The European Union Blocking Statute was originally adopted in 1996 to counteract US sanctions on Cuba, Iran and Libya, but following a memorandum of understanding entered into between.
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Wednesday, May 26, 2021
In May 2018 the United States announced the reinstitution of sanctions against Iran that had previously been lifted pursuant to the Joint Comprehensive Plan Action (“JCPOA”).[1]
The U.S. sanctions on Iran that were revived by the U.S. action in 2018 include many that apply extraterritorially. Moreover, U.S. law allows the government to impose sanctions on non-U.S. persons (such as European companies) if the U.S. Treasury Department makes a finding that the non-U.S. person has provided goods or services in support of a Specially Designated National of Iran (such as Bank Melli Iran).
In November 2018 the German branch of Bank Melli Iran was notified by Telekom Deutschland GmbH that it was terminating its contract for telecommunication services to the Bank. Bank Melli responded to the termination by filing a lawsuit in Germany,
European companies doing business with Iran could face legal troubles if they have terminated their contracts with Iranian banks or firms solely because of fears about possible US sanctions, according to a legal opinion handed down Wednesday by a top EU court advisor. The case centres around then President Donald Trump s 2018 decision to unilaterally pull the United States out of the Iran nuclear agreement. The move sparked a series of U.S. sanctions, some of them meant to prevent companies from doing business with Iran. To protect European interests and help Iran s moribund economy, the EU introduced a blocking statute shielding companies in the 27-nation bloc. However, many big firms do more business in the United States than in Iran and some quickly severed ties rather than risk running afoul of U.S. sanctions.