The US-Iran related sanctions and the EU Blocking Statute

In response to President Trump’s Executive Order re-imposing certain Iran-related sanctions, the EU expanded the scope of its Blocking Statute, to cover these sanctions.


On 7th August, the Commission Delegated Regulation (EU) 2018/1100, amending the annex to the EU Blocking Statute was published in the EU Official Journal and entered into force, as from that date. The Commission also published its Implementing Regulation (EU) 2018/1101, which sets out (i) the process for applying to the Commission for an authorization permitting compliance with the relevant US-Iran sanctions and (ii) a non-exhaustive list of criteria that the Commission will consider when assessing if an authorization should be granted.


These must be read alongside the Commission’s non-binding Guidance Note, which covers various aspects of the application of the revised Blocking Statute, including, amongst others, the possibility of EU operators being able to recover damages arising from the sanctions.


The Guidance Note confirms that the amended Blocking Statute applies to EU Operators from 7 August (with no retroactive application). It also clarifies that it applies to contractual obligations entered into before 7 August. Therefore:

  • If an EU operator currently has activities in Iran, termination of its business in Iran on or after 7 August (to comply with the US sanctions) would require an authorization from the Commission in order to avoid a breach of the Blocking Statute. EU operators will need to bring strong evidence to show why they had to terminate business activities in Iran, (e.g. serious economic damage).
  • If an EU operator has activities in Iran, but fully terminated its business before 7 August, the EU operator should not be subject to the Blocking Statute.
  • However, it is not clear how the Blocking Statute applies to EU operators which ceased their Iran-related activities before 7 August, but still continues actions to wind down its related investments of contractual relationships. The assumption is that these would be assessed on a case-by-case basis.


Both the Implementing Regulation and the Guidance Note provide further details on how EU operators can seek an authorization from the Commission, to comply with US-Iran related sanctions.



Points to note:

Beware that a Commission authorisation does not amount to a “comfort letter”, or any confirmation from the Commission.


Business decisions:

Guidance suggests that EU operators are able to cease their Iran related activities for genuine economic reasons (e.g. no access to financing etc), where “business decisions” are taken, in which case, companies are not bound to apply to the Commission for authorization.


Notification of effects:

EU operators must notify the Commission or their Member State of incorporation whenever the US Iran related sanctions directly or indirectly affect the economic or financial interests of the EU operator.


Requests for licenses from U.S. authorities:

An EU operator would need to obtain a Commission authorization before requesting an individual license from the U.S. authorities granting a derogation from the sanctions.


With the entry into force of the Blocking Statute and the re-imposition of certain U.S. sanctions targeting Iran, many EU companies , with Iran-related interests, will find themselves facing a conflict of laws situation.

Clearly, there will be many different factors to be considered, requiring a case by case legal analysis.


On 27 June 2018, CLEPA ran a webinar with the law firm Steptoe & Johnson LLF outlining the details of these legislative measures. We shall keep you informed of any upcoming such webinars.


In the meantime, CLEPA would like to announce that the Commission has confirmed that CLEPA has the authority to seek authorisations collectively on behalf of our members. Should your companies decide that you would like CLEPA to act upon your behalf in submitting an application for authorisation, please contact us .


Source: Steptoe, CLEPA


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