EU urges trade with Iran despite US sanctions
August 07, 2018 - The European Union called on companies to increase their trade with Iran in defiance of US President Donald Trump’s sanction on the country.
The European commission put in place never-before-used legislation to protect the continent’s firms from US sanctions which not only target Iran but its trading partners.
EU foreign affairs chief Federica Mogherini went further by urging European businesses to do their bit to save the 2015 nuclear deal by boosting trade with Iran as the country has been compliant with their nuclear-related commitments.
“We are encouraging small and medium enterprises in particular to increase business with and in Iran as part of something that is for us a security priority,” Mogherini told journalists Tuesday 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. She said it's up to Europeans to decide who they want to trade with.
"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 this is in the security interests of not only our region, but also of the world," she said. "If there is one piece of international agreements on nuclear non-proliferation that is delivering, it has to be maintained."
Mogherini, speaking at a news conference alongside New Zealand Foreign Minister Winston Peters, said the EU and New Zealand saw the need to maintain the nuclear deal with Iran, notwithstanding the US withdrawal, and that she and Peters had discussed in detail how to keep open trade and financial channels with Iran.
Trade between Iran and the EU "is a fundamental aspect of the Iranian right to have an economic advantage in exchange for what they have done so far, which is being compliant with all their nuclear-related commitments," Mogherini said.
EU action against sanctions
The European Commission 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 in Tuesday 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 took the unprecedented step in a bid to salvage the nuclear deal struck with Iran in 2015.
British Foreign Office Minister Alastair Burt told the BBC that the "Americans have really not got this right".
He said it was a commercial decision for companies whether to stay in Iran, but that Britain believed the nuclear deal was important "not only to the region's security but the world's security."
Burt said the EU law to shield European companies can protect them.
“If a company fears legal action taken against it and enforcement action taken against it by an entity in response to American sanctions then that company can be protected as far as EU legislation is concerned,” Alistair Burt, the British minister of state for the Middle East, told BBC radio.
“It is a commercial decision for companies whether they continue to work in Iran.”
EU warning
A special adviser to Mogherini warned that European firms that stop doing business with Iran due to reimposed US sanctions could in turn be sanctioned by the EU.
“If EU companies abide by US secondary sanctions they will, in turn, be sanctioned by the EU," Nathalie Tocci told Britain’s BBC Radio 4 on Monday night.
She characterized the measures as an attempt to "protect European companies.”
Tocci said the move was "necessary in order to signal, diplomatically, to the Iranians that Europeans are serious" about trying to salvage the Iran nuclear deal.
UN support
A UN spokesperson said Monday the United Nations continues to encourage support for all governments for the Iran nuclear deal.
Farhan Haq said UN Secretary General Antonio Guterres continues to view the nuclear deal as a diplomatic achievement and continues to encourage support for all governments for that, just as he did.
In response to concerns of possible humanitarian impact of the sanctions, Haq said “we will have to see what effects of these measures are,” while stressing “regardless of the steps that are being taken,” it is important that “Iran and the other parties comply with the terms of the nuclear deal.”
He added the deal is the best way of resolving this particular situation, “so we would encourage all countries to do what they can to support the agreement.”
Trump open for new deal
The United States reimposed stiff economic sanctions on Iran on Monday, ratcheting up pressure on the Islamic Republic despite statements of deep dismay from European allies, three months after Trump pulled the US out of the international accord limiting Iran's nuclear activities.
The restoration of sanctions means that foreign companies that do not comply with them could be fined or face being cut-off from the US market.
European allies said they "deeply regret" the US action.
“Anyone doing business with Iran will NOT be doing business with the United States,” Trump vowed on Twitter.
A first set of reimposed US sanctions affect financial transactions that involve US dollars, Iran's automotive sector, the purchase of commercial planes and metals including gold.
A second batch of US sanctions targeting Iran's oil sector and central bank are to be reimposed in early November.
Trump warned that those who don't wind down their economic ties to Iran "risk severe consequences."
"I remain open to reaching a more comprehensive deal," Trump said.
Trump's national security adviser John Bolton said Monday if Iran wants to avoid the reimposition of US sanctions it should take up Trump’s offer to negotiate.
Asked in an interview on Fox News what the leaders of Iran could do, Bolton said: “They could take up the president’s offer to negotiate with them.”
Bolton, one of the administration’s main hawks on Iran, said if Iran wants to get out from under the squeeze, it “should come and sit down. The pressure will not relent while the negotiations go on.”
“If Iran were really serious they’d come to the table. We’ll find out whether they are or not.”
“No sense"
But Iranian President Hassan Rouhani dismissed the idea of talks while crippling sanctions were in effect.
"If you're an enemy and you stab the other person with a knife, and then you say you want negotiations, then the first thing you have to do is remove the knife," Rouhani said in a televised interview.
"Negotiations with sanctions doesn't make sense. They are imposing sanctions on Iranian children, patients and the nation," the president said.
He said Iran had "always welcomed negotiations" but that Washington would first have to demonstrate it can be trusted.
"How do they show they are trustworthy? By returning to the JCPOA," he said, using the technical name for the nuclear deal.
Rouhani said the proposal for talks is a stunt to sow chaos in Iran and confuse American voters at home ahead of mid-term elections in November. He said Washington was becoming isolated internationally and would come to regret imposing sanctions against the views of its allies and other world powers.
"America will regret imposing sanctions on Iran ... They are already isolated in the world. They are imposing sanctions on Iranian children, patients and the nation," he said.
Yahoo, AP, Reuters, AFP and Xinhua contributed to this story.