IMEI blacklist is a list of IMEI numbers which were reported to operator as stolen or lost. Operatorshas access to EIR (Equipment Identity Register) and if your phone is listed in this registry you can not use you mobile anymore in this operators network.
One of the lists can be found on stolen phones, lost phones database.
How could you know that the phone is blacklisted?
When you insert SIM and turn ON the phone you see message like
SIM card registration failed or
or if nothing from above messages, then you will not be able to make an outgoing phone call. You will hear some beeps and then call will be dropped.