A U.S. appeals court on Friday ordered Secretary of State Hillary Rodham Clinton to decide within four months on removing an Iranian dissident group from the State Department’s list of foreign terrorist organizations.

The three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled that if Mrs. Clinton fails to take a decision within four months, it would set aside the terrorist designation of the Mujahedeen-e-Khalq (MEK).

The court unanimously ruled in favor of the MEK, but rejected the group’s request for a 30-day deadline.

The MEK is also known as the People’s Mojahedin Organization of Iran (PMOI). The State Department designated it a foreign terrorist organization in 1997.

“We believe the secretary’s delay in acting on PMOI’s petition for revocation is egregious,” the court said.

“By failing to make a final decision on PMOI’s petition, the secretary is able to maintain PMOI’s designation while precluding PMOI from seeking judicial review,” it added.

But the court declined to immediately revoke the terrorist designation citing “national security and foreign policy concerns.”

Maryam Rajavi, the MEK’s Paris-based leader, said the court’s order “demonstrated that maintaining the terrorist designation on the People’s Mojahedin Organization of Iran is absolutely illegitimate and unlawful, and is guided by ulterior political motives.”

Members of the MEK are being relocated from their present home at Camp Ashraf, north of Baghdad, to Camp Liberty, a former U.S. military base near the Iraqi capital’s international airport under a deal brokered by the United Nations.

A Justice Department attorney representing Mrs. Clinton told the court on May 8 that the secretary would make a decision on removing the MEK from the terrorist list no later than 60 days after Camp Ashraf had been vacated, and data gathered from the relocation had been studied to verify the group’s claims that it is not a terrorist organization.

So far, around 2,000 of Camp Ashraf’s more than 3,000 residents have been transferred to Camp Liberty.

Camp Ashraf residents have demanded that their camp be searched for weapons before any more of them move to Camp Liberty.

State Department spokeswoman Victoria Nuland said that Mrs. Clinton has stated previously, “given the ongoing efforts to relocate the residents of Camp Ashraf to [Camp Liberty], MEK cooperation in the successful and peaceful closure of Camp Ashraf, the MEK’s main paramilitary base, will be a key factor in her decision regarding the MEK’s [foreign terrorist organization] status.”

The State Department is reviewing the court’s opinion and intends to comply with it, Ms. Nuland added.

The U.N. refugee agency has started a process of determining refugee status of the dissidents, a necessary first step to resettle them in other countries. However, the State Department’s designation of MEK as a foreign terrorist organization has proved to be an obstacle to relocating the dissidents to outside Iraq. U.S. citizens have also been barred from supporting its members.

The MEK was responsible for terrorist attacks in Iran in the 1970s that killed several U.S. military personnel and civilians, according to the State Department. The group denies any role in the deaths of U.S. military personnel.

Camp Ashraf’s residents surrendered their weapons in 2003 as part of a cease-fire agreement with U.S. forces. The U.S. turned over control of Camp Ashraf to the Iraqi government in June of 2009.

Britain and the European Union took MEK off their lists of terrorist organizations in 2008 and 2009 respectively.

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