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The Court of Appeal confirmed[1] that a borrower under a Tier 2 facility agreement was excused from making payments because of the risk of U.S. secondary sanctions.

The court made it explicitly clear that whether or not non-performance may be excused will depend on the specific words of the affected contract and the wider context.  However, whilst fact sensitive, the decision also makes clear that the English court is likely to consider U.S. secondary sanctions as “mandatory” provisions of law.   …
Continue Reading UK Court of Appeal Says Risk of U.S. Secondary Sanctions is a “Mandatory Provision of Law” Excusing Non-Payment

On 6 July 2020, the UK Government announced the introduction of a “Global Human Rights” sanctions regime (the “GHR Sanctions”). The regime marks the first time the UK Government has imposed sanctions measures independently from the European Union and the first time it has exercised its ability to impose sanctions directly in response to human rights violations. However, the new measures do not necessarily indicate the UK’s future policy direction, and after Brexit the UK sanctions regime will look broadly similar to that of the EU.
Continue Reading New UK Sanctions Regime Introduced

On March 25, the European Commission issued guidance on the screening of foreign direct investment in the context of the COVID-19 pandemic. The Commission calls Member States to make use of existing FDI regimes to protect critical health infrastructure, supply of critical inputs, and other critical sectors. Further details can be found in our memorandum,…

Brexit has happened.  The UK is no longer an EU Member State.  What does that mean for competition law in the UK?

Has Anything Changed?

In the short term, nothing will change.  Until the end of the transition period set out in the UK Withdrawal Agreement, the rights and obligations of EU law continue to apply just as they did before.  That transition period is due to end on 31 December 2020, unless both sides agree to an extension.  So far, the UK Government has refused to consider a possible extension and has even sought to legislate against one.
Continue Reading UK Competition Law After Brexit – Plus Ça Change…

Brexit has happened.  The United Kingdom is no longer part of the European Union or the European Economic Area.  But in the short term, nothing really changes.  The UK has entered a transition period during which it remains bound by EU rules and trade policy.

Until the end of the transition period, which is set out in the UK Withdrawal Agreement, the rights and obligations of EU law continue to apply in the UK largely as they did before, although the UK will be outside the EU’s decision making institutions.  The transition period is due to end on 31 December 2020, unless both sides agree to an extension.  So far, the UK Government has refused to consider a possible extension and the UK Parliament has even legislated to prohibit the Government from agreeing one. Parliament can of course undo the prohibition but, at this point, an extension looks unlikely. Under the Withdrawal Agreement any extension must be agreed with the EU by June 2020.
Continue Reading Brexit: No Change Until end-2020; Uncertainty Thereafter

U.S. authorities take an expansive view of their jurisdiction when it comes to sanctions. They cannot, however, directly restrict persons outside U.S. jurisdiction from dealing with sanctioned persons. They therefore exert pressure on persons outside U.S. jurisdiction by threatening to designate them as sanctioned persons if they engage in certain activities contrary to U.S. sanctions policy (“Target Activities”). Sanctions imposed in such circumstances are known as ‘secondary sanctions’, and were the topic of the September 2019 judgment of the High Court of England and Wales in Lamesa Investments v. Cynergy Bank. In a ruling that will surprise many, the Court found that the risk of incurring secondary sanctions could be invoked by a party seeking to be excused from its contractual obligations under an illegality clause. While the Court’s interpretation of secondary sanctions appears questionable in several respects, parties will nonetheless need to take it into account when drafting contractual provisions.
Continue Reading High Court of England: U.S. Secondary Sanctions can Trigger Illegality Clauses

Over the past few months a number of developments have highlighted the growing pressure in favour of reactive sanctions implementation in the EU and the UK.

New EU chemical weapons sanctions regime

On October 15, 2018, the Council of the EU adopted a new programme of restrictive measures (Council Regulation (EU) 2018/1542). Where necessary to address the use or proliferation of chemical weapons, the EU is now able to impose asset freezes and travel bans on persons and entities anywhere, regardless of their nationality and location, and forbid EU persons and entities from making funds available to them.…

Continue Reading Fast-Moving Political Developments Increase the Pressure for Reactive Sanctions Implementation

In recent years, sanctions have become one of the issues of greatest concern for parties entering into international transactions. As a result, detailed contractual clauses designed to manage sanctions risks have become commonplace. The October 2018 judgment of the High Court in Mamancochet Mining v. Aegis Managing Agency[1] (the “Judgment”) has highlighted certain pitfalls in the standard wording of some sanctions clauses, and should be heeded by any party seeking to contractually protect itself from sanctions risks by, for example, making its performance under the contract conditional upon the non-occurrence of certain sanctions events, or tying a termination event to sanctions. The Judgment also casts some light on the interpretation of the EU Blocking Regulation[2] and suggests exercising contractual rights (even ones designed to ensure compliance with U.S. sanctions) does not breach the Blocking Regulation.
Continue Reading Interpreting Sanctions Clauses and the EU Blocking Regulation: The High Court of England Weighs In