Europe’s last real experiment in sanctions defiance has now ended with a regulatory whimper after it snapped back sanctions on Iran.

The EU’s decision to return to the sanctions policies it paused after the 2015 Iran nuclear deal (JCPoA) has revealed the weaknesses of the Blocking Statute, a mechanism created to protect European businesses with lawful dealings in the Islamic republic. Updated in 2018 as a legal shield for European sovereignty, the Statute was meant to counter US extraterritorial coercion after Washington abandoned the JCPoA. At the time, it seemed to mark a red line against decades of increasing U.S. sanctions encroachment.

Seven years later—and after dozens of expensive court disputes and damages claims from affected Iranian plaintiffs—the Statute has disappointed those who expected a meaningful assertion of EU self-reliance. None of the lawyers, diplomats, or policy experts interviewed for this article had a positive view of its implementation. “It’s dead in the water,” said one prominent British sanctions lawyer. “The government should amend it or scrap it entirely. It’s a useless document now.”

The Statute’s purpose was straightforward: EU operators were prohibited from complying with designated US sanctions against Iran, and firms could recover damages for losses caused by the application of those foreign laws inside the EU. While this was envisioned as a bold expression of European legal sovereignty, the Statute became largely symbolic. Brussels spoke the language of defiance but hesitated to generate the political or commercial friction necessary to enforce it. Practitioners dealing with Iran during this period agree the Statute did not alter commercial outcomes in any predictable or enforceable way. “It’s meaningless,” said a former E3 ambassador involved in JCPoA diplomacy during its window of applicability.

What Went Wrong?

From the outset, the Statute contained escape hatches that weakened its force. Companies could request authorization from the Commission to comply with prohibited US sanctions if ignoring them would cause “serious harm.” Courts then transformed a categorical “shall not comply” obligation into a balancing test by adopting proportionality reasoning, allowing firms to plead commercial viability as a legal defence.

In its landmark Bank Melli v. Telekom Deutschland ruling, the Court of Justice (CJEU) confirmed that following US sanctions breached EU obligations but held that violations could nevertheless be excused when obeying EU law would inflict disproportionate or commercially destructive harm. 

German courts expanded this logic further, accepting speculative exposure to US penalties as sufficient justification for non-compliance. They used the Sekundäre Darlegungslast doctrine, which lets a court require a company to explain itself when it alone holds the facts, placing the burden on the company rather than the plaintiff. This shifted evidentiary burdens in favour of firms claiming risk. 

A similar dynamic emerged in the Netherlands, where prosecutors declined to pursue a Blocking Statute violation after a company voluntarily disclosed Iran-related exports to US authorities, effectively treating anticipatory US compliance as an excusable response to regulatory ambiguity.

The judicial embrace of proportionality has created striking outcomes. A Frankfurt court this summer awarded damages to an Iranian-German client whose bank closed his accounts in violation of the Statute, but the court refused to reinstate those accounts, denying the very restitution the Statute was designed to provide. The case reflects the increasing authority of commercial comfort as a determinant of legality, with judges accepting economic exposure as grounds to disobey political or legal commitments that once would have been considered categorical.

One German lawyer suggested that, in recent years, Europe’s own growing interest in extraterritorial regulation—particularly in response to China and Russia—has made Brussels reluctant to criticize Washington’s sanctions practices too aggressively. When asked whether the Statute should be formally repealed, this same lawyer argued that it should remain as an “empty framework to fill when needed,” even if unenforced.

Europe’s newer self-protection instruments show similar design constraints. The Anti-Coercion Instrument (ACI), widely presented as a major innovation in EU economic statecraft, is structurally limited by the same deference to market continuity that blunted the Blocking Statute. Maintaining frictionless access to international markets has become a powerful constraint on Europe’s willingness to impose meaningful countermeasures against coercive state actors. If the original sovereignty statute could be hollowed out through proportionality clauses, waivers, and evidentiary shortcuts designed to avoid judicial enforcement of foreign-policy preferences, future instruments are likely to face the same pressures unless the EU is willing to internalize greater commercial cost.

The fanfare that greeted the 2018 Blocking Statute has vanished. Europe’s effort to preserve legitimate trade with Iran and defend its own legal order faded into a slow retreat, culminating in a complete snapback of the sanctions regime, accompanied by language indistinguishable from Washington’s. The Statute technically remains on the books, but only as a monument to managed impotence—an embarrassing pillar of sovereignty that nobody wishes to enforce, reform, or remove. It captures a broader political mood: Europe continues to speak the language of autonomy while practicing habits of subordination.

Ali Ahmadi, a former Iranian diplomat involved in the JCPoA negotiations, argues that the Blocking Statute “can be effective if Europe has power,” but power asymmetry with the United States is now too great for the Statute to be practically usable. The limitation is structural, he says: the Statute was “never about legal framework” but about whether Europe was prepared to bear the political costs of enforcement. Because it was not, “Europeans don’t mean anything they say,” not as deception but as a chronic lack of agency. He believes the Statute illustrates Europe’s broader “impotence,” as the continent repeatedly discovers that enforcing its nominal sovereignty would require openly confronting US power. With snapback last month, Ahmadi concludes, Europe has been reduced to “an appendage” of the United States, no longer viewed— even aspirationally—as an honest broker.

