The UK Department for International Trade has recently published guidance on how the UK will transpose and implement the EU Blocking Regulation (Council Regulation (EC) 2271/96) post-Brexit.
The EU Blocking Regulation seeks to counter the extra-territorial impact of certain US sanctions (the “proscribed US sanctions”), currently in respect of Iran and Cuba (please see our previous blog post on updates of the EU Blocking Regulation in respect of Iran here). During the transition period, the EU Blocking Regulation continues to have direct effect in the UK. However, from 1 January 2021, the EU Blocking Regulation and Commission Implementing Regulation (EU) 2018/1101 will form part of the retained EU law applying in the UK.
The UK Government’s guidance provides details on how the UK will implement and enforce the EU Blocking Regulation regime post-Brexit, and includes details on the following aspects of the UK’s regime:
- Jurisdictional scope of “Protected persons” – i.e. the UK persons and entities which (i) are prohibited from “complying” with the proscribed US sanctions, (ii) must report to the UK Secretary of State for International Trade where their economic interests have been affected by the proscribed US sanctions, and (iii) may recover damages caused by the proscribed US sanctions;
- Enforcement for breaches of the UK’s regime – breaches will continue to be criminal offences, however in line with the current approach under the EU Blocking Regulation, the guidance notes that the intention of the legislation is to protect UK persons from the extraterritorial effect of the relevant US legislation;
- Licensing – the guidance sets out how protected persons may apply for an authorisation from the Secretary of State for International Trade to “comply” with the proscribed US sanctions post-Brexit. The guidance notes that applying for a licence from relevant US authorities in respect of the proscribed US sanctions would amount to “complying” with those sanctions and thus require authorisation under the retained EU Blocking Regulation. It is clarified that existing authorisations granted in the EU prior to (but not after) the end of the transition period will remain valid in the UK.
- Reporting – the guidance sets out the notification requirements where a protected person’s economic interests have been affected by the proscribed US sanctions, noting that a contact form will be available and the Secretary of State for International Trade will consider whether to investigate the notified matter; and
- Damage recovery – the guidance re-iterates the ability of protected persons to recover damages arising from the application of the proscribed US Sanctions.
The UK government’s guidance follows the prior publication of the UK Statutory Instrument on the transposition of the EU Blocking Regulation into UK law post-Brexit (The Protecting Against the Effects of the Extraterritorial Application of Third Country Legislation (Amendment) (EU Exit) Regulations 2019).
A copy of the guidance is available here.