EU reassures Iran firms to be protected from U.S. sanctions

Sheetal Sukhija - Wednesday 16th May, 2018

BRUSSELS, Belgium - Even as European foreign ministers prepare to meet in Brussels to salvage the Iran nuclear deal after the U.S. withdrew from the accord this month, now EU governments have issued a reassurance to Tehran.

EU governments reportedly gave assurances to Iran that they will seek to protect companies doing business in Iran from renewed U.S. sanctions.

The statement was issued as Iran’s foreign minister, Mohammad Javad Zarif, met Federica Mogherini, the EU external affairs chief, on Tuesday morning.

Zarif, who is now scheduled to meet the foreign ministers of France, Germany and the U.K. – the three European signatories to the deal - is seeking assurances that EU trade with Iran will continue to grow, despite the U.S. President Donald Trump pulling the U.S. out of the nuclear deal.

Following his first meeting, Zarif said that talks were “moving in the right direction.”

He reportedly added that it was “a nice and constructive meeting.”

After America’s withdrawal from the Obama era deal, the U.S. and Europe now face a potential crisis and a sanctions war which has raised serious questions about European economic sovereignty.

Reports noted that these issues feature on the agenda for a planned meeting between EU heads of state on Wednesday in Sofia.

On Tuesday, speaking in the House of Commons, the U.K. foreign secretary, Boris Johnson, admitted it would be very difficult to protect European business “due to the extra-territorial effect of U.S. sanctions and the difficulty companies have when they touch the live wire of the American financial network and they find themselves almost immediately sanctioned.”

Reports stated that the French president, Emmanuel Macron had held a discussion with his Russian counterpart, Vladimir Putin, stressing that France, like Russia and China, disagreed with Trump’s decision last week to pull out of the deal.

Meanwhile, another meeting was scheduled to be held by the French finance minister, Bruno Le Maire, and the French foreign minister, Jean-Yves Le Drian, with 60 French firms that trade regularly with Iran.

The meeting will be focussed on the legal and technical implications of the sanctions.

On Tuesday, an EU spokesman played down suggestions that concrete proposals would be offered to Iran while insisting that it would be left in no doubt that the EU will stay in the deal, as long as inspectors find that Iran is complying with its terms.

Further, another EU official pointed out that there was no need to take specific decisions at the informal dinner of EU heads of state in Sofia on Wednesday evening.

According to reports, possible measures include reviving an EU-wide blocking regulation from 1996, which was intended to prevent U.S. sanctions from affecting European firms trading with Cuba, Libya and Iran.

A senior EU official pointed out that the commission team were “very well aware that there is no one magic option which can be applied.”

Adding that measures would take time to come into effect. 

The official said, “There will be a complicated and comprehensive pattern of options both at the EU and at the national level and therefore it may take some time to establish all of them.”

Not just European firms, but all firms have been given between three and six months by the U.S. to wind down their business dealings with Iran.

The timeframe IS dependent on the nature of the business. 

However, European businesses and Iranian moderates are seeking relatively swift assurances that trade will be protected.

This week, the U.S. secretary of state, Mike Pompeo reportedly spoke to his European counterparts to set out how he expects European companies to withdraw from trade with Iran.