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When negotiations over Iran’s nuclear program broke down during the Trump administration, the EU defiantly passed laws to protect its businesses from US sanctions. On paper, the so-called Blocking Statute asserted EU legal independence and offered a lifeline to Iran-related commercial interests. In practice, it bottlenecked the legal system, cost firms and taxpayers millions, and has become an irritation for those working in sanctions law. After seven years of operation, pundits across both Europe and Iran now describe it as a farce.

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Germany has long been a focal point of the Iranian regime’s covert operations. While the country offers a refuge for activists and journalists fleeing Iran’s oppressive tactics, it also serves as fertile ground for the regime’s economic enterprises—many of which are linked to the Iranian Revolutionary Guard Corps (IRGC). This troubling dichotomy highlights the reality that, as threats against critics of the regime escalate—including potential terrorist acts—Germany’s legal and economic landscape is still fertile ground for the Iranian regime’s illegal operations. 

In the past year, Tehran Bureau collaborated with German media outlets to cover the activities of the Islamic Revolutionary Guards (IRGC) on German soil and the Berlin government’s shifting perspective on Iran:

• The article from ZDF titled “Wie Irans Revolutionswächter in Deutschland Terror planen” (“How Iran’s Revolutionary Guards Plan Terror in Germany”) discusses the involvement of Iran’s Revolutionary Guards, specifically the Quds Force, in orchestrating attacks on Jewish institutions in Germany. It highlights the case of Ramin Yektaparast, a former leader of the Hells Angels in Mönchengladbach, who fled to Tehran after allegedly committing a murder in 2014. German security agencies believe that from Iran, Yektaparast coordinated a firebomb attack on the new synagogue in Bochum and a shooting at the rabbi’s house in Essen in November 2022, under the direction of the Quds Force. The article notes that Iran increasingly employs intermediaries from criminal milieus for such operations, posing new challenges for security authorities. These findings could potentially lead to the European Union designating the Revolutionary Guards as a terrorist organization.
• The article titled “Ein Brandsatz zu viel” (“One Firebomb Too Many”) from taz discusses Germany’s evolving stance toward Iran’s Revolutionary Guards (IRGC) and the potential designation of the group as a terrorist organization by the European Union. The catalyst for this shift was a failed arson attack on a synagogue in Bochum, Germany, on November 17, 2022. The suspect, identified as Babak J., was arrested shortly after the incident. Investigations revealed that he had connections to the IRGC, suggesting that the attack was orchestrated under their influence.
• This incident prompted German Foreign Minister Annalena Baerbock to advocate for the inclusion of the IRGC on the EU’s terrorist list. Such a move would require unanimous approval from all EU foreign ministers. While discussions are ongoing, there appears to be growing support for this designation within Brussels. If implemented, it would mark a significant shift in the EU’s policy toward Iran, signaling a firmer stance against the IRGC’s activities in Europe.
• The article “Revolutionary Guards: Why Iran’s Elite Force Should Be Considered a Terrorist Group” from Der Spiegel discusses the European Union’s consideration of designating Iran’s Islamic Revolutionary Guard Corps (IRGC) as a terrorist organization. This move is in response to the IRGC’s alleged involvement in orchestrating attacks on European soil.

Iran’s repressive tactics over time

The foiled attack in Bochum was just one of many operations connected to Iran’s intelligence services in Germany. Silencing critics by any means necessary has been their constant objective since 1979.

The 1990s: Extrajudicial killings 

One of the Islamic republic’s most notorious operations on German soil was the 1992 Mykonos restaurant assassinations, in which four Kurdish opposition leaders were shot and killed by operatives linked to Iranian intelligence. The ploy illuminated the scale of Iran’s extraterritorial operations against dissidents, including the singer and critic Fereydoun Farrokhzad, who was murdered in Bonn just one month prior to the Mykonos attack. 

Following the Mykonos trial in 1997, which implicated senior Iranian officials, Tehran temporarily scaled back its European activities. This changed after the Arab Spring and Syrian Civil War, as Iran escalated its regional influence and repression of critical voices. Iranian journalists and dissidents in Europe have since faced increasing threats and aggression.

2012-2016: The era of lobbyists

A renewed campaign of threats and harassment targeting critics abroad was initiated by the so-called reformist government of President Hassan Rouhani and Mohammad Javad Zarif, Iran’s then-Foreign Minister. This escalated especially after the Joint Comprehensive Plan of Action (JCPOA) was signed in 2015. As Iran sought to rehabilitate its international image and reintegrate into the global economy, it also sought to silence anyone jeopardizing these efforts. Dissident journalists living in exile, especially those critical of the regime’s domestic policies and foreign interventions, became prime targets. Tehran’s fear was that these critics could undermine the narrative it was presenting to the world, particularly regarding its nuclear program and regional ambitions.

To improve its public image and steer the negotiation of the nuclear deal (JCPOA) in its favor, the Islamic republic also employed a large group of well-placed experts to influence the opinions of policymakers and the public in key jurisdictions, such as Germany and the United States.

This trend did not go unnoticed by some German media outlets, who criticized their colleagues for their lack of scrutinous coverage of the political protests. A 2022 Ueber median article highlighted the role of lobbyists, specifically those who frequently appear in German media as Iran experts. It criticizes the lack of transparency about their affiliations, noting that their ties to the Iranian regime are often downplayed or ignored. This, the article argues, allows such figures to influence public discourse in Germany in ways that align with the regime’s interests, effectively serving as a form of propaganda under the guise of expertise.

