Secondary sanctions are unique in their audacity. Their application in an interdependent global context raises the specter of an uncontrolled burn, with consequences stretching beyond even their broadest scope. Such consequences reshape markets and, at times, create new ones. This chapter uses Iran as a lens through which to examine the relationship between the informal economy and US secondary sanctions and the potential disruption provided by the proliferation of cryptocurrencies. The chapter ultimately concludes that despite much-heralded potential, cryptocurrency’s disruption to the US financial system’s supremacy, as well as the sanctions regimes reliant on such supremacy, remains, for now, limited. This incomplete disruption means that any blunting effect provided by cryptocurrency on secondary sanctions cannot fully protect the informal economies and the participants therein from the effects of such sanctions, particularly in more protracted sanctions regimes. Indeed, cryptocurrency’s likeliest role in US sanctions is not to upend the secondary sanctions regime but rather to complicate the enforcement process. Given its rapid proliferation and built-in cryptography, cryptocurrency is likely to continue to make enforcement of sanctions more difficult, more expensive, and, perhaps, less appealing to pursue all potential evaders.

The chapter assesses whether the enforcement of extraterritorial sanctions through asset freezes is consistent with customary and treaty rules of international monetary law. After defining key concepts and describing the main characteristics of asset freezes, a definition of such measures through the lenses of international monetary law is provided. The research then moves, first, to discuss whether the imposition of asset freezes to enforce extraterritorial sanctions regimes can be deemed an exercise of internal or external monetary sovereignty and, second, whether unilateral (extraterritorial) sanctions can be considered to amount to exchange restrictions legitimately introduced for security reasons for the purposes of the Articles of Agreement of the International Monetary Fund (IMF). The chapter concludes with a critical assessment of the IMF legal regime on unilateral (extraterritorial) sanctions.

This chapter explores the action for damages as a remedy for fundamental rights violations committed by the EU. Especially considering the shortcomings of the other direct avenues to the CJEU, this mechanism is essential to ensure full compliance with the right to an effective remedy within the EU legal order. Its potential lies in its accessibility to individuals as well as its substantive flexibility that leaves significant room for the CJEU to craft a liability regime suitable to the EU. Yet the action for damages is currently not very effective as a fundamental rights remedy. This is largely due to two factors: the Court’s insistence on the sufficiently serious breach test and the limits to the establishment and enforcement of joint liability. To ensure full compliance with the right to an effective remedy, the CJEU may rely on Article 47 of the Charter and the approaches adopted in national liability laws to develop a fundamental rights specific regime for damages liability. Alternatively, a fundamental rights specific liability regime may also be achieved through secondary legislation.

The World Trade Organization (WTO) regime has a significant role to play in disciplining secondary sanctions. It provides substantial standards and procedures that differ from and supplement applicable standards and potential remedies under general public international law. The WTO system may address the specifics of secondary sanctions in different ways. In this chapter three perspectives are discussed in this regard. First, it is observed that non-discrimination standards in trade law may capture what appears to be unfair about secondary sanctions, as such standards would fail to detect discrimination, where all WTO Members – target Members and third Members – would be sanctioned alike. Second, however, WTO exception clauses can take into consideration that secondary sanctions are significantly more distant in terms of a connection between the measure and a legitimate policy objective as required under standards of good faith. Third and relating to fairness, WTO dispute settlement would open an opportunity for affected Members to seek a rebalancing of rights and obligations even in cases where a measure would be considered to conform to WTO rules.

In the last ten years, secondary sanctions have played an important role for European regulators as well as for compliance officers working for economic operators. Even though such European practitioners are looking for guidance and experience from their interlocutors from the other side of the Atlantic, including from the US Office of Foreign Assets Control, secondary sanctions do not act in the leading role but are one of many risk factors to be considered by economic operators. Instead, prohibitive policies of European economic operators, including financial institutions, against certain governments, such as Iran and to a lesser degree Russia, are mostly based on risks unrelated to secondary sanctions. On this premise, the chapter will briefly describe the relevant regulatory framework and will then explain how the regulations are operationally implemented in international financial institutions. In doing this, the chapter will also touch on practical challenges for sanctions compliance officers, such as extraterritoriality and the EU Blocking Regulation.

