OUR NEWS

EU moves to protect European firms from US sanctions on Iran

May 9, 2018

 

The European Union has moved to protect the 2015 Iran nuclear agreement by vowing to take steps to immunise European firms doing business with Tehran from any US sanctions.

 

France also said on Wednesday it would do everything possible to protect European businesses, a day after Donald Trump announced the US would exit the Iran deal agreed with other major powers in 2015, and impose the highest level of economic sanctions against Iran.

 

EU foreign ministers will meet their Iranian counterpart, Mohammad Javad Zarif, next week to offer personal reassurances they will take practical steps to protect the deal from sweeping US Treasury sanctions due to come into force over the next 180 days.

 

“The international reach of US sanctions makes the US the economic policeman of the planet, and that is not acceptable,” the French finance minister, Bruno Le Maire, told France Culture radio on Wednesday.

 

The French president, Emmanuel Macron, would also speak with his Iranian counterpart, Hassan Rouhani, by telephone on Wednesday afternoon about “our wish to stay in the agreement”, Jean-Yves Le Drian, the French foreign minister, told RTL radio.

 

“Iran needs to continue its determination to remain in the pact in return for economic benefits that the Europeans will try to preserve,” he added.

 

In a concerted bid to shore up the more moderate voices in Iran, including Rouhani, EU foreign ministers sharply criticised Trump’s decision to pull out of the Iran nuclear deal altogether, saying his decision had made the world less secure.

 

Tehran has complained in recent weeks that the EU had gone too far to appease Trump. But it appears that after the failure of its diplomatic charm offensive with Washington, Europe is going to unite to protect the deal, even if this puts European capitals on an economic collision course with America.

 

In his uncompromising announcement on Tuesday, Trump explicitly warned he would seek to hit European firms that continued to trade with Tehran.


Late on Tuesday night, the UK Foreign Office issued revised recommendations to British firms investing in Iran, urging them to consult the US Treasury sanctions plans, as well as to seek their own legal advice on them.

 

Key European business leaders have already urged the EU to pass a statute designed to block US sanctions, but many EU firms with links to the US are deeply wary of continuing with any investment in Tehran given the US Treasury’s past ability to impose swingeing fines on any firm that breach anti-Iran sanctions. The interconnectedness of modern multinationals, and the dominance of dollar trading, makes it hard for firms to avoid the reach of the US Treasury.

 

The promise of an EU-Iran meeting next week will give the three European signatories to the Iran deal – France, Germany and the UK – time to assemble a credible package that can reassure Tehran that business will continue.

 

Iran has always said it signed the nuclear deal in 2015 on the basis that the consequent lifting of sanctions would lead to increased western investment.

Le Drian insisted: “The deal is not dead. There is an American withdrawal from the deal but the deal is still there.”

 

The UK foreign secretary, Boris Johnson, is due to brief MPs on the US exit on Wednesday, but the Middle East minister, Alistair Burt, admitted it was self-evident that Trump had not listened to Europe on the Iran deal.

 

“On this issue he has not listened, that is absolutely correct. But now we have got to seek to persuade him and others there other ways of tackling the challenges he has set out,” Burt told BBC Radio 4’s Today programme.

 

“We won’t be seeking to make him go back on something. He won’t do that. But there are other ways forward and it is our job to make sure those other ways work, and work in a non-confrontational fashion, no matter how difficult that is in a tricky region.”

 

Burt said the UK would continue to pursue plans to persuade Iran to reach an agreement to curtail its ballistic missile programme and interventions in Syria, Yemen and Iraq.

 

The three EU countries with the deepest exposure to Iran are France, Germany and Italy, but the UK has also been trying to build its business links to a country with 80 million, mainly young, customers.

 

The value of trade between the EU and Iran has soared from $9.2bn in 2015 to $16.4bn in 2016 after the deal was signed. In 2017, trade reached $25bn.

 

Patrick Pouyanné, the chief executive of the French energy firm Total, has already called for the EU to pass a blocking statute, similar to that passed in the 1990s to protect EU firms from US sanctions. Total is working on the $3.8bn South Pars project, in the world’s largest gas field.

 

In Germany, where trade with Iran has risen by 42 percent since 2015 to 3.4 billion euros a year, Dieter Kempf, president of the Federation of German Industries (BDI), said the country was not prepared to give up on Iran as a market. “Our firms have invested a lot of hope in the market openings that resulted from the lifting of the economic sanctions,” he said. “Now these prospects have been considerably dampened.”

 

A spokesperson for the German Chambers of Commerce and Industry (DIHK) added: “Companies are concerned about the fact that by doing business in Iran they risk losing US business. European businesses are under threat of being punished in the real economy if for example their Iranian business partners are listed on the US sanctions list.”

 

In a sign that Iran is not going to act precipitously, the Iranian parliament introduced a motion calling for Iran’s leadership to seek the necessary guarantees that the deal remains worthwhile.

 

Immediately after Trump’s statement on Tuesday, Rouhani accused the president of indulging in “psychological warfare”, but insisted the deal could survive.

 

But Iran’s supreme leader, Ayatollah Ali Khamenei, said it was not feasible for Iran to continue implementing the agreement without assurances that Europe could withstand US pressure.

 

“It is not logical to continue the implementation of the Iran deal without receiving enough guarantees from three European countries,” he said.

Ali Larijani, the speaker of the Iranian parliament, mocked Trump, saying he was not fit for his job. “Trump does not have the mental capacity to deal with issues,” he said.

 

The US Treasury is giving itself three to six months to tighten the financial strain on Iran to its maximum. Firms with ties to Iran include Shell, Total, Italy’s Eni, Malaysia’s Petronas and Russia’s Gazprom and Lukoil, as well as companies from China, Austria, Japan and other countries.

Please reload

Recent Posts

Please reload

SUBSCRIBE TO OUR NEWSLETTER

Keep up to date with the latest news and services from Oakmark Global Vision

WEST AFRICA'S NO.1 ECONOMIC AGENTS

REGIONAL OFFICE

INTERNATIONAL OFFICE

CONNECT WITH US

SITE MENU

1 Kandi Close, Off Aminu Kano

Crescent, Wuse 2, Abuja F.C.T

Nigeria 

King Court, 17 School Road
Hall Green Birmingham
United Kingdom  B28, 8JG

+234 -(0)- 929 207 02
+234 (0) 808 643 0422

+44 (0) 121 244 1814
+44 (0) 746 625 2505

© 2019 Oakmark Global Vision Ltd - All Rights Reserved.

UK Company No. 07634879 / Nigeria Company No. RC 1288232

WEST AFRICA'S NO.1 ECONOMIC AGENTS
  • Grey Facebook Icon
  • Grey Twitter Icon
  • Grey Instagram Icon
  • Grey LinkedIn Icon