As discussed in our blog post of 21 May 2018, the EU has reaffirmed its commitment to the Joint Comprehensive Plan Of Action in the wake of the US' announcement that it would be withdrawing from that agreement and re-imposing its nuclear-related secondary sanctions. The European Commission has now published an amendment to its Regulation 2271/96, the so called "blocking statute", in order to mitigate the impact of the US' secondary sanctions.
The "blocking statute" contains a range of measures including:
- provisions requiring EU persons not to comply with any restrictions provided under US secondary sanctions;
- provisions preventing the enforcement of judgments relating to alleged breaches of the US secondary sanctions; and
- provisions affording the opportunity to recover damages caused by application of the US secondary sanctions.
From 6 June 2018, the European Parliament and the Council will have two months to object to the measures. If no objections are made, the updated blocking statute will enter into force at the beginning of August, at the latest, and importantly before the first batch of the US' re-imposed secondary sanctions takes effect.
There is the potential for EU companies to be caught between choosing to comply with the EU blocking legislation or with the US sanctions regime. It remains to be seen how companies will navigate these potentially mutually-exclusive requirements. You should be sure to seek out the most up to date legal advice for any Iran-related business, so you are acting in accordance with the latest guidance.
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