Yahoo Finance EU shields businesses from fallout of Trump’s nuclear sanctions on Iran
European businesses will be sheltered from the fallout of Donald Trump’s decision to pull the US out of the Iran nuclear deal under a previously unused EU trade protection law.
The European Commission announced it is enacting its so-called “blocking statute” which forbids EU companies from complying with sanctions re-imposed by the US President.
It was introduced in 1996 to counter the effects of US sanctions on companies trading with Cuba but has not been implemented until now.
The measure represents the first practical step towards saving the Iran nuclear deal taken by the EU.
MORE: European leaders vow to stand-up to Trump ‘bullying’ and save Iran deal
“As long as the Iranians respect their commitments, the EU will of course stick to the agreement of which it was an architect,” said European Commission President Jean-Claude Juncker.
“But the American sanctions will not be without effect. So we have the duty, the Commission and the European Union, to do what we can to protect our European businesses, especially SMEs.”
Under the “blocking statute”, companies hit by sanctions will also be able to seek compensation and won’t have to comply with any US court orders against them.
The measures come days after EU-Iran talks over how to take the nuclear deal out of “intensive care”, which were attended by UK Foreign Secretary Boris Johnson.
They will only into force if they are signed-off by the European Parliament and European Council within the next two months, but that is likely to happen before the US sanctions take effect on August 6.
The Commission also urged national governments to make one-off transfers to Iran’s central bank to pay for oil before US sanctions on transactions take effect.
And, in a bid to reassure the Iranian government of the EU’s political commitment to saving the nuclear deal, Energy Commissioner Miguel Canete is visiting Tehran this weekend.
MORE: EU hopes to take Iran deal out of ‘intensive care’ within weeks
Billions of Euros worth of trade depend on saving the 2013 nuclear deal, which opened trade with Iran in exchange for limits of the country’s nuclear programme.
Iranian exports of oil and fuel to the EU were up by 344 per cent to €5.5bn in 2016.
In the same year, EU investment in Iran was valued at €20bn.
Boris Johnson said this week that it is right to “protect legitimate UK and European businesses, who may want to trade with Iran, who do want to trade with Iran, and who have great plans to do that.”