The 2017 Protests: New types of intimidation

Since 2017, mass protests in Iran have marked a shift in the nature of dissent in the country, with demonstrators openly defying the government and the regime despite brutal crackdowns.  Facing mounting domestic unrest and economic hardship, the Iranian regime once again ramped up its extraterritorial operations. Journalists, human rights activists, and dissidents living in Europe were viewed as a growing threat. Tehran’s intelligence services began using more sophisticated tactics and shifting their focus on journalists. 

A Germany-based Iranian journalist who spoke to Tehran Bureau on condition of anonymity due to ongoing threats against his family in Iran said this shift was confirmed by one of his colleagues in Tehran with access to Iran’s intelligence services. 

“He told me… there was a meeting with the intelligence service … and they wanted to be more active against Iranians, journalists, especially those working abroad,” the journalist explained. 

Threats against journalists aren’t particularly new. “We always had emails, threats, and letters from the start,” the journalist said, adding that most of the threats were contained to harassment on online platforms. At that time, the threats felt generic, with vague messages like “We’ll show you,” aimed more at silencing than inflicting direct harm, he explained.

But the nature of these threats had changed significantly, the source said, shifting from threatening e-mails and online trolling to personal attacks. 

 “Around three years ago, things got much more direct,”  he continued. There was a shift from indirect social media intimidation to more aggressive and coordinated attacks. On one occasion, the source’s Instagram account saw a sudden influx of 120 new followers within just a few hours, all with Iranian names. “We had over 120 new followers in three hours—all private accounts with no posts. It felt like a “signal,” he said.

Additionally, the regime intensified its pressure by interviewing those close friends of the journalist who traveled back and forth from Germany to Iran. These individuals, once trusted, were likely reporting back to Iranian authorities.“There are people I know who travel to Iran, and sadly, they can no longer be trusted,” he explained.

Iranian authorities operate a sophisticated surveillance system that extends well beyond their borders, effectively maintaining control over the diaspora. This system begins at points of entry, such as Imam Khomeini International Airport (IKIA) in Tehran, where individuals returning from abroad—particularly those tied to regime-critical circles—are flagged and subjected to intense investigation. According to  Iranians who travel back and forth and the Swiss Refugee Aid (SFH) report, the regime employs spies, facial recognition technology and detailed social media monitoring to identify and track journalists, dissidents, and people connected directly or indirectly to dissidents.  

The journalist shared how the Iranian Revolutionary Guard’s intelligence service interrogated a female friend of his in Iran, asking her about her relationship with him. “They asked her what kind of relationship she had with me, and she responded, ‘He’s a good friend of mine, and we’ve known each other for years. I visit him from time to time.’ Then they asked, ‘Do you know what he does?’ to which she said, ‘Yes, he works as a journalist.”

This questioning raised concerns for the journalist. “At first I didn’t think much of it, but then I started receiving anonymous phone calls, where I was told that our “black portrayal” of Iran was only damaging the Iranian people and that if we didn’t stop, there would be consequences.”

The anonymous callers made sure to remind him that his work was being watched and that the stakes were high.

Other sources have recounted similar intimidation tactics used by the Iranian regime. Parastou (which translates to “swallow” in English) refers to women deployed by Iranian intelligence to seduce, manipulate, and gather information from opposition figures, especially those within the Iranian diaspora. These women, often posing as activists or supporters of opposition groups, are involved in espionage and psychological operations aimed at gaining the trust of their targets.

The tactic is akin to a classic “honey trap” in espionage, where seduction is used to either compromise the target or extract sensitive information. 

Another source shared a personal encounter, recalling how a woman, posing as a left-wing activist, appeared at his and his wife’s doorstep. Though hosting activists had been common for him and his wife, they sensed something was wrong and turned her away. It wasn’t until months later that they learned she was indeed a Parastou, embedded in the regime’s vast espionage network. 

More recently, Iranian dissidents in Germany have been subject to extreme acts of violence, including politically motivated crimes like the rape of an Iranian man in Iserlohn, allegedly by supporters of the Islamic Republic. This attack, described by authorities as a means to “humiliate” the dissident, highlights the brutal measures employed by regime loyalists to intimidate critics, even on German soil. Similarly, in 2023, an Iranian man in western Germany was arrested on suspicion of plotting a chemical terror attack using cyanide and ricin, further illustrating the dangerous reach of Tehran’s operatives. 

Cases of online spying on against Iranian dissidents and organizations based in Germany are also increasing, recent findings suggest. Since 2022, the Iranian state-backed hacking group “Charming Kitten” has repeatedly targeted journalists, human rights activists, and lawyers critical of the Iranian regime, according to the German Federal Office for the Protection of the Constitution (BfV).

Silencing journalists through legal intimidation

The Iranian regime’s intimidation tactics extend far beyond physical threats and digital harassment. They are complemented by sophisticated legal maneuvers aimed at silencing critical voices, especially when investigations delve into the regime’s financial and business activities in Europe. These legal attacks, often in the form of Strategic Lawsuits Against Public Participation (SLAPPs), serve a dual purpose: to overwhelm journalists and small publications with expensive legal battles, and to shield powerful Iranian financial entities from scrutiny.

One such case involved a journalistic investigation into a large Iranian financial conglomerate that operates in multiple sectors like banking, insurance, and real estate. The bank operates in European financial markets, offering foreign exchange, credit scoring, and electronic payment services. Despite U.S. sanctions, it maintains operations in Frankfurt and Rome. The journalist recounted how his publication’s investigation into this conglomerate’s corrupt dealings, which involved billions of dollars, led to swift legal action. “They hired one of the most expensive media law firms in Germany to sue us for defamation,”  he said. The legal battle became too costly for the small publication and forced them to retract critical information, including the names of key figures involved in the corruption. “We were forced to remove names not because we lacked evidence, but because we simply couldn’t afford to keep fighting.

