EU 'Deeply' Regrets Return of US Sanctions on Iran

The EU said Monday it deeply regretted the US reimposition of sanctions on Iran after President Donald Trump pulled out of the 2015 nuclear pact, and vowed immediate steps to protect European companies.

The statement by EU diplomatic chief Federica Mogherini and the foreign ministers of Britain, France and Germany said it would also work to keep "effective financial channels" open with Iran.

"We deeply regret the re-imposition of sanctions by the US, due to the latter's withdrawal from the Joint Comprehensive Plan of Action (JCPOA)," the statement issued in Brussels said.

The EU said it would now swiftly bring in legal cover for firms in the 28-nation bloc to work with Iran, after the Trump administration rejected European calls for an exemption. 

"We are determined to protect European economic operators engaged in legitimate business with Iran," the statement added.

"This is why the European Union's updated Blocking Statute enters into force on 7 August to protect EU companies doing legitimate business with Iran from the impact of US extra-territorial sanctions."

The "blocking statute" forbids EU firms from complying with US sanctions, allowing them to recover damages from such penalties and nullifying any foreign court rulings against them.

French carmaker Renault, which does not sell cars in the US, has said it will remain in Iran despite the sanctions. But French oil group Total and carmaker PSA have already indicated they are likely to pull out of Iran. 

Despite the US move to restore the sanctions, which Secretary of State Mike Pompeo reaffirmed in Alaska late Sunday, the Europeans said they would continue to work with Iran to preserve the deal.

"The remaining parties to the JCPOA have committed to work on, inter alia, the preservation and maintenance of effective financial channels with Iran, and the continuation of Iran's export of oil and gas," it said.

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EU Moves to Shield EU Firms From US Sanctions Against Iran

The EU launched formal steps Friday aimed at sparing European firms fallout from US sanctions on Iran as part of efforts to preserve the nuclear deal with Tehran.

The move to invoke the "blocking statute" had received the all-clear at a meeting of European Union leaders in Sofia on Thursday as the transatlantic rift deepened.

The European Commission, the EU executive, said Friday it "launched the formal process to activate the blocking statute by updating the list of US sanctions on Iran falling within its scope."

US President Donald Trump last week controversially pulled Washington out of the 2015 international deal with Iran that placed limits on its nuclear program in return for easing economic sanctions.

The "blocking statute," which EU member states and the European Parliament must still endorse, is aimed at easing the fears of European companies that invested in Iran after the deal.

"The blocking statute forbids EU companies from complying with the extraterritorial effects of US sanctions, allows companies to recover damages arising from such sanctions from the person causing them, and nullifies the effect in the EU of any foreign court judgements based on them," the commission said.

The commission said it hopes to have the measure in force before August 6 when the first batch of US sanctions take effect.

The commission also launched "the formal process to remove obstacles for the European Investment Bank (EIB) to decide under the EU budget guarantee to finance activities outside the European Union, in Iran," the executive said.

"This will allow the EIB to support EU investment in Iran," it added, noting the measure could help small and medium-sized companies.

The "blocking statute" is a 1996 regulation originally created to get around Washington's trade embargo on Cuba, which prohibits EU companies and courts from complying with specific foreign sanction laws, and says no foreign court judgments based on these laws have any effect in the European Union.

However, the Cuba row was settled politically, so the blocking regulation's effectiveness was never put to the test, and its value may lie more in becoming a bargaining chip with Washington.

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EU to Launch Moves to Block US Sanctions on Iran Friday: Juncker

The EU will on Friday begin moves to block the effect of US sanctions on Iran in the bloc, European Commission chief Jean-Claude Juncker said, as part of efforts to preserve the nuclear deal with Tehran.

"We will begin the 'blocking statute' process, which aims to neutralize the extraterritorial effects of US sanctions in the EU. We must do it and we will do it tomorrow morning at 10:30," Juncker said at a summit in Sofia on Thursday.

The European Union is trying to find ways to keep Iran in the 2015 accord by safeguarding the economic benefits Tehran gained in return for giving up its nuclear program, after US President Donald Trump abruptly pulled out of the deal.

The "blocking statute" is a 1996 regulation originally created to get around Washington's trade embargo on Cuba. 

It prohibits EU companies and courts from complying with specific foreign sanctions laws and says no foreign court judgments based on these laws have any effect in the EU.

But the row with the United States over the Cuba embargo was settled politically, so the effectiveness of the blocking regulation has never been put to the test.

Its value may lie more as a bargaining chip with Washington than its legal effectiveness, and last week an EU source acknowledged that the "political symbolic effect is potentially bigger than the economic effect."

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France Urges Europe to Act on 'Unacceptable' US Iran Sanctions

France's economy minister Bruno Le Maire urged European nations Friday to defend themselves against US sanctions targeting foreign companies that trade with Iran, as the rift between Washington and its allies deepens.

Le Maire said the European Union had to defend its "economic sovereignty" when it comes to the right to trade with Iran.

Foreign Minister Jean-Yves Le Drian has meanwhile branded the sanctions "unacceptable", in some of the most forceful criticism yet from a key European ally.

US President Donald Trump announced on Tuesday that he was pulling out of the landmark 2015 deal curbing Iran's nuclear program, reintroducing sanctions on the Islamic republic and those who trade with it.

The decision overturned years of painstaking diplomacy and left EU allies scrambling to save the hard-fought deal, as well as to protect the interests of their companies which do business with Iran.

"We have to work among ourselves in Europe to defend our economic sovereignty," Le Maire told Europe 1 radio ahead of talks with Dutch Finance Minister Wopke Hoekstra.

Le Maire said the EU would hold "collective discussions with the United States to obtain... different rules" covering European companies that do business with Iran. 

"At the end of May I will meet with the British and German finance ministers and the three of us will look at what we can do."

Le Maire said he had called US Treasury Secretary Steve Mnuchin on Wednesday urging him to allow exceptions for French companies or a delay in implementing the sanctions, while admitting he has "few illusions" about the likely response.

Washington has given European firms doing business in Iran up to six months to wind up investments or risk US sanctions, and they are also forbidden from signing any new contracts with the country.

Return of Sanctions 'Blocking'?

Le Maire pointed to the possibility of reinstating of EU "blocking regulations", dating back to 1996, which were used as a countermeasure against US sanctions that targeted third countries doing business with Cuba.

The system, which was never actually used, permitted European companies to ignore the US sanctions and said that any decisions by foreign courts based on the sanctions would not be upheld in Europe.

"We want to reinforce this regulation and incorporate the recent decisions
taken by the United States," Le Maire said. 

 "The second avenue is looking at Europe's financial independence—what can we do to give Europe more financial tools allowing it to be independent from the United States?"

Le Maire further noted that the US Treasury has an agency, the Office of Foreign Assets Control, which tracks whether or not foreign companies are respecting its sanctions.

"Why don't we create the same type of agency in Europe, capable of following the activities of foreign companies and checking if they are respecting European decisions?" he said. 

Le Drian had on Thursday insisted Washington needed to negotiate with its European allies on any sanctions that might affect their companies.

"We feel that the extraterritoriality of their sanction measures is unacceptable," he told Le Parisien newspaper, vowing that European countries would "do everything to protect the interests of their companies".

"The Europeans should not have to pay for the withdrawal of an agreement by the United States, to which they had themselves contributed."

Photo Credit: IRNA