EU Advocate General Rules German Telecom Cannot Cancel Contract with Iranian Bank without Showing Cancellation Was Not Due to U.S. Sanctions

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Wednesday, May 19, 2021
Bruce Zagaris

On May 12, 2021, The European Union Advocate General opined that a decision by a German telecom company to cancel a contract with an Iranian bank, subject to U.S. primary sanctions, should be regarded as invalid if the German company cannot justify it on any basis, other than the desire to comply with U.S. legislation providing for secondary sanctions against non-U.S. undertakings trading with an Iranian person, which falls under the EU blocking statute.  The opinion puts the German telecom company in a real dilemma.[1]

[1]    European Court of Justice, Advocate General Hogan: Iranian undertakings may invoke EU law blocking US secondary sanctions before the courts of the Member States, Press Rel. No. 78/21, May 12, 2021.