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EU: Updated “blocking statute” supporting Iran nuclear deal

EU: “Blocking statute” supporting Iran nuclear deal

The European Commission issued a release that the EU’s updated “blocking statute” is effective today, 7 August 2018. The updated blocking statute—part of EU support for the continued full and effective implementation of the Joint Comprehensive Plan of Action (JCPOA) as the Iran nuclear deal is known—aims to sustain trade and economic relations between the EU and Iran which were normalised when nuclear-related sanctions were lifted as a result of the JCPOA.

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As noted in the EC release, with the first batch of re-imposed U.S. sanctions on Iran taking effect, the EU's updated blocking statute enters into force on 7 August2018 to mitigate the impact of the U.S. sanctions on the interests of EU companies doing legitimate business in Iran. The process of updating the blocking statute was launched by the Commission on 6 June 2018 when it added, to its scope, the extraterritorial sanctions the United States is re-imposing on Iran. A two-month scrutiny period for the European Parliament and the Council followed. Since neither objected, the update will be published in the Official Journal and enter into force on 7 August.

The blocking statute allows EU operators to recover damages arising from U.S. extraterritorial sanctions from the persons causing them and nullifies the effect in the EU of any foreign court rulings based on the sanctions. It also forbids EU persons from complying with those sanctions, unless exceptionally authorised to do so by the EC if non-compliance seriously damages their interests or the interests of the EU. The authorisations will be applied on the basis of criteria also be issued on 7 August 2018.

To help EU companies with the implementation of the updated blocking statute, the EC will also publish a guidance note to facilitate understanding of the relevant legal acts. 

The EC release concludes:

The European Union is fully committed to the continued, full and effective implementation of the JCPOA, as long as Iran also respects its nuclear-related commitments. The lifting of nuclear-related sanctions allowing for the normalisation of trade and economic relations with Iran constitute essential parts of the JCPOA. At the same time, the European Union is also committed to maintaining cooperation with the United States, who remains a key partner and ally.

In addition to the above measure, the EU, in close coordination with Member States and other partners, is working on concrete measures aimed at sustaining the cooperation with Iran in key economic sectors, particularly on banking and finance, trade and investment, oil, and transport.

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner, Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

Andy Siciliano
Partner, National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Robert Waldrop
Principal
T: 212-954-8117 
E: rwaldrop@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

John L. McLoughlin
Principal, East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Luis (Lou) Abad
Principal, WNT
T: 212-954-3094
E: labad@kpmg.com

Amie Ahanchian
Managing Director
T: 202-533-3247
E: aahanchian@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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