Businesses in Europe will be sheltered from the fallout of the decision of Donald Trump to pull the United States out of the Iran nuclear deal under a previously unutilised trade protection law of the European Union.
The European Commission announced that it is imposing its so-called “blocking statute” which prohibits EU companies from complying with sanctions that are re-imposed by the President of the US.
The law was introduced in 1996 to counter the impacts of US sanctions on companies that are trading with Cuba. However, it has not been implemented until now.
The measure draws the first practical step towards saving the Iran nuclear deal that is taken by the European Union.
Jean-Claude Juncker, the President of the European Commission, stated: “As long as the Iranians respect their commitments, the EU will, of course, stick to the agreement of which it was an architect.”
“But the American sanctions will not be without effect. So we have the duty, the Commission and the European Union, to do what we can to protect our European businesses, especially SMEs,” added Juncker.
Under the “blocking statute,” the companies that are affected by sanctions will also be able to ask for compensation and would not have to comply with any court orders of the US against them.
The said measures arrive days after EU-Iran discussions over how to take the nuclear deal out of the “intensive care,” which were attended by Boris Johnson, the Foreign Secretary of the UK.
The law will only be imposed if they are signed-off by the European Council and European Parliament within the next two months. However, that is likely to happen before the sanctions of the US take effect on the 6 of August.
The Commission also called on national governments to make one-off transfers to the central bank of Iran to pay for oil before the sanctions of the US on transactions take effect.
Also, in an attempt to reassure the Iranian government of the political commitment of the EU to saving the nuclear deal, Miguel Canete, the Energy Commissioner, is visiting Tehran this weekend.
Trades that are worth billions of Euros rely on saving the 2013 nuclear deal, which opened trade with Iran in exchange for limits of the nuclear programme of the country.
Exports of oil and fuel of Iran to the EU were increased by 344 percent to €5.5bn in 2016.
During the same year, the investment of the EU in Iran was valued at €20bn.
This week, Boris Johnson said that it is right to “protect the legitimate UK and European businesses, who may want to trade with Iran, who do want to trade with Iran, and who have great plans to do that.”