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This judgment from fall 2019 involves an Italian company which concluded a supply contract with an Iranian company that later became subject to US sanctions, according to a report by the European Commission and the legal resource Global Sanctions. The payment by the Iranian company was frozen by the Italian company’s bank. 

The date of the judgment is likely on or before 2 October 2019, when Global Sanctions first reported on the case.

The court ordered the release of the funds as, under the Blocking Statute, the sanctioning of the Iranian company by the United States Treasury’s Office of Foreign Assets Control (OFAC) is not recognized within the European Union.

Most of the relevant details of this case, including the name of the court, are not publicly available. Tehran Bureau is in the process of filing Freedom of Information requests in Italy and the European Commission. 

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On 18 March 2025, Germany’s Federal Court of Justice (Bundesgerichtshof, BGH) handed down a key ruling in a long-running dispute between Clearstream Banking AG and an Iranian financial institution with a branch in Munich. The case centred on securities worth about €10.5 million, purchased in 2019, which were later frozen by Clearstream. The Iranian bank sued for damages, arguing that Clearstream’s actions unlawfully deprived it of access to its assets.

The background stretches back to August 2019, when Clearstream placed a freeze on the securities. In January 2020, the Iranian bank attempted to issue a disposal order, but the transaction was never carried out. By October 2020, the U.S. Treasury had expanded its sanctions regime with Executive Order 13902, imposing sweeping financial restrictions on Iranian entities. Clearstream’s earlier freeze thus collided with a changing legal landscape, straddling both U.S. and European rules.

In its decision, the BGH’s XI Civil Senate (Case No. XI ZR 59/23) held that the Iranian bank could not claim contractual damages, since it had no direct custody agreement with Clearstream. The judges rejected the argument that Clearstream owed the bank contractual duties, effectively shielding the Frankfurt-based institution from liability on that front. However, the court left open a possible path to recovery through tort claims under Section 823(1) of the German Civil Code, which addresses unlawful interference with property rights.The ruling also clarified the limits of the EU’s Blocking Regulation. The court found that Article 6(1), which provides for compensation in certain cases of unlawful compliance with foreign sanctions, did not apply to the Iranian bank, as it was neither an EU entity nor a protected subsidiary. For Clearstream, the decision narrows the scope of potential liability but keeps alive the possibility of tort-based claims. For international custodians, it highlights the precarious position of financial intermediaries caught between U.S. sanctions and European legal protections.

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The Frankfurt Federal Constitutional Court issued a verdict in 2022 ordering an unnamed German company to pay back 35.9 million Eur to its former Iranian client after terminating a supply contract due to the reimposition of US sanctions against the client’s Iran-based parent company. 

A company wholly owned by an undisclosed Iranian parent sued a German graphite electrodes provider over a contract termination. The German company halted its supply after the Iranian parent company was listed as an SDN on October 16, 2018. 

Court documents show the German firm’s reluctance to repay the advance, arguing that doing so could place it on the SDN list. The court ultimately ordered the company to uphold its contractual obligations, highlighting the EU’s commitment to shielding domestic entities from extraterritorial enforcement of foreign sanctions through mechanisms like the EU Blocking Statute.

The case AZ: 2-05 O 406/18 began with the claimant, a subsidiary of an Iranian company, filing a lawsuit against the defendant, a company specializing in graphite electrodes. The legal journey started at the Regional Court of Frankfurt, where the claimant sought the return of a substantial prepayment, alleging that the defendant had failed to meet delivery obligations. The defendant, however, defended its actions, citing compliance with U.S. sanctions, which it argued were in line with the EU Blocking Regulation. 

On 1 April 2022, the Regional Court of Frankfurt ruled in favor of the claimant, ordering the return of the funds. The defendant subsequently appealed the decision, taking the case to the Higher Regional Court of Frankfurt (OLG Frankfurt) under case number 17 U 90/22. The Regional Court of Frankfurt issued an initial ruling on April 1, 2022, in favor of the claimant, ordering the return of the funds. 

The defendant appealed the decision, escalating the case to the Higher Regional Court of Frankfurt (OLG Frankfurt) under case number 17 U 90/22, where arguments focused on navigating the complexities of both U.S. sanctions and the EU Blocking Statute, which aims to protect EU entities from extraterritorial laws. 

In connection with AZ: 2-05 O 406/18, Tehran Bureau submitted a request for access to the court documents on July 5, 2024. The request specifically aimed to investigate the parties involved in the graphite electrodes dispute and their connection to sanctions against Iran. Tehran Bureau sought access to regulatory communications about sanctions and complete contractual documentation. Despite expecting a response by August 7, 2024, Tehran Bureau did not receive any feedback by the deadline.

Industry overview

Graphite electrodes are used in electric arc furnaces to melt scrap steel and produce new steel efficiently. They are also essential for refining metals and conducting high-temperature processes in the metallurgical and chemical industries.

The main Iranian conglomerate active in this field is IMIDRO, a state-owned holding company overseeing Iran’s mining sector, with subsidiaries in steel, aluminum, copper, cement, and mineral exploitation. In 2013, the then-head of the organization, Mehdi Karbasian announced that international companies were interested in a joint venture with Iran in metals, according to state-owned media reports. 
In the statement, Karbasian specifically mentioned German engineering company SMS Group as a front-runner. SMS Group has previous experience in Iran with Hormozgan Steel and Mobarakeh Steel, he added. Three years later, in 2016, Karbasian announced the implementation of a graphite electrodes project with “the help of Germany.”

