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.

The growing range and changing nature of unilateral sanctions have seen the emergence of a new label of so-called ‘secondary’ sanctions, as opposed to the more traditional ‘primary’ sanctions. While there is no accepted legal definition of secondary sanctions, in essence, secondary sanctions restrict economic transactions between third countries which may be entirely lawful under the law of these countries. Their extraterritorial character gives secondary sanctions their distinctive and particularly controversial character. Secondary sanctions create inter-State tension and may possibly violate a number of public international law regimes. They may harm the politico-economic interests of third States and cause headaches for private economic operators, whose potential exposure to secondary sanctions complicates the already complex web of multi-jurisdictional norms governing their international business transactions.

This chapter analyses a large dataset of domestic court decisions relevant to customary international law (CIL). It finds that domestic courts at times engage in CIL interpretation rather than mere ascertainment, even if they largely refrain from using that term. Domestic courts may interpret CIL autonomously, may defer to and validate international courts’ CIL interpretations, or interpret written documents, such as treaties, codifying CIL norms. Such practices bear out that domestic courts may consider some core CIL norms to be relatively stable and amenable to further refinement through interpretation. When interpreting CIL, domestic courts appear to resort mainly to systemic interpretation and interpretation on the basis of subsequent State practice. This reflects earlier findings by Panos Merkouris with respect to CIL interpretation by international courts. Domestic courts deciding cases on the basis of CIL may want to be more explicit regarding whether they engage in de novo CIL norm-identification or rather in the interpretation of pre-existing and stabilised customary norms. In case of interpretation, they may want to improve the methodological quality of their reasoning by pinpointing the canon of construction which they apply, and by relying on sufficient international (including foreign) legal practice.

Discussants Professor Cedric Ryngaert, Dr Claus Zimmermann, and Professor Krista Nadakavukaren Schefer were asked to address at the workshop held on 22–23 June 2018 at the World Trade Institute, Bern, Switzerland, the implications of the notion, concept, and potentially emerging principle of Common Concern of Humankind on territoriality and extraterritorial effects and the critical issue of compliance and unilateral enforcement. Their authorized interventions are transcribed below. The comments place the doctrine in the context of current research on extraterritorial effects and efforts to balance interests at stake and define the scope of unilateral measures in international law. They discuss the implications of Common Concern of Humankind on sovereignty of states and how the doctrine supports the idea of cooperative or shared sovereignty. They discuss jurisdiction in the context of multilevel governance and the ‘five-storey house’ and show that extraterritorial effects are necessarily inherent. Finally, they address the duty to act and support the idea that this amounts to the most important aspect of an emerging principle of Common Concern of Humankind. The comments are encouraging and by and large support the findings of the chapters in this volume.