Europe Fights Back Against U.S. Sanctions on Iran

European leaders meeting at an EU summit on Thursday vowed to protect companies from the negative effects of U.S. sanctions on Iran.

Last week, President Donald Trump decided to pull out of the Iran nuclear deal, which means that restrictions on Iran will be reimposed, likely including extra-territorial “secondary sanctions” too. These could have serious adverse effects on European companies doing business with Iran and for that reason, the topic has the highest priority on the agenda for EU leaders meeting in Sofia, Bulgaria today.

Some European firms, worried that they may be hit by U.S. penalties for doing business with Iran, have decided to exit it altogether in order to avoid that. Total, Maersk and Allianz are among those which have signaled they could exit Iran.

CNBC reports that French President Emmanuel Macron said on Thursday that the EU must protect its companies trading with Iran. Macron made his comments as he arrived at the EU-Western Balkans summit.

“International companies with interests in many countries make their own choices, according to their own interests. They should continue to have this freedom,” he told reporters.

After failing to persuade President Trump not to leave the deal, EU leaders are now focused on trying to maintain it without him, with the main concern being the protection of European companies.

Lithuanian President Dalia Grybauskaite said the EU was looking at “technical solutions” to protect its companies, including a “blocking” clause that “could partially protect European companies working in Iran.”

“Among the proposed solutions was using European powers to ban banks in the region from complying with U.S. sanctions, but any such move would be of ‘limited effectiveness’,” said European Commission Vice President Valdis Dombrovskis.

Speaking to the EU parliament, Dombrovskis said, “the EU blocking regulation could be of limited effectiveness there, given the international nature of the banking system and especially the exposure of large systemic banks to the U.S. financial system and U.S. dollar transactions.”

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