Advocate General of the Court of Justice Gerard Hogan rendered an Opinion in the first case before the Court of Justice of the European Union on the interpretation of the EU Blocking Statute. The case concerns Iranian bank Bank Melli Iran, which has a branch in Hamburg (Germany), and which claims before the German Courts that the notice of ordinary termination given by Telekom Deutschland with respect to their contracts for telecommunication services was motivated solely by Telekom Deutschland’s desire to comply with US sanctions legislation. Bank Melli Iran maintains that Telekom Deutschland violated the EU Blocking Statute, which prohibits EU undertakings (entities engaged in an economic activity, regardless of their legal form or the way in which they are financed) from complying with such extraterritorial US measures.
In its opinion, Advocate General Hogan finds that:
- The general prohibition contained in the EU Blocking Statute (which is directed against compliance with certain third country legislation providing for secondary sanctions) applies even in the event that such an undertaking complies with that legislation without first having been compelled by a foreign administrative or judicial agency to do so.
- An EU undertaking seeking to terminate an otherwise valid contract with an Iranian entity subject to the US sanctions must demonstrate to the satisfaction of the national court that it did not do so by reason of its desire to comply with those sanctions.