Europe Refuses to Isolate Tehran Economically

Europe Refuses to Isolate Tehran Economically

Tuesday, 17 July, 2018 - 09:00
EU foreign policy chief Federica Mogherini. (AFP)
London - Asharq Al-Awsat
EU foreign policy chief Federica Mogherini announced Monday EU foreign ministers’ rejection of the US demand to isolate Iran economically.

EU countries also gave European firms legal cover to operate in Iran despite the US pullout in May from the 2015 nuclear deal.

"Today, the (European) Council has endorsed the update of the blocking statute annex on the nuclear deal with Iran," Mogherini told reporters in Brussels following a meeting with EU foreign ministers, according to AFP.

She said the 28 countries were doing all they could to save the deal but conceded President Donald Trump's administration could still wreck it.

She said the European Parliament gave its consent to the statute two weeks ago.

The "blocking statute" forbids EU firms from complying with US sanctions, allowing them to recover damages from such penalties and nullifying any foreign court rulings against them.

The blocking statute is due to enter force on August 6, when the first set of US sanctions are due. The second set is due November 4, just before US legislative elections.

Washington has rejected a European request for some of its key businesses to be exempt from US sanctions on Iran.

Ministers from Germany, France, the UK and EU last month requested broad carve-outs from Washington's sanctions for sectors including healthcare, finance, automotive and energy doing business with Iran.

The purpose of this law, which was first adopted in 1996, is to block the imposition of US sanctions on corporations and individuals in the world, under the so-called principle of universality of US law.

European giants, such as France's Total, have decided to withdraw from Iran unless they benefit from an exemption from US sanctions.

"It is a difficult exercise because the weight of the US in the global economy and the financial system is obviously relevant," Mogherini said.

"We will continue to do all we can to try and prevent this deal from being dismantled because we believe the consequences of this would be catastrophic for all."

The move came as the Financial Times reported that international companies active in Iran “face the threat of US sanctions within weeks after Washington rebuffed a high-level European plea to exempt crucial industries that would help keep a nuclear deal with Tehran alive.”

Mike Pompeo, US secretary of state, and Steven Mnuchin, Treasury secretary, have written a letter formally rejecting an appeal for carve-outs in finance, energy and healthcare because Washington wants to maximize financial pressure on Iran, according to diplomats with knowledge of its contents.

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