Bank Melli Iran v. Telekom Deutschland GmbH.

On December 21, 2020, the Court of Justice of the European Union (CJEU) delivered its first judgment in Bank Melli Iran v. Telekom Deutschland (Ruling).1 The Ruling focused on the interpretation and application of Council Regulation (EC) No. 2271/96 of November 22, 1996, which protects European Union (EU) businesses against the effects of the extraterritorial application of legislation adopted by a third country and actions based thereon or resulting therefrom (hereinafter Blocking Regulation). The Blocking Regulation’s Ruling is a long-awaited pronouncement because it marks the CJEU’s position about unilateral sanctions with extraterritorial application that have been imposed by the United States (U.S.) (or “secondary sanctions”). This is the first time that the CJEU has considered the Blocking Regulation. While the Ruling offers important guidance on the interpretation of key provisions of the Blocking Regulation, it ultimately leaves to national courts the decision of whether EU eco- nomic operators may be prevented from terminating a contract with a person sanctioned by the United States under a primary sanctions regime to comply with U.S. secondary sanctions. The Ruling reinforces the purpose and effects of nullifying the extraterritorial scope of a foreign law that extends the enforcement jurisdiction of that state beyond any recognized title or jurisdiction under the general rules of public international law.