The European Union(EU) took steps Friday to avoid reimposed US sanctions on Iran and save the international nuclear deal, as a rift with Washington widened.
The European Commission, the bloc’s executive arm, moved to help EU firms skirt US penalties and have member governments directly pay Iran’s central bank for oil.
The commission, which took two other steps, said it was acting on a “green light” EU leaders gave at a meeting in the Bulgarian capital Sofia on Thursday.
The commission “launched the formal process to activate the blocking statute by updating the list of US sanctions on Iran falling within its scope,” it said.
The executive said it hopes the statute will be in force before August 6 when the first batch of reimposed US sanctions take effect.
President Donald Trump last week pulled Washington out of the 2015 international deal with Iran to curb its nuclear programme in return for easing sanctions.
The statute, which the 28 EU member states and the European Parliament must endorse, is aimed at reassuring European firms that invested in Iran after the deal.
“The blocking statute forbids EU companies from complying with the extraterritorial effects of US sanctions,” the commission said.
It also “allows companies to recover damages arising from such sanctions from the person causing them, and nullifies the effect in the EU of any foreign court judgements based on them,” the executive added.
– Potential bargaining chip –
The “blocking statute” is a 1996 regulation originally created to circumvent Washington’s trade embargo on Cuba, which prohibits EU companies and courts from complying with specific foreign sanction laws.
However, the Cuba row was settled politically, so the blocking regulation’s effectiveness was never put to the test, and its value may lie more in becoming a bargaining chip with Washington.
Since the US withdrawal, the remaining parties have all pledged to stick to the deal if Tehran respects its terms.
Tehran has warned it is ready to resume no-holds-barred “industrial-scale” uranium enrichment unless Europe can provide solid guarantees to preserve Iran’s economic benefits under the deal.
During talks in Brussels on Tuesday, Iran’s foreign minister Mohammad Javad Zarif said efforts to save the deal were on the “right track”.
The commission said the political directors or deputy foreign ministers from the EU, Britain, France and Germany will meet on May 25 in Vienna with their counterparts from China and Russia.
EU officials said it will be their first such meeting with envoys from Beijing and Moscow — which are also trying to save the deal — since Washington pulled out.
– ‘Confidence-building measures’ –
On a second front, the commission said it is encouraging EU member states to explore the idea of “one-off bank transfers” to the Central Bank of Iran.
The approach, it said, could ensure Tehran receives its oil-related revenues if US sanctions target EU firms active in oil transactions with Iran.
An EU official told reporters the bloc’s energy and climate commissioner Miguel Arias Canete will discuss the issue during his weekend visit to Tehran.
The official said the EU wants to explore how to “facilitate payment” of oil imports from Iran, but “equally importantly, the repatriation of Iranian funds” currently in the bloc.
The commission also moved Friday to remove hurdles for the European Investment Bank (EIB) to finance activities outside the EU, such as in Iran.
It said the move will “allow the EIB to support EU investment in Iran,” particularly involving small and medium-sized companies.
The commission also called for doing more to help Iran’s energy sector and small and medium-sized companies, as part of “confidence-building measures”.
In pulling out, Trump complained the nuclear deal does nothing to stop Iran’s ballistic missile programme or its interference in conflicts across the Middle East from Syria to Yemen.