EU struggles to shield firms from Trump Iran sanctions fallout
EU companies face secondary sanctions from the White House over trade deals with Iran. Secondary sanctions cut off foreign businesses from the US financial system, making them unattractive business partners.
European oil and gas, aviation, automotive, railways, banking and healthcare industries all jumped to sign deals in Iran as trade liberalised.
The most significant agreements Iran signed with foreign companies included commercial aircraft to modernise its ageing fleet.
Boeing planned to sell 80 jets to Iran Air. The first aircraft was due to be delivered this year. Boeing had also agreed to sell 30 737 MAX aeroplanes to Aseman Airlines, another Iranian carrier.
European rival Airbus, which has a plant in Alabama, had agreed to sell 100 aircraft, worth $19bn, to Iran.
US Treasury Secretary Steven Mnuchin yesterday told reporters that he would revoke licences for Boeing and Airbus to export commercial planes, related parts and services to Iran after a 90-day period.
French oil giant Total signed a $5bn contract with the National Iranian Oil Company in July 2017 for the development and production of phase 11 of South Pars, the world's largest gas field.
Now its stake in the project will probably be taken over by its Chinese partner, CNPC - Beijing, unlike Paris, is willing to challenge president Trump.
Germany has acknowledged it could be hard to protect companies doing business with Iran as the US tightens the screws.
European powers want to keep the Iran deal alive without the United States, Germany's Foreign Minister Heiko Maas said before a meeting with his French, British and Iranian counterparts.
"We will search this evening for ways to keep the Iran deal alive without the United States," Maas said.
"We want to hear what expectations there are in Iran, how the impact of the sanctions that the United States has imposed, and will impose, can be counterbalanced," he said.
Over the weekend, German Economy Minister Peter Altmaier said his country viewed President Donald Trump's unilateral withdrawal from the nuclear pact with Iran as wrong, adding that Berlin hopes Washington can still be persuaded not to punish foreign firms doing business there.
Mr Maas said, however, that it could be difficult to protect European firms from any fallout from the US decision.
"I do not see a simple solution to shield companies from all risks of American sanctions," Maas told the 'Bild am Sonntag' newspaper.
Altmaier said there was a deadline of up to 90 days for foreign firms to comply with US sanctions or face penalties.
"In this time, we'll use all possibilities to persuade the US government to change its behaviour," he told ZDF television.
Trump's decision a week ago to renege on the 2015 nuclear accord with Iran and reimpose sanctions against Tehran came with the threat of penalties against any foreign firms involved in business there.
Meanwhile, the US imposed sanctions on Iran's central bank governor, Valiollah Seif, and Iraq-based Al-Bilad Islamic Bank for "moving millions of dollars" for Iran's elite Revolutionary Guard Corps, as Washington seeks to cut off funding for what it says is Iran's malign activities in the Middle East. (Graphic News/Reuters)