Frankfurt case navigates cross-jurisdictional legal challenges
In the case at the Higher Regional Court in Frankfurt involving Bank Melli and Citibank New York, the conflict centered on a series of transactions that were blocked due to the intersection of U.S. and EU sanctions regimes. Bank Melli, operating through its European branches, initiated financial transfers that were processed by Citibank’s New York branch. However, under U.S. Executive Order 13382—targeting Iranian entities linked to nuclear activities—Citibank refused to execute the payments. Bank Melli argued that the transactions were permissible under European Union sanctions laws, which allowed for certain financial activities under EU regulation 961/2010.
Citibank’s defense rested on its obligations to comply with U.S. law, specifically Executive Order 13382, which mandated blocking the payments to avoid severe penalties. This position was taken despite the transactions being legal under EU regulations. The case underscored the complex legal dilemma faced by global banks navigating jurisdictions with conflicting legal frameworks. Ultimately, the Higher Regional Court in Frankfurt ruled in favor of prioritizing EU law within European borders, reaffirming the sovereignty of European regulations. However, the court also acknowledged Citibank’s significant challenges in balancing compliance with U.S. sanctions while maintaining operations in a globalized financial environment.
Tehran Bureau submitted a request through FragDenStaat to the Oberlandesgericht Frankfurt seeking detailed case information, including the identification of parties, court hearing protocols, evidence lists, and financial documents for the case 23 U 30/10. The responses confirmed key case details, such as the involvement of Citibank N.A. New York as the defendant and Bank Melli Iran as the plaintiff, but access to sensitive records was deferred to the Landgericht Frankfurt due to confidentiality and jurisdictional limitations. These inquiries are part of ongoing efforts to ensure transparency and address the cross-jurisdictional legal complexities of this case.