EU to Protect Firms in Iran Following US Refusal to Grant Waivers

EghtesadOnline: EU countries on Monday gave European firms legal cover to operate in Iran despite the US pullout from the nuclear deal, after a report that the US administration has rejected calls by Brussels for an exemption from sanctions.

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18 July 2018

The bloc’s foreign policy chief, Federica Mogherini, said the 28 countries were doing all they could to save the deal but conceded US President Donald Trump’s administration could still wreck it, AFP reported.

Trump withdrew from the Iran nuclear deal in May and Washington now plans to reimpose sanctions on Tehran next month.

“Today, the (European) council has endorsed the update of the blocking statute annex on the nuclear deal with Iran,” Mogherini told reporters in Brussels at a meeting with EU foreign ministers, according to Financial Tribune.

She said the European Parliament gave its consent to the statute two weeks ago.

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.

The EU vowed to fight to preserve the Iran nuclear deal after the US withdrawal, one of the many points of US-European contention.

The blocking statute is due to come into force on August 6, when the first set of US sanctions are due. The second set rolls on November 4, just before the US legislative elections. The move came as the Financial Times reported that the Trump administration has rejected an EU call for an exemption from US sanctions on companies operating in Iran.

Mogherini conceded it will be tough battle to preserve the Iran nuclear agreement that Trump’s predecessor, Barack Obama, sealed with Iran along with Britain, France and Germany as well as Russia and China.

“It is a difficult exercise, because the weight of the US in the global economy and the financial system is obviously relevant,” the former Italian foreign minister said.

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.

Mogherini said the EU and other parties were “determined to preserve this deal”, which she called vital to European, Middle Eastern and global security.

“We will continue to do all we can to try and prevent this deal from being dismantled because we believe the consequences of this would be catastrophic for all.”

However, Mogherini noted that she was not sure the “efforts are going to be enough.”