European leaders plan to fight President Trump’s effort to renew sanctions on Iran, which could end up hitting European companies, top diplomats said Monday.
“France rejects the principle of extraterritorial sanctions,” the French Foreign Ministry said in a Monday bulletin. “We ask the United States to ensure that sanctions do not apply to French and European companies that trade with Iran or invest there, in keeping with the nuclear agreement. France is acting to protect its companies.”
Iran has threatened to resume its nuclear enrichment if European nations fail to support investment with the regime. But Trump’s exit from the deal marks an attempt to cut off all business with the West, in order to increase pressure on the regime, even at the risk of an economic confrontation with major allies.
Still, European officials made it clear they will defend their right to maintain current economic ties to Iran.
“The UK and France are determined to conserve the essence of the Iran nuclear deal, and when I say the essence of the Iran nuclear deal, it’s a trade-off and a sensible trade off,” British Foreign Secretary Boris Johnson said after a meeting with French Foreign Minister Jean-Yves Le Drian. “[T]he advantage from the Iranian point of view is that they should have some benefits from economic participation, economic engagement with us in the West.”
U.S. officials believe that allies have little choice but to go along with Trump’s plan, because of the threat of an American crackdown on anyone who invests in Iran. By refusing to grant another waiver under federal law for the sanctions, Trump is set to bring back into force a suite of provisions that crack down on companies that invest in major sectors of the economy.
“We’re the hottest place to invest, in the energy sector, in the world,” Sen. Dan Sullivan, R-Alaska, told the Washington Examiner. “For an administration official to be able to go to a European energy company and say, ‘you have a choice, Iran vs the United States energy sector,’ that’s powerful leverage.”
The sanctions laws also lock Iranian partners out of the U.S. financial system, making it difficult for European governments to insulate companies from Trump’s decision.
“I do not see a simple solution to shield companies from all risks of American sanctions,” German Foreign Minister Foreign Minister Heiko Maas told local press Sunday, according to Reuters.
They hope to develop such a plan this week, in consultation with Iranian and European Union officials.
“We are determined to do that,” Johnson said. “And as far as we possibly can, to protect businesses from the effect of American primary and secondary sanctions and as you know, there is a time delay between the imposition of the secondary sanctions and so that gives us a bit of a margin to work on our response.”