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Insurers must honor policy despite U.S. sanctions concerns, clarifying the application of sanctions clauses in European insurance contracts, a court in the United Kingdom decided in October 2018.

In the case Mamancochet Mining Ltd v. Aegis Managing Agency Ltd & Ors [2018] EWHC 2643 (Comm), Mamancochet Mining Ltd sought approximately €3.8 million in damages. The dispute centered around the refusal of insurers to pay out under a marine cargo insurance policy following the imposition of U.S. sanctions on Iran. The insurers argued that making the payment would expose them to the risk of violating sanctions, while Mamancochet contended that they were still entitled to the insurance payout.

The case ultimately addressed the interpretation of sanctions clauses within insurance contracts and whether payment under the policy would breach EU sanctions law, according to the law firm  Skadden, Arps, Slate, Meagher & Flom LLP. 

Mamancochet Mining Company Overview

Mamancochet Mining Limited (MML) was registered in the UK on October 14, 2011. Its current board of directors consists of  Stephane Abraham Joseph NAHUM (French), Eileen Marie SAWYER (British) and Patrick Colin O’DRISCOLL (Irish). O’DRISCOLL was named on the incorporation documents of MML as company director. NAHUM is on the board of 391 companies, SAWYER is on the board of 152 companies and O’DRISCOLL is on the board of 238 companies. All of these companies are registered at “4th Floor, Millbank Tower, 21-24 Millbank” in London.  Nahum became MML’s director in 2018. Sawyer was named as the company’s new director in 2022.

MML’s articles of incorporation name a company called BC Minerals and Metals Limited, which is registered in the British Virgin Islands, as its shareholder. BC Minerals and Metals Limited’s address is listed as “P.O. Box 3174; Road Town; Tortola; British Virgin Islands” which is in the ICIJ database of offshores.

A 2012 filing adds RB Resources Limited , also registered in the British Virgin Islands, as the second shareholder of MML. 

In 2015, MML declared its assets as £10.63 million  and its payments and accrued income as £93k. MML’s 2016 assets were declared as £10.64 million pounds  and its payments and accrued income as £192k. 

In 2017 an audit report was released on MML which states that it has received £10.62 million in assets from BC Minerals and Metals Limited and that Aldersgate Investments Limited is another one of its creditors that it has received £223k from.

MML’s parent company is RB Resources Limited and its ultimate parent company is RB International Limited. All of these companies are registered at the “P.O. Box 3174; Road Town; Tortola” address in the British Virgin Islands. 

RB International Limited is also in the ICIJ database and connected to a series of shell companies. 

In 2019, MML’s new shareholder was named as RB Oil Limited also registered in the British Virgin Islands. And in the financial audit report from the same year, MML’s immediate parent company was named as RB Oil Limited instead of RB Resources Limited. The company’s financial audit statements for 2022 once again named RB Resources Limited as MML’s immediate parent company. 

 None of these companies have websites.

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The Regional Court of Bonn (LG Bonn, Urteil vom 14.05.2019 – 10 O 505/18) ruled in favor of a German subsidiary of an Iranian metal conglomerate after a German telecommunications provider terminated their contracts over U.S. sanctions concerns. The telecommunications provider claimed that maintaining the business relationship posed reputational risks and potential non-payment issues due to Iran-related sanctions. 

However, the court found the extraordinary termination of the contracts unjustified, siding with the Iranian-linked company’s subsidiary. Though regular termination of certain contract components was upheld, the ruling underscores European legal protections for sanctioned entities within the EU, despite U.S. pressure.

The identity of the involved parties was not publicly disclosed during. Tehran Bureau requested this information from the Regional Court of Bonn on 14 Oct 2024, and was still awaiting a response as of publication time. 

This ruling was later upheld by the Cologne Higher Regional Court (7 February 2020, Case 19 U 118/19). The court confirmed the Bonn court’s decision, emphasizing that the EU Blocking Statute does not impose a mandatory obligation to continue business relationships. The telecommunications provider’s termination was deemed lawful, as no specific reason was required under the ordinary termination clauses of the contract.

Tehran Bureau submitted a request for file inspection to the Cologne Higher Regional Court 5 July 2024. The court acknowledged receipt of request regarding 19 U 118/19 on 8 July 2024. However, in a response dated 18 July 2024, the court denied the application, citing the limitations of regional information access laws, which exclude judicial matters from their scope. 

This denial underscores the legal boundaries that restrict public access to certain types of judicial documents. In their decision, the court cited the independence of the judiciary as a key reason for the denial. Unlike administrative documents, court records are not automatically available to the public, and access is often limited to the involved parties or those able to demonstrate a compelling public interest.

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In this case, the plaintiff was an international logistics company specializing in global container shipping. The defendant was a  German savings bank (Sparkasse) based in Hamburg. The dispute arose after the bank terminated the company’s account, citing concerns related to U.S. sanctions against Iran.

The value in dispute was set at 25,000 Euro, according to the case file.

The plaintiff sought a preliminary injunction to compel the bank to maintain the account until a suitable alternative could be found. The court ultimately denied the injunction, ruling that the bank’s termination of the account was lawful.

