Three European countries and the European Union are seeking exemptions from U.S. sanctions on Iran in a sign that the bloc’s bid to hold the landmark nuclear deal together may be in trouble.
“As allies, we expect that the U.S. will refrain from taking action to harm Europe’s security interests,” the three countries and the EU said in a letter to the U.S. administration. In it, they argued that the agreement with Iran remains the best way to prevent a nuclear-armed Iran and that the 2015 accord can only survive if Tehran receives economic benefits in return.
“U.S. secondary sanctions could prevent the EU from continuing meaningful sanctions relief to Iran,” they said.
The U.S. said May 8 it was pulling out of the nuclear deal, called the Joint Comprehensive Plan of Action, and would start reimposing sanctions on Iran. U.S. officials have warned European companies to wind down their Iranian operations.
The letter was sent by France, Germany, Britain, and the EU, signatories of the landmark 2015 accord where Iran agreed to strict limits and inspections on its nuclear activities in exchange for sanctions relief. The June 4 letter was sent to Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo, and was posted on the Twitter account of French Finance Minister Bruno Le Maire.
The Europeans noted that the International Atomic Energy Agency has reported 11 straight times that Iran is fulfilling its obligations under the accord.
“As close allies we expect that the extraterritorial effects of U.S. secondary sanctions will not be enforced on EU entities and individuals, and that the U.S. will thus respect our political decision and the good faith of economic operators within EU legal territory,” the letter said.
At a summit meeting in Sofia, Bulgaria last month, EU leaders made a rare demonstration of unity in pledging to uphold the nuclear deal, with EU President Donald Tusk saying they needed to stand up to the “capricious assertiveness” of the Trump administration. The EU agreed to begin work to protect European companies negatively affected by the U.S. decision to withdraw and reimpose sanctions, while also addressing concerns about Iran’s ballistic missile program and its wider role in the Middle East.
The letter asks for public confirmation that businesses such as pharmaceuticals and healthcare are exempt from secondary sanctions, and ask the U.S. to grant exemptions for “key sectors” such as energy, automobiles, civil aviation, and infrastructure. It also asks for exemptions to “maintain banking channels and financing channel with Iran.”
Even before the U.S. pulled out of the JCPOA, many European companies faced problems financing their Iranian investments because major banks didn’t want to risk U.S. ire by working in Iran.
Le Maire has said previously that he had “no illusions” about the U.S. exempting Europeans from sanctions.
Some companies aren’t waiting to find out. France’s PSA Group, the maker of Peugeot and Citroen cars, said Monday it’s suspending its push into Iran, and has begun closing its joint ventures with Iranian carmakers. French energy companies Total SA and Engie SA have also said they’d stop some operations in Iran.