![]() Reversal of burden of proof may be necessary The ECJ also addressed in particular the questions of burden of proof as regards the motivation for terminating the contract and the interpretation of the prohibition stipulated by Article 5(1) of the EU Blocking Regulation in the light of the principles of freedom to conduct a business and proportionality. ![]() Regarding the question of the scope of Article 5 of the EU Blocking Regulation, it was not particularly surprising that the ECJ agreed with the Advocate General’s assessment that such scope is not limited to cases in which specific orders were issued by a third country. The SDN listing of Bank Melli Iran is one such sanction.īecause Telekom Deutschland GmbH terminated its contracts with Bank Melli Iran very soon after the bank was placed on the SDN list, the bank cited Article 5(1) of the EU Blocking Regulation in its action against the termination, and Hamburg Higher Regional Court requested a preliminary ruling from the ECJ to interpret that legal provision (Hamburg Higher Regional Court, referral of questions to the ECJ on 2 March 2020 – 11 U 116/19). In order to avoid this breach of international law and to reduce restraints on international trade, Article 5(1) of the EU Blocking Regulation prohibits economic players from complying with the third-country sanctions listed in the annex to the Regulation. However, the EU considers US secondary sanctions to be contrary to international law because of their extraterritorial effect. Significant infringement of this prohibition by German and European companies places them in danger of being targeted by the US sanctions authorities and being placed on the SDN list themselves ( Noerr reported). ![]() US law prohibits all business relations worldwide, including those not related to the US, with listed entities such as Bank Melli Iran. This list also entails secondary sanctions, i.e. After the US withdrew from the nuclear deal with Iran, it placed Bank Melli Iran on the Specially Designated Nationals and Blocked Persons List (SDN list). ![]() The specific case upon which the Grand Chamber of the ECJ ruled was based on the fact that Telekom Deutschland GmbH, a subsidiary of Deutsche Telekom AG, which does significant business on the US market, terminated several telecommunications services contracts with Bank Melli Iran. The Court of Justice was faced with the difficult question of whether companies are permitted, in response to impending US secondary sanctions, to give regular notice of termination of contracts to companies subject to US sanctions without stating their reasons or whether such termination is ineffective because it constitutes an infringement of Article 5(1) of the EU Blocking Regulation (Regulation (EC) No 2271/96). The ECJ ruling in Bank Melli Iran v Telekom Deutschland GmbH (C-124/20) BackgroundĪfter receiving Advocate General Hogan’s Opinion in May 2021, the Court of Justice of the European Union (ECJ) handed down its highly anticipated ruling in the Bank Melli Iran case (C-124/20) on 21 December 2021.
0 Comments
Leave a Reply. |