The court found that the bank could not justify its account termination solely based on U.S. sanctions concerns, underscoring that European banks must consider EU protections for clients facing extraterritorial sanctions. This ruling reaffirms the EU’s stance on maintaining financial ties within Iran and other territories despite external pressures.

The German court notified the European Commission to ask for clarification of the Blocking Statute, according to EC documents.

The identity of the plaintiff has not been publicly disclosed. Tehran Bureau has requested this information from the Hamburg Regional Court. 

Procedural History 

On October 15, 2018, the Regional Court of Hamburg (Landgericht Hamburg), 18th Civil Chamber, denied the application for the preliminary injunction (AZ: 318 O 330/18). The company appealed this decision to the Higher Regional Court of Hamburg (Oberlandesgericht Hamburg), under case number 13 U 53/18.

Tehran Bureau submitted a request for access to court documents related to this case on July 18, 2024, to investigate the parties involved, the evidence presented, and the broader implications for EU sanctions and banking regulations. The Regional Court of Hamburg responded, citing legal restrictions under the Hamburg Transparency Law (HmbTG) as the reason for denying access. Despite further inquiries in October 2024, no additional access has been granted.

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In this 2020 ruling, the European Court of Justice (ECJ) upheld the right of German bank Sparkasse Südholstein to terminate accounts with Iranian clients due to compliance with U.S. sanctions. The case, identified as C-639/18, revolved around the European Union’s Blocking Statute, which prohibits EU companies from adhering to certain non-EU sanctions, such as those imposed by the United States. 

The name of the Iranian client, an individual identified only as “KH” in the court documents, has not been publicly disclosed.

The court clarified that while the Blocking Statute prevents the enforcement of foreign sanctions within the EU, it does not entirely preclude European businesses from taking protective steps if they can demonstrate a legitimate risk of repercussions from U.S. authorities. The ruling underscores a complex balancing act between EU legal autonomy and the influence of global sanctions, highlighting how EU companies navigate restrictive policies imposed by other countries.

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In a legal battle between GITI TAJHIZ TEB CO, an Iranian medical equipment distributor, and BIO-RAD, a French subsidiary of BIO-RAD Laboratories, the Paris Court of Appeal ruled February 25, 2015 that BIO-RAD breached its contract by halting deliveries to the Iranian company. The dispute centered on contracts signed in 2009 and 2010, which granted GITI exclusive rights to distribute BIO-RAD’s medical diagnostic products in Iran.

The court heard that BIO-RAD stopped fulfilling the contracts in 2010, citing U.S. sanctions against Iran, which prohibited the parent company from conducting business with Iranian entities. GITI sought €21.3 million in damages, claiming lost profits, reputational harm, and additional penalties tied to the disruption in deliveries.

While the court agreed that BIO-RAD had violated its contractual obligations, it recognized the company’s dilemma under conflicting international regulations. As a result, the court reduced the damages to €300,000, significantly less than the amount initially sought by GITI. The court rejected GITI’s claims for reputational damage and additional financial penalties, focusing instead on the lost profits from its contracts with the Iranian Blood Transfusion Organization.

Giti Tajhiz Teb Co. Overview

Giti Tajhiz Teb (GTT) was founded in 2009 to import “lab and medical equipment,” according to its articles of incorporation. The company does not have a website; its only online presence is an Instagram page which claims the firm is the representative for Bio-Rad in Iran and advertises Elisa Test kits and machinery. 

A review of publicly available business records and media confirms links to Iran’s Blood Transfusion Organization (IBTO), linked to the health ministry. The IBTO is a government-run organization that is managed by Iran’s health ministry. It is Iran’s sole authority in the supply and distribution of blood products. The IBTO is mentioned as GTT’s client in the French court documents.

The owners of GTT also own Faravar Azma Iranian (FAI) which was also founded in 2009 with the aim of “Manufacturing, designing, installation, and implementation of all medical and laboratory equipment, and providing the necessary human resources for the company,” according to its website.

FAI’s YouTube channel features several videos from 2018 where Fardavar inaugurated what was deemed the “biggest factory producer of blood bags in Western Asia,” in partnership with a French company, Macopharma. The factory was named Macopharmafardavar and the inauguration ceremony was attended by the then-health minister Hassan Ghazizadeh Hashemi, the then head of the IBTO Ali Akbar Pourfathollah, who has a personal connection to Haj Maghani on Facebook. 

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In July 2020, the EU General Court annulled sanctions on Neda Industrial Group, an Iranian electrical utility supplier. The fact that the applicant had provided services at Natanz, a uranium fuel enrichment plant, in 2006 was not sufficient to support listing in 2018, because Neda’s activities were lawful under the JCPOA, according to the Global Sanctions sanctions case law archive. 

The annulled sanctions included the unfreezing of funds and economic resources. The specific amount of funds frozen in the case is not publicly disclosed.

Overview of Neda Industrial Group

Neda Industrial Group has undergone three name changes since its founding in Kerman. Its executives appear in the business network of businessman-politician Gholamreza Tajgardoon, an oligarch whose activities are detailed in Tehran Bureau’s Political Business Empires investigation.

The company was founded in Kerman in 1984 under the name Pariz Industries  to “manufacture electrical, electronic, mechanical, and computer devices and equipment, provide industrial, research, and educational services in the aforementioned fields, as well as the import, export, and trading of permissible commercial goods, and participation in tenders.” The company’s name was changed to Rizpardazandeh Neda (Neda Microprocessor) in 1986. 

