European Union unveils 'statute' to protect Iran trade against U.S. sanctions

European Union unveils 'statute' to protect Iran trade against U.S. sanctions

New US sanctions would be a significant blow for European companies that actively went to the Iranian market after 2015.

The European Commission on Friday proposed activating a dormant statute to shield European firms doing business with Iran from renewed US sanctions.

The "blocking statute" is a 1996 regulation originally created to get around Washington's trade embargo on Cuba, which prohibits EU companies and courts from complying with specific foreign sanction laws, and says no foreign court judgments based on these laws have any effect in the European Union. The "blocking statute", which EU member states and the European Parliament must still endorse, is aimed at easing the fears of European companies that invested in Iran after the deal.

"We will not negotiate with the sword of Damocles hanging over our heads", Mr. Juncker said.

European Union foreign policy chief Federica Mogherini, however, said she could not talk about giving Iran guarantees for the economic benefits of the 2015 agreement.

Other measures proposed by the Commission, the EU executive, include urging EU governments to make transfers to Iran's central bank and to start the legal process of allowing the European Investment Bank to lend to EU projects in Iran.

The EU is planning to use a so-called "blocking statute" to keep US sanctions from impacting European companies.

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And now that Europe has openly rebelled against Trump's sanctions, one wonders how long before the selling in oil resumes, as it is becoming increasingly clear that unlike 2012, Europe - and most of Asia - will continue buying Iranian oil, suggesting that the decline, if any, in Iranian exports will be a few hundred thousands barrels at most, a number which we expect will shrink to 0 as Iran offers increasingly preferential prices to its non-USD paying clients, especially now that Asian oil demand is soaring.

In Berlin, the president of the German Industry Federation (BDI), Dieter Kempf, expressed concern on Friday about the impact that these European protection measures could have on German companies in the United States.

It comes after the US President pulled out of the Iran nuclear accord and gave businesses around the world notice to end their dealings with Tehran.

What action are Europe's businesses taking?

EU President Donald Tusk renewed attacks on him. "We have pledged to take necessary political steps for our companies to stay in Iran".

But the most accurate observations by Macron was that Trump's Iran decision strengthens both Russian Federation and China in the region, something we pointed out weeks ago, begging the question whose interests is Trump representing.

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