18 May, 2018
EU Commission President Jean-Claude Juncker announced that the bloc plans to kickstart a 1996 law that would prohibit European companies from complying with United States sanctions on Iran.
The commission has launched a process to activate the Blocking Statute, which forbids European Union companies from complying with extraterritorial effects of USA sanctions and allows them to recover damages arising from such sanctions.
The European Commission said on Friday the measure would come into force within two months, unless the European Parliament and EU governments formally rejected it.
The "blocking statute" is a 1996 regulation originally created to get around Washington's trade embargo on Cuba, which prohibits EU companies and courts from complying with specific foreign sanction laws, and says no foreign court judgments based on these laws have any effect in the European Union.
"The EU blocking regulation could be of limited effectiveness there, given the global nature of banking system and especially the exposure of large systemic banks to US financial system and USA dollar transactions", he said.
In recent days, several European companies have announced their intention to wind down business in Iran, raising questions about how much the EU can deliver on its promises.
"We must act now" - quoted Juncker DW.
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The EU is planning to use a so-called "blocking statute" to keep US sanctions from impacting European companies.
Historic deal on Iran's nuclear program from 2015 provides for the removal of sanctions against Iran in exchange for limiting its opportunities for the enrichment and storage of nuclear materials.
Why is the United States imposing sanctions on Iran?
How have European companies responded?
It comes after the US President pulled out of the Iran nuclear accord and gave businesses around the world notice to end their dealings with Tehran. "We have pledged to take necessary political steps for our companies to stay in Iran".
Much to Europe's displeasure, foreign companies doing business with Iran are also at the crosshairs of the US sanctions. "The president of the French republic is not the CEO of Total", said French President Emmanuel Macron, commenting on the decision by the French oil firm to withdraw from an Iranian project.