How Brussels' sanctions could bleed Britain dry

London is at risk of another blow from Brussels. Currently, the UK Supreme Court is hearing a sanctions case involving the Iranian Bank Mellat, which could prove pivotal in the on-going controversy surrounding the many Russian companies and individuals subject to financial restrictions.

Acting at Brussels’ behest and under the Counter Terrorism Act of 2008, the Treasury blacklisted the Iranians for their alleged role in furthering Teheran’s nuclear ambitions. As a direct result, UK financial institutions were prohibited from doing business with the lender. Irked by this development, Bank Mellat challenged the decision both with the Luxembourg-based European Court of Justice (ECJ) and Britain’s Supreme Court – and won. In both cases, judges agreed that there simply wasn’t enough evidence to back up claims that the Bank had actively supported the controversial Iranian nuclear programme. While giving his ruling, Lord Sumption deemed that the Treasury acted in an “irrational” and “disproportionate” way and therefore Bank Mellat was “not in a position to defend itself against the Treasury’s allegations”.