The long arm of OFAC US secondary sanctions and English law governed finance agreements
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Allen & Overy has published an article on the UK Court of Appeal's recent decision in Lamesa Investments Ltd v Cynergy Bank Ltd which will be of interest to those involved with sanctions investigations.
The Court of Appeal confirmed that a provision in an English law facility agreement stating that the borrower would not be in default if “sums were not paid in order to comply with any mandatory provision of law” allowed the borrower to avoid making payments where to do so could result in the imposition of U.S. secondary sanctions.
The decision is of particular note for a non-U.S. bank that is party to an English law governed contract that may not specifically include contractual provisions that expressly refer to U.S. sanctions. The judgment clarifies that a reference to a “mandatory provision of law” may include U.S. secondary sanctions.
To read the full article click here.