At a recent symposium held by Georgetown University on the topic of economic sanctions the Deputy Assistant Secretary for Terrorist Financing and Financial Crimes (TFFC) noted in relation to the EU General Court’s call for the removal of sanctions from Bank Mellat and Bank Saderat that the world cannot let procedure stand in the way of implementation. It seems that this is a sentiment that the U.S. government is becoming more and more vocal about. There are numerous reports coming out that the U.S. is dissatisfied with all of the recent developments arising from litigation in the EU concerning sanctions targeting Iran. This dissatisfaction has caused the U.S. to begin to urge the EU to overcome the legal appeals of Iran sanctions targets in order to maintain the integrity of the strict multilateral sanctions regime. In particular, the U.S. has urged the EU to find a way to allow judges to examine classified evidence which until this time they have not been able to reveal the courts.

For those unfamiliar with the recent decisions, The EU General Court has told EU governments to lift sanctions against Bank Mellat and Bank Saderat, two Iranian banks which EU governments has stated are involved in facilitating Iran’s alleged proliferation efforts. The EU General Court made these decisions in light of insufficient evidence demonstrating that Bank Mellat and Bank Saderat are involved in financing Iran’s nuclear program.

An official from the U.S. State Department has stated that Washington has been in discussions with European governments on implementing regulatory changes that would allow European judges to view sensitive intelligence in a secure manner. This occurs in the U.S. through in camera and ex parte proceedings where such evidence is provided to the judges in private settings outside of the presence of counsel for the plaintiffs.

More than 30 cases are still pending at the EU General Court, including the cases brought by the Central Bank of Iran and the National Iranian Oil Company (NIOC). It is expected that the EU governments will appeal the rulings regarding Bank Mellat and Bank Saderat later this week. As such, this issue is far from settled and there is a long way to go before any Iranian parties targeted by EU sanctions are actually removed from their sanctions list.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrariassociatespc.com.