According to press reports, the European Union (EU), in view of the withdrawal of the USA from the Iran agreement The so-called blocking regulation is now to be reactivated, banning and even penalising compliance with US sanctions against Iran.
On the other hand, companies that violate US sanctions could be compensated for the resulting damage, including legal costs. However, the measures have yet to be published in the Official Journal of the EU and thus come into force. The corresponding regulation is to be drawn up by the beginning of June. Only then will it be clear how European companies can behave with regard to blocking regulation in the future.
This threatens to create a dilemma for the companies concerned, which would have to decide whether they will accept an infringement in the USA or in the EU.
EU wants to save Iran agreement
Despite the US’s withdrawal, the EU wants to stick to the Iran nuclear deal. However, European companies face severe penalties in the US, as the US considers its Iran sanctions to be applicable worldwide. For example, European companies with business relations with the USA and Iran are taking a high risk, even though the EU is sticking to the nuclear agreement.
That is why Europe wants to ban compliance with US sanctions with the threat of punishment. The relevant regulation, the so-called blocking regulation, was already adopted in 1996 in connection with the sanctions against Cuba, Iran and Libya, but has not yet been applied.
Entrepreneurs are exposed to a dilemma despite blocking regulation
Entrepreneurs are faced with the choice of which sanction regime they should violate. The EU wants to award a claim for damages to companies that decide against the US sanctions.
Little attention has been paid to Germany’s long-standing ban on boycott declarations. According to this, penalties of up to EUR 500,000 can be imposed on anyone who participates in a particular way in a boycott against another state. The dilemma therefore existed even before the EU decided to reactivate the Blocking Statute.
The risks associated with Iran's sanctions should be well weighed up. Entrepreneurs should not take ill-considered steps, as the consequences of the threat of punishment could not only be of a financial nature.