Saturday

23rd Mar 2019

EU firms in Iran caught between US and Europe

  • Donald Trump unilaterally pulled the US out of the 2015 Iran nuclear deal earlier this year (Photo: kamshots)

European businesses that pull out of Iran because of US sanctions may end up being sued by EU states.

A European Commission spokeswoman on Monday (6 August) told reporters in Brussels that EU firms are banned from following US demands to cut business ties with Iran, unless specifically authorised to do so.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The measure is part of a broader European Commission response, known as the 'blocking statute', that also allows the firms to recover damages arising from US extra-territorial sanctions.

"It also forbids EU persons from complying with those [US] sanctions unless exceptionally authorised to do so by the commission," said spokeswoman Mina Andreeva.

She said such exceptions can be made in cases where "non-compliance seriously damages their interests or the interests of the European Union."

The commission says this is designed to protect EU firms in Iran by allowing them to recover any US damages, including legal costs.

The statute, set to enter into force by 6am Tuesday, is a response to the Trump administration decision in May to unilaterally withdraw from the 2015 Iran nuclear deal.

Trump described it as the "worst deal ever" and has since announced Washington would reimpose sanctions on any companies that operate in Iran.

He says the move is needed to prevent Iranian nuclear ambitions. The decision has been condemned by the EU's foreign policy chief Frederica Mogherini.

"Preserving the nuclear deal with Iran is a matter of respecting international agreements and a matter of international security," she said, in a joint statement on Monday along with the foreign ministers of France, Germany, and the United Kingdom.

The commission says such US sanctions are illegal and refuses to abide by them, noting that it intends to maintain trade and economic relations with Iran as part of the hard-won 2015 deal, signed by the so-called 'P5+1' powers - namely the five permanent members of the UN Security Council (the US, UK, China, France and Russia), plus Germany.

That also means that EU firms won't be able to react to the American threat without facing penalties at home.

The European Commission said it will grant exceptions if the company can prove that it is leaving Iran for reasons not linked to the US threat.

"If the authorisation is rejected, then the company shall not comply with US law and if it does it is subject to the penalties foreseen by each member state," said one EU senior official.

Fines vary from EU state to EU state, and must be "effective, proportionate and dissuasive".

The blocking statute applies to anyone, foreign or otherwise, who is a resident in the European Union and also does business in Iran. This includes companies incorprated in the EU and ships registered in an EU state or fly an EU member state flag.

Analysis

EU has no 'magic bullet' against US Iran sanctions

EU leaders in Sofia will discuss how they can protect the bloc's economic interests against US threats to sanction companies doing business in Iran. But their options are limited.

Interview

EU and US clash on Iran: an ex-spy's view

Halting the Iran deal could plunge its nuclear programme back underground, the CIA believes. It could also create a sanctions clash with EU states, a former US spy has warned.

Lone Merkel declares Saudi arms ban

Germany has announced a unilateral arms ban on Saudi Arabia over its killing of a journalist, but France, the UK, and the US have not followed suit.

News in Brief

  1. EU leaders at summit demand more effort on disinformation
  2. Report: Corbyn to meet May on Monday for Brexit talks
  3. Petition against Brexit attracts 2.4m signatures
  4. Study: Brexit to cost EU citizens up to €40bn annually
  5. NGOs demand France halt Saudi arm sales
  6. Report: Germany against EU net-zero emissions target
  7. Former top EU official takes job at law firm
  8. Draft text of EU summit has Brexit extension until 22 May

EU migrants sneaking into US from Mexico

Almost 1,000 Romanian nationals were caught trying to sneak into the United States in 2017, of which around half attempted to cross via Mexico. Nationals from countries like Hungary and the UK were also intercepted.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  2. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  3. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  4. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  5. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  6. Nordic Council of MinistersNordic commitment to driving global gender equality
  7. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  8. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  9. Nordic Council of MinistersNordic talks on parental leave at the UN
  10. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  11. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  12. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID

Latest News

  1. Italy takes China's new Silk Road to the heart of Europe
  2. What EU leaders agreed on climate - and what they mean
  3. Copyright and (another) new Brexit vote This WEEK
  4. EU avoids Brexit crash, sets new date for 12 April
  5. Campaigning commissioners blur the lines
  6. Slovakia puts squeeze on free press ahead of election
  7. EPP suspends Orban's Fidesz party
  8. Macron is confusing rigidity with strength

Join EUobserver

Support quality EU news

Join us