In 1992, the Kerman-based company opened a branch in Tehran, and in 1993, the company’s articles of incorporation were amended and the company’s scope of work became  “Manufacturing of electronic, computer, and industrial control devices and equipment, providing industrial, research, and educational services in the aforementioned fields, as well as the import, export, and trading of goods related to the company’s mandate, and participation in tenders.”

At some point between 1993 and 2011 the company underwent a third name change and became Neda Industrial Group, according to company registration documents. In 2012 the company underwent its final name change to become Novin Danesh Ayandeh (Neda).

According to its website, Neda initially focused on automation and later expanded its activities to include “electrical utilities for different industries, renovation & retrofit of various plants” and finally “engaged in the supply of a vast range of instruments, F&G & Fire Fighting equipment, industrial analyzers, furnace temperature scanners, and industrial valves.” 

Neda’s website also states that it is active in the oil & gas, petrochemical, mineral, and power plant industries. 

The founding members of Neda include Mohammad Nakhaeinejad (US-educated) and Farid Dadgar (US-based). Nakhaeinejad is also the founder of Momtazan Kerman which is involved in everything from cement production to pistachio processing.  Other individuals among Neda’s executives include Hamid Edjbari, Jalal Kavandi, and Farzad Sarlati. 

This network also includes companies like Neday-e Kerman Software, which develops computer software and provides software services in industrial, educational, and research fields, Petro Farayand Tajhiz Neda Engineering and Equipment Co, which is involved in “commercial operations” and “procuring and supplying necessary equipment and parts for industries,” and Khorshid Sharq Renewable Energy, which was a renewable energy company dissolved in 2023. 

Another company associated with Neda Group i Neday-e Micron Electronic which was established in November 2001 for the “Design of integrated electronic circuits and the purchase and sale of engineering components and tools.” Jalal Kavandi was one of its founding members (see above) . The company changed its name to Namad Mobadelat Emrooz in 2007. The company’s scope of activities has been amended to include “Export, import, purchase and sale of medical, rehabilitation, and therapeutic equipment…,design and implementation of electronic circuits and communication and electronic connections; telecommunication and electronics laboratories; industrial automation and CNC machines; design and execution of all power and power plant projects and network projects.”

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The reimposition of Iran sanctions by the US does not enable EU companies to terminate contracts with Iranian businesses, a 2020 ruling suggests.

In the case Payesh Gostaran Pishro Ltd. v. Pipe Survey International C.V., the dispute revolved around a contract between the Iranian company Payesh Gostaran Pishro (PGP) and the Dutch company Pipe Survey International for pipeline inspection services in Iran. The contract was signed in 2017, but following the reinstatement of U.S. secondary sanctions against Iran in May 2018, Pipe Survey suspended its contractual obligations, citing force majeure due to the risk of sanctions.

The Court of Rotterdam ruled on 1 April 2020 that Pipe Survey could not claim force majeure solely due to the imposition of U.S. sanctions. The court reasoned that under the EU Blocking Statute, which prevents European companies from complying with extraterritorial U.S. sanctions, U.S. secondary sanctions did not legally prevent Pipe Survey from performing its contractual obligations. Therefore, the court found that the business risks associated with U.S. sanctions were not sufficient to excuse the company from fulfilling the contract.

Overview of Payesh Gostaran Pishro

Payesh Gostaran Pishro Ltd was founded on March 15, 2011, by Hamidreza Askari Jonoush, Mehrshad Zebardast, Alireza Soufizadeh, and Ehsan Hedayatnia with an initial capital of 100,000 toman. The company’s website features photos and brief resumes of each founder.

The initial articles of incorporation focused on technical inspection, supervision, and execution of civil engineering projects, including roads, buildings, and landscaping. The company also engaged in urban furniture installation, traffic equipment projects, and beautification initiatives. Additionally, it was involved in the procurement, sale, import, and export of goods and represented domestic and foreign companies.

In October 2023, PGP expanded its scope of activities to include comprehensive technical inspections across industries like oil, gas, petrochemical, automotive, and construction, according to the Rooznameh Rasmi business gazette. The company also provides training, personnel services, and inspections for imported and exported goods, as well as risk-based and safety inspections. Additionally, it engages in advanced inspection techniques, asset management, and offshore industry projects, aiming to cover a wide range of industrial and technical needs.

The company appears to have gone under the radar of Iranian media, although it lists major Oil & Gas firms like PGPIC (sanctioned), National Iranian Oil Engineering and Construction Company (a subsidiary of the state oil company NIOC), Pars Oil and Gas Co., and various other NIOC subsidiaries among its clients on its website. The English version of its website lists Ghadir Investment, a conglomerate linked to the Armed Forces, among its clients.

There is no mention of a case against a Dutch company, Pipe Survey, being sued by an Iranian firm, PGP, over breach of contract in any Iranian sources. 

In Iran, an active company with high-profile clients would typically feature regularly in business news stories. 

The company website lists its foreign branches as Canada, Brazil, Argentina,  the UK, France, Romania, the Netherlands, Turkey, Ukraine, Georgia, Armenia, Russia, China, India, the UAE, South Korea, Malaysia and Kazakhstan. It also says any of these branches can be contacted via a single, generic email address.
The company has a video on Aparat that consists only of stock photos.

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An Italian bank was penalized for processing transactions linked to an Iranian government-controlled entity, exposing compliance lapses with U.S. sanctions.

