May 20, 2018

EU initiates steps to protect European business in Iran

18 May 2018, 02:49 | Rufus Hill

Europe to exempt its firms from US sanctions on Iran

Total may pull out of Iran South Pars project

European Commission President Jean-Claude Juncker described the meeting of leaders in Sofia as a show of unity among member states, and emphasised that the EU has a responsibility towards both the JCPoA and the European businesses that will be affected in the wake of new USA sanctions.

A decision by European Union leaders to begin the "blocking statute" process, which aims to neutralize the extraterritorial effects of U.S. sanctions in the European Union, has not stopped companies from pulling out of Iran. The goal is to have the measure in force before August 6, 2018, when the first batch of United States sanctions take effect. It also asks European Union member countries to impose sanctions on companies who comply with the USA rules.

In a Friday statement, the Commission also said it "will continue and strengthen the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector and with regard to small and medium-sized companies".

The European Commission is also encouraging member-states to "explore the possibility of one-off bank transfers to the Central Bank of Iran".

A blocking statute is a law enacted in a local jurisdiction that attempts to hinder the application of a law made by a foreign jurisdiction and is widely seen as an attempt to put pressure on Washington not to punish European firms that continue doing business with Iran. According to European sources, this measure may become the EU's first step towards ditching dollar in trade with Iran.

"If we back down step by step, if we acquiesce, if we become a kind of junior partner of the USA then we are lost", moments ago Reuters reported that the European Commission is set to launch tomorrow the process of activating a law that bans European companies from complying with USA sanctions against Iran and does not recognise any court rulings that enforce American penalties.

The EU needs to safeguard Iran's economic benefits as well as its own, in order to keep Tehran in the 2015 global nuclear deal and prevent its collapse. Trump vowed to reinstate the previous sanctions and introduce new restrictions should Tehran carry out its nuclear ambitions. Meanwhile, Washington put forward demands, which can not be implemented.

The EU leaders pledged at the meeting to keep a united front against Trump.

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