8 August 2018 US sanctions against Iran: European Union Regulation 2271/96 (Blocking Regulation) Background The Club’s Circular issued on 29 May 2018 outlined the potential repercussions for shipowners and insurers that will arise from the US Administration’s decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) agreement signed by China, France, Germany, Russia, the United Kingdom, the United States, the European Union (EU) and Iran. As previously advised, the US withdrawal from the JCPOA and the decision to reactivate the nuclear-related laws that were waived in order to implement the JCPOA will have significant ramifications for maritime trade with Iran and the insurance of such trade. Action taken by the European Union to preserve the JCPOA In an attempt to maintain the principles established under the JCPOA framework, to facilitate the continuation of trade activities between European businesses and Iran and to counteract the extraterritorial effect of US secondary sanctions, the EU has replaced the annex to Council Regulation (EC) No 2271/96, otherwise known as the Blocking Regulation. Commission Delegated Regulation (EU) 2018/1100 of 6 June 2018 gives effect to the replacement of the annex from 7 August 2018. The new annex sets out, among other things, the US laws, regulations and other legislative instruments relating to trade with Iran from the Iran Sanctions Act 1996 onwards that have been subject to waivers under the JCPOA since 16 January 2016. Those waivers cease to have effect on a phased-in basis from 6 August 2018 with a final date of 4 November 2018 by which date the performance of contracts for certain trade activities, including the transport of oil cargoes, must be either executed or terminated. Here are the links to the various documents: 1. Commission Delegated Regulation (EU) 2018/1100 which includes the new annex https://eurlex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32018R1100 2. Commission Implementing Regulation (EU) 2018/1101 https://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=uriserv:OJ.LI.2018.199.01.0007.01.ENG&toc=OJ:L:2018:199I:TOC 3. Commission Delegated Decision (EU) 2018/1102 https://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=uriserv:OJ.LI.2018.199.01.0011.01.ENG&toc=OJ:L:2018:199I:TOC 4. Template for Applications for Authorisations under the Regulation https://britanniapandi.com/wpcontent/uploads/2018/08/TEMPLATE-FOR-APPLICATIONS-FOR-AUTHORISATIONS-08-2018a.pdf 5. Guidance Note issued by the European Commission https://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=uriserv:OJ.CI.2018.277.01.0004.01.ENG&toc=OJ:C:2018:277I:TOC See also the following link to the EU website http://ec.europa.eu/dgs/fpi/what-we-do/blocking_statute_en.htm The International Group has engaged extensively with the Office of Foreign Asset Control (OFAC) in the US, the European Union External Action Service, the European Commission, the UK Treasury and Foreign Office and EU Member States in order to explain some of the practical effects of the reactivation of US secondary sanctions on shipowners and insurers and the potentially complex legal scenario that could arise as a result of EU natural and legal persons complying on the one hand with the reinstatement of US measures, while on the other hand facing a potential exposure to a law suit by virtue of a civil action taken under the Blocking Regulation. Under that Regulation, a national of an EU Member State or a legal person incorporated within the EU which suffe