European Union to activate statute to shield firms from U.S. sanctions against Iran

Saul Bowman
May 18, 2018

EU Commission President Jean-Claude Juncker announced that the bloc plans to kickstart a 1996 law that would prohibit European companies from complying with U.S. sanctions on Iran.

As the world seeks to come to grips with President Trump's withdrawal from the JCPOA, it appears that the European Union will play one of its strongest cards by invoking its "Blocking Regulation", which would prohibit European companies from complying with US sanctions against Iran.

The Commission said the EU measure would come into force within two months, unless the European Parliament and EU governments formally rejected it, but that it could also be activated sooner if there was strong political support.

The French president said that "the European Union chose to preserve the nuclear deal and defend EU companies" adding that "our main interest in Iran is not in trade, but in ensuring stability in the region, at the same time, we will not become an ally of Iran against the USA".

European Union officials say they are revamping the blocking statute to encompass Trump's May 8 decision to revive Iran-related sanctions.

The White House said that the Joint Comprehensive Plan of Action (JCPOA) provides Iran with opportunities for creating a nuclear bomb by evading all current restrictions.

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 president decided that he would withdraw the United States from the accord, which he referred to as "flawed", thereby raising the specter of renewed sanctions against companies that do business with Iran.

As the European signatories of the JCPoA, France, Germany and the United Kingdom have repeated their commitment to the deal, and discussed compensatory measures to ensure that USA sanctions do not make the agreement void.

Iranian Foreign Minister and foreign ministers of major world powers stand for a photo after reaching a historic nuclear accord in 2015.

But companies around the world which invested in Iran after sanctions were lifted are now faced with a hard choice as Washington has threatened to punish firms that violate US sanctions by dealing with Tehran.

What was the reaction to Trump's decision?

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