On May 8, 2018, the President of the United States of America (the “U.S. President”) announced the withdrawal of the United States from the Joint Comprehensive Plan of Action (the “JCPOA”) related to Iran, and, consequently, began a process to re-impose certain sanctions on Iran that have extraterritorial effect. In response, the EU adopted a delegated act on June 6, 2018 to amend its Blocking Regulation (the “Amended Regulation”) to prohibit EU individuals and entities (“EU Persons”) from complying with such US sanctions, once re-imposed.
The Amended Regulation may force EU Persons that are engaged in commercial dealings in, with or involving Iran to choose between risking the scrutiny of, or enforcement action by, US or EU sanctions authorities. It may also affect entities that have no prior dealings with Iran – such as borrowers subject to ongoing general sanctions compliance warranties to lenders as a condition of financing transactions – for reasons considered below.
