The Diplomat
The Spanish Exporters and Investors Club has recommended the EU review and update its rules to deal with US sanctions on third countries, such as the case of the Helms-Burton Act in Cuba and its possible effects on Spanish companies.
In a technical note published yesterday, the Committee for Reflection on Internationalization of the Exporters’ Club recommended to the institutions of the European Union, and especially to the European Council and the political forces that make up the European Parliament, to review and update the EU Blocking Statute, the legal tool available to the 27 member countries to protect their companies from the extraterritorial effects of US sanctions.
The Blocking Statute was introduced by the EU in 1996 to protect European economic operators from the effects of U.S. sanction measures (specifically, the Helms-Burton Act against Cuba) against third countries with which they have lawful activities. To that end, the statute prohibits EU operators from complying with sanctions unless exceptionally authorized to do so by the Commission and allows European companies to claim damages from the United States before European courts. The EU activated the Blocking Statute in August 2018 to limit the impact on European companies of US sanctions on Iran.
According to the Exporters Club, this instrument has shown, over time, “significant shortcomings”, especially in “the current context of pandemic and international restrictions on mobility and trade”, which “has highlighted the increasingly complex multi-jurisdictional regulatory and compliance landscape, which makes global trade and investment more difficult and complex”.
For this reason, and in order to strengthen the weak points of this legal tool and provide it with the means to act effectively in practice, the authors of the technical note of the Reflection Committee – led by the expert in commercial and international law José María Viñals – have recommended the creation of a supervisory body responsible for reviewing compliance with the Statute, investigating potential breaches, defining doctrinal criteria for interpretation and clarifying the specific application in the different factual scenarios.
The study also proposes the adoption of new technologies, such as the digital euro, stablecoins or blockchain, so that they can act as bridges in a blockade situation and counteract the predominance of the US dollar in international trade. It also stresses the importance of judicial cooperation between Member States when implementing precautionary measures that grant prior protection to operators in the face of an extraterritorial regulation, “or, specifically, by the Helms-Burton Act”, and defends economic diplomacy to strengthen the position of the European Union in terms of international legal cooperation.
