US Pressuring German Firms ‘Daily’ Over Iran Sanctions

EghtesadOnline: Washington’s ambassador in Berlin has been pressuring German firms “daily” to comply with American sanctions on Iran, a spokeswoman said on Thursday, even as European governments look to shield their companies from the US ire.

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23 September 2018

Diplomats’ acknowledgement of the squeeze on firms followed envoy Richard Grenell’s claim that he had struck a deal with car giant Volkswagen to implement the punitive measures, which VW declined to confirm when contacted by AFP.

“US Ambassador Grenell has been speaking to CEOs and industry leaders for quite some time, urging them to comply with US sanctions,” embassy spokeswoman, Christina Higgins, told AFP.

“The ambassador has worked daily with the embassy team to do follow-up with individual companies to ensure that CEOs’ commitment is implemented,” Financial Tribune quoted her as saying.

US President Donald Trump has reimposed a trade squeeze after withdrawing from a 2015 agreement that relaxed sanctions in exchange for Iran freezing its nuclear weapons program.

Grenell told Bloomberg News on Thursday that he had reached a detailed agreement with Volkswagen this week for the Wolfsburg-based group to abide by the US sanctions.

Even under full compliance, VW will still be able to do some business in Iran under a “humanitarian exception”, Bloomberg reported.

But a source familiar with the talks said VW and the US government had not yet reached an accord.

A spokesman for the carmaker said it was sticking to its position that it “obeys all national and international laws as well as export regulations”.

“We are also taking into account possible effects related to the reintroduction of US sanctions,” he added.

The auto behemoth had announced in July 2017 that it would begin selling its own cars in Iran for the first time in 17 years.

Battle to Save Iran Deal

Grenell—known for stirring up controversy in his host country with public sallies on business and politics—this month also tweeted to celebrate chemicals heavyweight BASF and reinsurance giant Munich Re saying they would comply with the trade squeeze.

A spokesman for BASF, however, said on Thursday that it “will continue to do business in Iran and obey all legal rules and regulations”.

He added that “around half” of the €80 million ($93.5 million) in revenue BASF earned in Iran last year came from sectors—energy, automobiles and petrochemicals—affected by American sanctions.

The Ludwigshafen-based group’s business with the country represents a tiny fraction of its €64.5 billion in annual turnover.

Munich Re has said it would withdraw from Iran in case of sanctions so as not to jeopardize its much larger US activities.

European governments are battling to find ways for their firms to continue trading with Iran, hoping to keep Tehran from renewing its nuclear program.

Last week, the German government confirmed to AFP that Berlin, Paris and London were considering a scheme that would allow Iran to ship goods to European Union countries and receive others in return—without transferring money through international financial channels vulnerable to US sanctions.

Unusually outspoken for a diplomat, ambassador Grenell irked his German hosts immediately following his arrival in Berlin earlier this year.

On his first day on the job, he tweeted that “German companies doing business in Iran should wind down operations immediately”.

In one of his first interviews, he also pressured German firms to withdraw from business with Iran and said he aimed to “empower” anti-establishment conservatives around Europe—drawing accusations of meddling in his host country’s politics.