THE EUROPEAN COURT OF JUSTICE, FOR THE FIRST TIME, HAS BEEN ASKED TO INTERPRET THE EU BLOCKING REGULATION.

 

Karimi & Associates Law Firm presents according to Reuters:

 

A legal adviser to the European Union’s top court that termination of a German company’s contract with an Iranian bank was wrongful if its only justification was concern about becoming entangled in U.S. sanctions on Iran.

The case was brought by Bank Melli Iran, which has a branch in Hamburg and is being heard in German courts. German judges asked the EU’s top court for advice.

Telekom Deutschland, part of the Deutsche Telekom group that generates half of its turnover in the United States, ended its contract with Bank Melli Iran after the United States reimposed sanctions on Iran in 2018.

Then U.S. former President Donald Trump withdrew from the 2015 nuclear accord between Iran and world powers, including the European Union, and reimposed a wide array of sanctions on the Islamic Republic.

This left European allies trying to salvage the pact and European companies with big operations in the United States facing a dilemma of whether to continue business with Iran, seen by many of them as a potential growth market after the 2015 deal.

A decision by an EU company to stop doing business with an Iranian company “should be regarded as invalid if it cannot be justified on any ground other than the desire to comply with U.S. legislation,” Advocate General said in a statement released by the court in Luxembourg.

Hogan’s opinion statement also said Iranian companies should be able to invoke EU law blocking so-called U.S. secondary sanctions before the courts of EU states.

The court adviser said the blocking statute should still oblige EU companies to explain to an Iranian company under U.S. sanctions why they are ending commercial relationships.