EU Support for European Companies in Iran if the US Exits the JCPOA

A senior EU official stated on Thursday, February 8, that if the US withdraws from the nuclear agreement with Iran (JCPOA) and reinstates international sanctions against Iran, the EU may enact new laws to protect European companies' transactions with Iran against these sanctions. According to Reuters, since the lifting of most economic sanctions against Iran in 2016, European countries have sought to develop trade and economic relations with Iran. However, US President Donald Trump announced on January 12 that if France, Germany, and the UK do not address the flaws in what he calls the 'worst deal,' he will reinstate sanctions against Iran. Consequently, the international nuclear agreement with Iran is at risk until the US makes a decision in mid-May. Although European countries have emphasized that they will maintain the agreement even if the US withdraws, they must find ways to mitigate the impact of US sanctions and ensure the continuity of European companies' transactions with Iran. Denis Chaibi, head of the EU's special Iran task force, stated that one option is to revive the 'blocking regulations' established in 1996, which aim to protect European companies from US sanctions. Chaibi mentioned at an economic conference in Paris, 'We are examining various options. Advancing such a measure is not legally complex since the necessary legal tools exist, and it does not require a large discussion and negotiation within the EU.' These regulations were established in 1996 in response to US international sanctions against Cuba. At that time, the EU stated that the US, by imposing these sanctions, sacrifices the independence and decision-making of European countries for its foreign policy. Chaibi added, 'These regulations can be revived and re-enforced, but only if it is completely certain that the US intends to reinstate and enforce international sanctions against Iran. It cannot be preemptively implemented as a protective measure for European interests.' Reuters reminds that the extraterritorial nature of US sanctions means that the US government can penalize any foreign company or institution that trades in dollars, even if these institutions do not use American banks. Under these regulations, in 2014, the US government fined a French bank named BNP Paribas $9 billion. Fear of such fines is one reason for the reluctance of large European banks and companies to trade and invest in Iran. Iranian officials have repeatedly emphasized that the reluctance of major European banks to engage in transactions with Iran is one of the main reasons for the slow improvement of the country's economic situation and have urged European leaders to encourage companies and banks to trade with Iran. Ali Khamenei, the Supreme Leader of Iran, has thanked the European signatories of the nuclear agreement for their efforts to preserve it, but at the same time has asked them to take necessary practical actions if the US withdraws from this agreement. Meanwhile, American officials claim that the Islamic Republic has not been faithful to the 'spirit of the JCPOA' by continuing its missile activities and its 'destabilizing' actions in the region, including in Syria and Yemen. Last month, Trump announced that by extending the suspension of nuclear sanctions against Iran for 120 days, this would be the last time he extends this suspension and that the 'disastrous' flaws in the nuclear agreement with Iran must be corrected. Trump has set four conditions for the US to continue its participation in the JCPOA, which include: 'immediate access' for international inspectors to all sites and facilities in Iran, making the restrictions on Iran's nuclear program permanent, ensuring that Iran does not approach nuclear weapons, and limiting Iran's long-range missile program; as Trump stated, the long-range missile program and Iran's nuclear weapons program are 'inseparable.'