EU to use Blocking Regulation in response to US withdrawal from the JCPOA

May, 2018

‘[A]n unwelcome development…intended to put EU businesses between a rock and hard place.’

EU to use Blocking Regulation in response to US withdrawal from the JCPOA

The EU has responded to the threat posed to EU businesses by the re-imposing of US sanctions on Iran by starting the formal process for adding these sanctions to its Blocking Regulation (formerly Regulation 2271/96) (18 May). Following US withdrawal from the Joint Comprehensive Plan of Action (‘JCPOA’) on 8 May, it is not yet clear whether secondary sanctions will be imposed against EU businesses trading with Iran, although as we reported last week, US national security adviser John Bolton has indicated that this is ‘possible’.

If the re-imposed US sanctions on Iran are blocked by the Regulation, this means that no judgment or requirements from an authority outside the EU concerning this measure will be recognised, and EU persons should not comply with any requirements or prohibitions unless that would seriously damage their interests or that of the EU.  Damages caused by the US sanctions, including legal costs, can be ‘clawed back’ by the affected party.

‘The reinvigoration of the Blocking Regulation is an unwelcome development as it is intended to put EU businesses between a rock and hard place,’ writes Ross Denton of Baker McKenzie.  ‘Unfortunately, the US rock is far more compelling than the EU hard place, and very few EU businesses will rely on the Blocking Regulation to guarantee their ability to keep doing business in the US and Iran.’


The threat of secondary sanctions – i.e., sanctions faced by non-US companies for violating US sanctions on Iran – and how to prepare for and respond to them, is one of a series of sanctions-focused presentations at this year’s WorldECR Forum in DC and London: for further information, visit




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