The Evolution of the EU Blocking Regulation: CJEU on Bank Melli

5 January 2022
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Key takeaways:
  • On 21 December 2021, the Court of Justice of the European Union issued a decision in Bank Melli Iran v Telekom Deutschland GmbH, its first case considering the EU Blocking Regulation. The Regulation has caused considerable concern for businesses, as it prohibits compliance by EU persons with certain U.S. sanctions on Iran and Cuba, but significant questions had remained as to its scope and interpretation.
  • The CJEU generally followed the advice of Advocate General Hogan’s May 2021 opinion, but held that EU Member State courts are not obliged to order a party in breach of the Regulation to continue performing contracts with parties targeted by U.S. sanctions if the impact on the breaching party would be disproportionate.
  • While the Decision may soften the Regulation’s effect on EU businesses, its impact may be short-lived given the European Commission’s intention to amend the Regulation later this year.