Yahoo Finance EU tells businesses to boost trade with Iran despite US sanctions
The EU has called on companies to increase their trade with Iran in defiance of Donald Trump’s sanction on the country.
The European commission today put in place never-before-used legislation to protects the continent’s firms from US sanctions which not only target Tehran but their trading partners.
And EU foreign affairs chief Federica Mogherini has gone further by urging European businesses to do their bit to save the Iran nuclear deal by boosting trade with the country.
“We are encouraging small and medium enterprises in particularly to increase business with and in Iran as part of something that is for us a security priority,” Mogherini told journalists during a visit to New Zealand.
“I want to make this very clear because we’re talking about trade and economic relations with Iran because – this is an integral part of the nuclear deal.”
The Italian politician added that preserving trade with Iran in spite of Trump’s tactics were a matter of sovereignty.
Trump announced in May that he was pulling the US out of the 2015 nuclear deal, a key foreign policy legacy of his predecessor Barack Obama, which saw some economic sanctions against Iran lifted in exchange for limits on the country’s nuclear programme.
The US today reimposed extraterritorial sanctions on Iran, meaning that foreign companies that do not comply with them could be fined or face being cut-off from the US market.
“Anyone doing business with Iran will NOT be doing business with the United States,” Trump vowed on Twitter.
The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!
— Donald J. Trump (@realDonaldTrump) August 7, 2018
But the European Commission has implemented a previously unused regulation that seeks to cancel the effect of the US policy on European companies doing “legitimate business” with Iran.
An updated EU “blocking statute”, which was first created in 1996 to counter the effects of US sanctions on Cuba, came into force at the same time as US legation this morning.
It bans European companies from complying with the US sanctions, nullifies any US court order against European businesses and makes it legally possible for affected firms to seek compensation.
The commission says firms can bring claims for damages before national courts who would recover them through the “seizure and sale of the assets of the person causing the damage” – in this case the US government. That is likely to be difficult to enforce in practice.
The EU has taken the unprecedented step in a bid to salvage the nuclear deal struck with Iran in 2015.
Mogherini added: “We are doing our best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran because we believe that this is the security interests of not only our region but also of the world.
“If there is one piece of international agreements on nuclear non-proliferation that is delivering, it has to be maintained.”
UK foreign minister Jeremy Hunt has published a joint statement with Mogherini and his counterparts from France and Germany which said preserving the deal is a “matter of respecting international agreements and a matter of international security.”
It committed the European powerhouses to maintaining financial channels with Iran, as well as preserving the imports of oil and gas from the country.
Iranian exports of oil and fuel to the EU were up by 344 per cent to €5.5bn in 2016.
MORE: Donald Trump’s sanctions on Iran described as ‘psychological warfare’
