The trade association UK Finance has published a paper setting out some considerations for the financial services sector arising out of the forthcoming amendment to the EU Blocking Regulation designed to protect the “Iran-related business interests of EU companies and individuals following the US JCPOA withdrawal” (see previous blog). The paper explains the potential impact on EU and US persons, and notes that:
- The EU Blocking Regulation has rarely been enforced and has not (even with the forthcoming amendment) been considered to offer “any real protection” against US secondary sanctions.
- However, it will add “a further dimension of legal complexity and cross-border compliance challenges”. EU persons may be “exposed to liability” under the Regulation “regardless of whether they have a direct connection with Iran”, and it potentially exposes the financial sector to the possibility of damages & costs claims. UK Finance members “view the risk of civil litigation as significant”. (Please click the “contact us” section of this blog for advice about the legal issues arising out of the Blocking Regulation).
- There are a number of areas of uncertainty (examples / case studies are given in the paper) in which UK Finance suggest that dialogue with the Commission and competent authorities would be useful, eg on the little used procedure under the Blocking Regulation for EU persons to apply to the European Commission for authorisations to comply with US sanctions.