Jun 7, 2018 (BE2C2) — The European Union is taking step to protect Iran nuclear deal and moving forward with a measure to protect EU companies trying to invest in Iran particularly in the Iranian energy and infrastructure sector.
THE European Union is also concerned that 20 billion Euro worth of investments in Iran are under risk and has started to take measures. EU trade with Iran has more than tripled from the pre-deal low of £5.5 billion to £18.5 billion last year.
The EU Commission President Jean-Claude Juncker after Trump’s announcement of withdrawal from Iran nuclear deal had said there was a unified position in Europe that respecting the U.N.-backed 6-nation agreement with Iran was essential for peace. So long as Iran upholds its end of the bargain, European powers will stay in the deal, he said.
On Wednesday, the commission said it adopted the statute that adds provisions for Iranian outreach through the European Investment Bank.
By Aug. 6, when the first set of U.S. sanctions go into force, European companies could be protected by these blocking statutes that allow them to recover damages and nullifies the effect of any judgment imposed by a foreign court.
It also authorized the European Investment Bank (EIB) to finance Iranian projects, while noting it was up to the bank to give the go-ahead for any investments.
Barring objections, the commission said the measures would be in force by August– when the US sanctions go into effect.
Germany, France and the United Kingdom also appealed to Washington not to punish European companies for doing business in Iran, in a letter sent to US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin, dated June 4.
They requested exemptions for EU companies that struck deals in Iran after the nuclear deal came into effect, and for key sectors such as energy, civil aviation and infrastructure, as well as exemptions to maintain financing channels with Iran, among other things.
Besides the EU and the US, the Iran nuclear deal was negotiated by Britain, France, Germany, Russia and China. It was formally endorsed by the UN Security Council, incorporating it into international law.
Iran said on Wednesday it was in “preparatory works” to restart nuclear activities in the event of the failure of the 2015 accord.
The Iranian economy has been severely hurt by US sanctions imposed on the country.
Without relief, French supermajor Total was among the European companies that said it would have to leave Iran. Speaking last month at the Center for Strategic and International Studies, a U.S. think tank, Total CEO Patrick Pouyanné said the U.S. decision could put the advantage in the hands of U.S. adversaries.
“What would be not good neither for the U.S., nor for Europe, is if that at the end only Russia and China can do business in Iran,” he said at the time.
The European Commission’s announcement followed comments from Jean-Yves Le Drian, the French minister of European and Foreign Affairs, who said it was incumbent upon European members to keep the deal in place.
Le Drian said European parties have looked to 1990s rules that would protect French and other European companies from U.S. pressure. A financial mechanism that’s “immune” to the U.S. dollar would secure European financial interests in Iran and ensure its oil can still be exported, he said.
U.S. sanctions pressures could pull about 1 million barrels of Iranian oil off the market by the end of the year. With the Organization of Petroleum Exporting Countries coordinating on voluntary production cuts, the loss of Iranian barrels could put the global oil market in a deficit.
Elsewhere, the European Commission said it endorsed a decision to impose duties on imported U.S. goods in response to Trump’s decision to impose stiff aluminum and steel tariffs. According to World Trade Organization rules, the commission said, Europe can work to counteract the billions of dollars in goods affected.
“We regret that the United States left us with no other option than to safeguard EU interests,” European Trade Commissioner Cecilia Malmström said in a statement.