The U.S. Office of Foreign Assets Control (OFAC) announced on June 28, 2013, that Intesa Sanpaolo S.p.A. (“Intesa”) had agreed to a $2,949,030 settlement for apparent violations of U.S. sanctions, including significant breaches tied to Iran. The violations primarily involved financial transactions processed on behalf of Irasco S.r.l., an Italian company identified as being controlled by the Government of Iran (GOI).

Since the late 1990s, Intesa maintained a relationship with Irasco, but failed to recognize that the company was effectively acting on behalf of the Iranian government. Despite clear ties to Iranian state-owned financial institutions and export projects, Intesa processed 31 transactions for Irasco, totaling over $3.14 million, between 2004 and 2006. These payments were terminated in the United States, violating the Iranian Transactions Regulations (ITR). OFAC noted that under U.S. law, even indirect financial benefits directed toward Iran are deemed to be exports of services to Iran, which are prohibited.

OFAC determined that Intesa did not voluntarily self-disclose these violations and acknowledged that the bank’s lack of proper due diligence allowed transactions benefiting Iran to pass through the U.S. financial system. The enforcement action highlights the consequences of not identifying and mitigating exposure to entities affiliated with sanctioned nations, especially when it involves indirect transactions that could provide financial benefits to such countries.

Beyond the Iran-linked transactions, Intesa also processed payments involving Cuba and Sudan, which contributed to the total base penalty of $9.36 million. However, the final settlement amount reflected mitigating factors, including Intesa’s cooperation with OFAC and improvements to its compliance programs. OFAC also noted that the violations were classified as non-egregious, acknowledging that Intesa had taken steps to strengthen its compliance protocols after the incidents came to light.

The case serves as a warning to international banks about the complexities of U.S. sanctions laws, particularly regarding indirect exposure to sanctioned entities. Intesa’s failure to recognize Irasco’s ties to the Iranian government led to significant penalties and underscored the need for stringent compliance systems to identify high-risk customers and transactions.

IRASCO Overview

IRASCO S.r.l. is an Italian company based in Genova and established in 1994. According to its LinkedIn page, 51% of its shares are owned by  ASCOTEC HOLDING GMBH (fka AHWAZ STEEL Commercial & Technical Service) and 49% by the Iran International Engineering Company (IRITEC).

ASCOTEC is owned by the Iranian Mines & Mining Industries Development & Renovation Organization (IMIDRO). ASCOTEC has several subsidiaries in Germany.

IRITEC was founded in 1975 as a joint venture between the Italian company Italiampianti and the Iranian State. IRITEC was instrumental in constructing Mobarakeh Steel Co, one of Iran’s most lucrative industrial complexes, which is partially owned by the  IRGC Cooperative Foundation (BTS). IRITEC has a subsidiary in Germany called IRIKA Engineering and Commercial Services GmbH and several other companies registered in Spain.IRASCO’s LinkedIn  account indicates the company’s main activities include “the supply of industrial plants, machinery, spare parts, provision of services, transfer technology and know-how, projects development to Iran, mainly in the field of steel and metallurgy related industries, oil and gas, mine and mining industries” and offers “execution of turn key projects, procurement of equipment, spare parts and consumable materials, supply of technical assistance, trading of steel products, mine and mining industries products, projects financing and personnel training.”

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The European Commission voted to remove from its sanctions list the German-based cloud storage provider Softqloud, as well as its Iranian sister company Arvan Cloud, in April 2024. German journalists and international activists previously submitted documentation alleging the companies’ links to the Iranian government and their role in domestic Internet censorship. Arvan Cloud remains the object of the U.S. Treasury’s sanctions for “their roles in facilitating the Iranian regime’s censorship of the Internet in Iran.”

The council decision, dated 4 April 2024 and available here, did not elaborate on its reasoning behind the delisting. In response to a public request for justification submitted by journalists, officials said the decision was “based on the deliberations and assessment in the relevant Council bodies, which are confidential.”

Arvan Cloud has reportedly played a critical role in advancing Iran’s National Internet Network (NIN), which aims to isolate the Iranian population from the global internet and tighten state control over digital communications. Documents published last year by the watchdog group Justice Beyond Borders indicate that the company provided essential infrastructure, such as cloud and Content Delivery Network (CDN) services, which are vital components of NIN. By supporting government agencies, including hosting websites for state offices, and signing a 2021 Memorandum of Understanding (MoU) to enhance NIN infrastructure in five provinces, Arvan Cloud directly and indirectly contributed to Iran’s ability to execute internet shutdowns. These shutdowns, particularly during protests like those in 2019 and 2022-2023, curtailed the public’s access to information, enabling state suppression and human rights violations, including torture, enforced disappearances, and extrajudicial killings.

The report emphasizes Arvan Cloud’s complicity in Iran’s censorship and surveillance activities, highlighting how its executives were fully aware of the company’s role in furthering the state’s agenda. The MoU explicitly required the company to comply with directives for lawful interception and internet restrictions, enabling state security forces to monitor and suppress dissent. Despite international sanctions and the company’s attempts to downplay its involvement, its integration into the NIN project and alignment with government objectives underscore its central role in facilitating a digital crackdown on freedom of expression and privacy. Justice Beyond Borders concludes that Arvan Cloud’s actions amount to significant human rights violations, advocating for its continued sanctioning by global authorities.
Separately, the German news outlet taz.de published an investigation of Arvan Cloud in 2022 linking the German company Softqloud to Arvancloud and showing Softqloud’s involvement in limiting Internet freedom in Iran. Arvancloud later refuted the allegations.

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