The introduction offers a historical overview of terrorism through the ages and describes the development of international counterterrorism law. It discusses the interplay between terrorism and international crimes such as genocide and crimes against humanity. It also introduces some of the controversy surrounding terrorism as a term.

The contribution offers a critical appraisal of the individual’s (in)access to justice when his or her fundamental rights have been violated during direct enforcement action by EU law enforcement authorities. Based on three case studies – ESMA, DG COMPETITION, OLAF – we argue that direct enforcement, and the shared activities and joint decisions of EU and national authorities it entails, have been ‘squeezed’ into the existing system of separated controls between the EU and the Member State legal orders. This brings with it challenges regarding the control over public power which may affect ‘access to’ and ‘justice’. The main argument of our contribution then is that in the current EU-constellation, courts are – contrary to what is generally assumed – not always, or in any case not necessarily, best-suited for remedying fundamental rights violations and providing the protection the individual needs. Therefore, the co-existing judicial and non-judicial remedies can address each other’s gaps and ultimately ensure a fully-fledged protection of fundamental rights if designed properly and aligned with each other and with national law.

The architecture of international counterterrorism law is the subject of Chapter 2. It is a branch of public international law that has emerged from an evolving special legal regime to regulate action to prevent and punish terrorism and to tackle terrorists. International counterterrorism law is a matrix of global terrorism treaties and dedicated United Nations Security Council resolutions that require the incorporation of offences into domestic law combined with the salient rules of international humanitarian law and the law of law enforcement. These rules, which regulate when and against whom force may be used in counterterrorism, are supplemented by (though are sometimes inconsistent with) the content of regional treaties and domestic legislation. The standards and laws are subject to the constraints and oversight of international human rights law. The chapter also describes the content and adherence of regional counterterrorism treaties.

This chapter starts from the premise that secondary sanctions are invariably adopted to exert pressure upon foreign economic or financial actors operating in third states, with the intention to modify their conduct in alignment with the primary sanctions already imposed by the sanctioning state against the target state. As follows, due to their extraterritorial scope and their exceptional capacity to encroach upon the sovereignty of other countries, the legal status of secondary sanctions under international law is controversial. This contribution seeks to elucidate if secondary sanctions may amount to economic coercion and whether as a result these measures could constitute a breach to the principle of non-intervention. The chapter closes by exploring the potential avenues for regime interaction between the rules governing the exercise of jurisdiction by states and the principle of non-intervention in the context of secondary sanctions.

This chapter illustrates how soft law can have very real implications for the fundamental rights position of individuals. While the existence of an interference is often treated implicitly in the case law of the ECtHR and the CJEU, the chapter argues that interferences can result from soft law acts. For the EU this means that recourse to soft law does not in itself preclude the application of the Charter. How soft law may concretely interfere with fundamental rights is illustrated with a couple of examples from different policy areas. Having shown the possible fundamental rights implications of soft law, the chapter turns to remedies. Here the limitations of the EU’s system of judicial remedies is highlighted and the potential of non-judicial remedies is explored.

This chapter delves into the question of the impact of extraterritorial and secondary sanctions on private contractual relations. It opens with a discussion of the characterisation of extraterritorial and secondary sanctions as potential legal or factual impediments to the performance of contractual obligations. A detailed analysis of the case law follows, bringing to the fore some degree of reluctance on the part of judicial authorities to allow operators to suspend the performance of their contractual obligations or to terminate contractual relations on account of their exposure to extraterritorial or secondary sanctions, at least in the absence of sanctions or force majeure contractual clauses. The chapter also explores the potential tension between such sanctions, on the one hand, and measures – commonly referred to as blocking statutes – enacted by states or by the EU to thwart their effects, on the other hand. A discussion, in this respect, of the relevant case law reveals a quest for a balance between policy objectives and economic soundness and shows the existence of incongruent views on the compatibility of sanctions clauses with blocking statutes.

