 2009 after the 2008 court case. EU officials said the decision was based on the legal case and not a result of concluding that it was no longer a terrorist group.
The group's status is an important issue right now, as it could have an impact on 3,000 activists stranded at a camp in Iraq, where they were once guests of former leader Saddam Hussein and later received protection from U.S. troops.
The government of Iraq, which is friendly with Tehran, says it will close Camp Ashraf by the end of this year, leaving just days to resolve their fate.
Washington has tried to persuade the activists to accept a U.N. plan to move to a new camp near Baghdad airport. From there, they could eventually be resettled abroad, which is easier to organize if countries do not list them as terrorists.
Camp residents say they fear for their safety now that U.S. troops have withdrawn from Iraq, ending their nine-year presence.
In a statement, PMOI leader Maryam Rajavi welcomed the court's decision and called on the United States to take the PMOI off its terrorism list, saying the residents of Camp Ashraf had suffered the consequences of the listing.
Tuesday, Rajavi said the PMOI would agree to the U.N. plan provided the United Nations, the United States and European Union supported and endorsed the proposal and the Iraqi government guaranteed the residents' security and well-being.
(Reporting by David Brunnstrom; Editing by Andrew Heavens)