EU Prefers Companies Obtain Approval Prior To Appearing In United States Courts

A communication from the European Commission…

European Commission

Brussels, Belgium

20 October 2020

The EU’s Blocking Statute is designed to protect EU companies and persons from the extraterritorial application of foreign laws and regulations specified therein. Specifically, it covers certain U.S. sanctions vis-a-vis Iran and Cuba. The EU considers the extra-territorial application of unilateral coercive measures as contrary to international law.

First, the Blocking Statute nullifies the effect in the EU of any foreign decision, including court rulings, giving effect to those sanctions. Second, it allows EU persons to recover damages for the losses they incurred because of those sanctions. Third, it prohibits EU operators from complying with such sanctions.

However, EU persons can request from the European Commission an authorisation to comply with such sanctions. If there is sufficient evidence that non-compliance would seriously damage their interests or those of the European Union, the European Commission can grant such authorisation.

As a general rule, EU companies summoned before US courts must obtain a prior authorisation from the European Commission before appearing in court.

The authorisation process is confidential. Hence, the Commission cannot comment on any specific case. Suffice it to say that all decisions on authorisation applications are taken after careful deliberations – appreciating fully all arguments and evidence concerning the possible serious damage to the interests of the applicants or the EU.

The Commission decides on such authorisations with the agreement of Member States, through the comitology procedure.