Germany's Inability to Fully Support Companies Against U.S. Sanctions

In an interview published on Tuesday, May 21, German Economy Minister Peter Altmaier acknowledged the inability of his government and other European governments to provide "full support" to companies against U.S. sanctions on Iran. According to Reuters, citing a German-language newspaper, Altmaier emphasized that the German government will support companies as much as possible, but is "not able to fully protect them." On May 8, U.S. President Donald Trump announced that the U.S. would withdraw from the nuclear deal with Iran, known as the JCPOA, and in addition to reinstating suspended sanctions against Iran, would impose new penalties on Tehran. Following this decision, other parties to the nuclear agreement, especially Europeans, emphasized the continuation of the JCPOA without the U.S. However, despite the support of European political figures for continuing the JCPOA without the U.S., companies and economic and commercial parties in Asia and Europe that cooperate with Iran are uncertain about the future of their trade relations with Iran. Several major companies have already expressed their inability to withstand U.S. sanctions in official statements. For instance, the CEO of Siemens, a German company, stated last week that after the U.S. withdrawal from the JCPOA and the imposition of new sanctions, the company cannot engage in new business with Iran. Similarly, the French company Total has stated that it cannot continue work on Phase 11 of Iran's South Pars gas field without being exempted from U.S. sanctions. Now, the position of the German Economy Minister may confirm the approach of these companies and is likely to diminish their confidence in working in Iran. Altmaier stated that the German government will assist companies in working in Iran, but "cannot fully protect them against U.S. sanctions." In response to a question about the type of assistance his government could provide to companies, he said that Berlin could help companies assess the situation and encourage the U.S. to grant exemptions to some companies. He remarked, "We will help wherever we can, but there is no way to completely bypass the consequences of this unilateral withdrawal [by the U.S.]." This comes as U.S. Secretary of State Mike Pompeo, in his first foreign policy speech in this position, stated that his government would impose "the most severe sanctions in history against Iran, and if the Iranian government does not change its behavior, the pressure of sanctions will increase." Pompeo also outlined "12 conditions" for negotiations and reaching a new agreement with Tehran. Reuters reports that German Foreign Minister Heiko Maas is scheduled to meet with Pompeo in Washington on Tuesday. One of the topics likely to be discussed between Pompeo and his German counterpart will be the harsh sanctions against the Islamic Republic and their implications for German companies.