In 2019, the United States indicted Turkiye Halk Bankasi (Halkbank), a Turkish state-owned bank, alleging a multiyear scheme to evade US sanctions against Iran by using fraudulent transactions to transfer the proceeds of oil and gas sales to Iran. This chapter evaluates the charges against Halkbank under both US domestic law and customary international law. After briefly reviewing the charges against Halkbank and the US district court’s analysis of the extraterritoriality questions, the chapter considers the application of the US presumption against extraterritoriality, concluding that all the charges except for the bank fraud charges survive this analysis. The conclusion with respect to customary international law, however, is quite different. Under customary international law, the United States lacks jurisdiction to prescribe when its only connection to the foreign defendant is the clearing of transactions through banks in the United States. Because the International Emergency Economic Powers Act authorizes sanctions on financial transactions only when the person or property is subject to the jurisdiction of the United States, the sanctions regulations cannot lawfully be applied to Halkbank.

Sanctions are intrinsically complex. Implementation of sanctions regulations often entails navigating an extremely dynamic environment consisting of numerous restrictions and prohibitions, difficulties in interpretation, inconsistent measures adopted by imposing jurisdictions and countermeasures. This has been evident following the sanctions against Russia, often described as unprecedented in scale. The more frequent resort to sanctions further means that an increasing number of international contractual relationships are affected. Financial institutions operating globally are particularly impacted. This is exacerbated by the use of secondary sanctions which remain a controversial foreign policy tool and even subject to countermeasures, for example, blocking statutes. Consequently, financial institutions and other economic operators with an international presence, torn between two conflicting regimes, face an unsolvable legal dilemma. This uncertainty extends to the termination of contracts involving persons or activities subject to secondary sanctions. Although in most cases international (financial) contracts contain sanctions clauses (often under force majeure provisions), it remains unclear whether these can be relied on, especially where the institution’s own jurisdiction opposes secondary sanctions. This chapter presents in more detail what are the practical challenges in sanctions implementation. It focuses on financial institutions and provide recommendations on how such challenges could be addressed.

In contemporary European law, it has become increasingly evident that EU law is not implemented according to the traditional distinction between direct and indirect administration, but through various forms of cooperation between national and EU authorities, as well as between national authorities themselves. These cooperative mechanisms generate so-called ‘composite procedures’, that is, administrative decision-making processes which involve administrative authorities belonging to more than one legal system for the implementation of EU law. This phenomenon has generated increasing scholar attention with attempts at offering taxonomies, labels, analyses of composite procedures in different EU policy fields, or insights regarding the question of access to justice. This chapter studies a less explored angle in this debate: the question of the remedies available to redress possible fundamental rights violations occurring in the context of the composite procedures. It first provides a categorisation of composite procedures, together with an examination of possible fundamental rights violations. The chapter then outlines the available remedies in selected scenarios, identifying possible gaps. The chapter will show that, while composite procedures are capable of violating both substantive and procedural EU fundamental rights, the current system of remedies seems to be ill-suited to provide effective remedies in multi-jurisdictional decision-making processes.

Non-US corporations, especially banks, have long experienced the expansive enforcement of unilateral US sanctions regulations. The common factor in these cases is that jurisdiction is based on the alleged use of the US financial system. A recent case shows that the US authorities have expanded their jurisdictional claim even further by establishing a new theory of sanctions liability. Under what we call the correlation theory, a sufficient US nexus exists if a sanctions-related transaction correlates with a transaction which, at some point, is processed via the United States. This expansion signifies an enlargement of what the United States considers as primary sanctions. It goes hand in hand with a reduction of what it considers to be secondary sanctions. So far, the US authorities have not provided a clear and comprehensive definition of their newly developed liability framework. Less nebulous than the parameters of the correlation theory is the outcome it produces: any transaction involving a sanctioned client by an internationally active bank can potentially be pulled into US sanctions jurisdiction.