EU protects firms with business ties to Iran from US sanctions

EU protects European firms with business ties to Iran from US sanctions
Iranian foreign minister Mohammad Javad Zarif © Reinis Inkēns, Saeimas Administrācija

The EU has taken steps to protect European firms with business ties to Iran from US sanctions, following the latter country’s withdrawal from the Iran nuclear deal.

The US announced its withdrawal from the deal last night, and also said it plans to reintroduce harsh economic sanctions on Iran over the next six months. Further, US president Donald Trump warned that the imposition of sanctions could extend to countries or companies, including European firms with business ties to Iran.

The EU also intends to protect Iranian businesses from the US’ economic sanctions in a bid to keep the Joint Comprehensive Plan of Action in place (JCPoA). The exit of the US from the deal could strongly impact exports from Iran’s oil industry without intervention on the part of the agreement’s European signatories.

What steps is Europe taking?

European officials will meet Iranian foreign minister Mohammad Javad Zarif, who was instrumental in the negotiating and signing of the JCPoA deal in 2015, to discuss Europe’s desire to remain in the agreement.

The Guardian reports that French President Emmanuel Macron will speak to Iranian President Hassan Rouhani on the phone this afternoon (9 May) to discuss the matter further. European leaders have rallied behind the JCPoA following the US announcement, which could lead to retaliation and additional sanctions from the world’s largest economy.

The UK has issued revised recommendations for European firms with business ties to Iran, warning them to consult the US’ plans for the sanctions before making investments.

What are the next steps?

A meeting between Iranian officials and leaders from France, Germany and the UK – the three European signatories to the deal – is due to be held next week, at which the three EU countries are expected to present a package of measures designed to offset the US’ sanctions, and reassure Iran that the JCPoA is still viable.

Some high-profile business leaders have already urged the EU to pass a blocking statute, which would protect EU businesses from US sanctions, but it is as yet unclear how effective this would be, and could subject European countries to US fines for breaking its anti-Iran sanctions.

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