The European Commission has revealed that it plans to use a series of legal measures that will block US sanctions against European companies that are currently doing business in Iran,
The move came about after the EU heads of states unanimously backed proposals by European Commission President Jean-Claude Juncker and Brussels’ foreign policy chief Federica Mogherini during a summit in the Bulgarian capital of Sofiα to use a “blocking statute” first adopted in 1996, which prohibits EU-based companies from complying with certain US sanctions and provides compensation if they were adversely affected by Washington’s decision to target them.
The European Commission said on May 18 that it had launched the formal process to activate the blocking measures by updating the list of US sanctions on Iran that fall within its scope and said it would use the financial backing of the European Investment Bank to help support ongoing and future EU projects in Iran.
US President Donald J. Trump controversially pulled Washington out of the 2015 international deal with Iran that placed limits on its nuclear programme in return for easing economic sanctions, the first batch of which will come into effect in 2018. The “blocking statute,” which both co-legislators in the European Council and the European Parliament must still endorse, is aimed at easing the fears of European companies that invested in Iran after the deal.
The Commissioner for Climate Action Miguel Arias Cañete is also expected to travel to Iran to assist with more “confidence-building measures”, in the energy sector. Financial assistance through the Development Cooperation or Partnership Instruments will also be mobilised, according to the EU execute.
Brussels will encourage the bloc’s Member States to explore the possibility of one-off bank transfers to the Central Bank of Iran to help the Iranian authorities receive oil-related revenues.
“The EU’s decision to use the Blocking Statue to protect European companies from US sanctions is bad policy and bad business,” suggests the United Against Nuclear Iran (UANI) president David Ibsen. “Companies have had 2 years post-JCPOA to explore the Iranian market and for the most part have found it wanting due to the endemic corruption, red-tape and lax business practices. Blocking statues and EIB subsidies will never cancel out the combined risks presented by US sanctions and potential loss of access to the US market.”
Ibsen also said EU companies are aware of the real risks to their business if they continue trading with Iran. “This misguided and unnecessary policy by the EU will only serve to harm European companies and ultimately further strain EU-US relations,” said Ibsen