The European Commission on May 18 announced steps to preserve the interests of European companies investing in Iran and to demonstrate the EU’s commitment to the Iran nuclear deal.

On May 8, U.S. President Donald Trump issued a Presidential Memorandum ceasing U.S. participation in the Iran Nuclear Deal (the Joint Comprehensive Plan of Action), emboldening the European Union to preserve its stance in the deal. “As long as the Iranians respect their commitments, the EU will of course stick to the agreement of which it was an architect,” said European Commission President Jean-Claude Juncker. “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.”

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In a statement, the European Commission stressed that, “The European Union is committed to mitigating the impact of U.S. sanctions on European businesses and taking steps to maintain the growth of trade and economic relations between the EU and Iran that began when sanctions were lifted. This can only be achieved by a combination of measures taken at national and European level.”

The European Union is also “committed to maintaining the essential cooperation that exists with the United States in many areas. The United States remain a key partner and ally.”

Following the unanimous backing of EU heads of state and government at an informal leaders meeting on May 16 for the proposals of President Juncker and High Representative/Vice-President Federica Mogherini, the European Commission on May 18 acted on the following four fronts, verbatim:

Launched the formal process to activate the Blocking Statute by updating the list of U.S. sanctions on Iran falling within its scope. The Blocking Statute forbids EU companies from complying with the extraterritorial effects of U.S. sanctions, allows companies to recover damages arising from such sanctions from the person causing them, and nullifies the effect in the EU of any foreign court judgements based on them. The aim is to have the measure in force before Aug. 6, 2018, when the first batch of U.S. sanctions take effect.

Launched the formal process to remove obstacles for the European Investment Bank (EIB) to decide under the EU budget guarantee to finance activities outside the European Union, in Iran. This will allow the EIB to support EU investment in Iran and could be particularly useful for small and medium-sized enterprises (SMEs). All relevant rules and procedures will apply to individual financial operations. The European Parliament and the Council will have two months to object to these measures, once proposed, before they enter into force. This period can be shorter if both Institutions signal their non-objection before the end of the period. The processes can be ended if political circumstances no longer justify the adoption of the measures.

The Commission will continue and strengthen the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector and concerning SMEs. As a first step, the Commissioner for Climate Action and Energy, Miguel Arias Cañete, will travel to Tehran this weekend. Financial assistance through the Development Cooperation or Partnership Instruments will also be mobilized.

The Commission is encouraging member states to explore the possibility of one-off bank transfers to the Central Bank of Iran. This approach could help the Iranian authorities to receive their oil-related revenues, particularly in case of U.S. sanctions which could target EU entities active in oil transactions with Iran.

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