Following President Trump's announcement that the United States will withdraw from the Joint Comprehensive Plan of Action ("JCPOA") and re-impose US sanctions (including secondary sanctions) against Iran, the European Union has chosen to signal its commitment to the continuation of the JCPOA. Readers will be aware that the US has indicated it will be re-imposing secondary sanctions on Iran over the course of the coming months, following two winding-down periods, the first of which ends in August this year, and the second of which ends in November.
The European Commission has now begun the process of mobilising the EU blocking statute (EU Council Regulation No 2271/96), which was previously in play following US sanctions against Cuba. This statute is designed to limit the impact of the extra-territorial US sanctions in a number of ways. Central among these are provisions requiring EU persons not to comply with any restrictions provided under US secondary sanctions, and preventing the enforcement of judgments relating to alleged breaches of the US secondary sanctions. Note that the blocking legislation relating to the US secondary sanctions on Iran is not, yet, in effect.
It remains to be seen how EU companies will navigate the potentially mutually-exclusive requirements of the US secondary sanctions and EU blocking legislation. We shall report further on these developments as additional information becomes available.
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