Above Photo: Donald Trump has pulled the US out of the Iran nuclear deal and unveiled new sanctions Evan Vucci/AP
NOTE: CNBC reports:
“The European Commission is proposing that EU governments make direct money transfers to Iran’s central bank to avoid U.S. penalties, an EU official said, in what would be the most forthright challenge to Washington’s newly reimposed sanctions.
The step, which would seek to bypass the U.S. financial system, would allow European companies to repay Iran for oil exports and repatriate Iranian funds in Europe, a senior EU official said, although the details were still to be worked out.
The European Union, once Iran’s biggest oil importer, is determined to save the nuclear accord, that U.S. President Donald Trump abandoned on May 8, by keeping money flowing to Tehran as long as the Islamic Republic complies with the 2015 deal to prevent it from developing an atomic weapon.
The U.S. Treasury announced on Tuesday more sanctions on officials of the Iranian central bank, including Governor Valiollah Seif. But the EU official said the bloc believes that does not sanction the central bank itself.”
“Commission President Jean-Claude Juncker has proposed this to member states. We now need to work out how we can facilitate oil payments and repatriate Iranian funds in the European Union to Iran’s central bank,” said the EU official, who is directly involved in the discussions.
Leaders approve ‘blocking clause’ to protect European companies
Brussels has unveiled details of measures that would block American sanctions against European companies trying to do business with Iran, in a bid to head off Donald Trump’s new economic assault on the Middle Eastern county.
The US president announced the re-introduction of the anti-Iran sanctions as he confirmed US was breaking the international deal designed to put a stop to the country’s nuclear programme – with the end to sanctions as a reward for compliance.
Mr Trump’s administration has not ruled out hitting European companies that trade with Iran with its new measures, so the EU has now responded by updating a “blocking statue” originally meant to circumvent a the US embargo against Cuba in the 1990s.
The move would prohibit EU-based companies from complying with the US sanctions, and provide compensation if they were affected by American penalties against them.
“As long as the Iranians respect their commitments, the EU will of course stick to the agreement of which it was an architect – an agreement that was unanimously ratified by the United Nations Security Council and which is essential for preserving peace in the region and the world,” Jean-Claude Juncker, the European Commission president, said on Friday morning.
“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 small and medium enterprises.”
The European Parliament and European Council will be allowed to scrutinise the new policy; it was unanimously by EU heads of state and government at a summit in Sofia this week. The original blocking clause was never actually used when it first drawn up to circumvent the US’s anti-Cuba embargo in 1996.
We have the duty, the Commission and the European Union, to do what we can to protect our European businesses
The EU has also announced that the financial might of the European Investment Bank will be brought to bear to back EU projects in Iran, and that “one-off” transfers to Iran’s central bank would be explored. Energy commissioner Miguel Arias Cañete will alsovisit the Iranian capital of Tehran this weekend to explore the possibility of more financial development assistance to Iran.
The measures all represent an attempt to save the Iran nuclear deal, known officially as the Joint Comprehensive Plan of Action (JCPoA). Even before Mr Trump pulled the US out of the deal, Iran complained that the 2015 deal was not yielding the expected economic benefits. Iran and the deal’s other signatories, the UK, Germany, France, EU, China, and Russia, all say they want the agreement to continue and that the US does not have the power to terminate it unilaterally.