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EU to activate statute to shield firms from US sanctions against Iran

Xinhua | Updated: 2018-05-18 18:31
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BRUSSELS - The European Commission on Friday proposed activation of a dormant statute to shield European firms doing business with Iran from renewed US sanctions.

The 1996 Blocking Statute forbids EU companies from complying with the US sanctions.

The statute was originally introduced in response to US trade embargo on Cuba and sanctions against Iran and Libya. It was never enacted as the transatlantic disagreements were ironed out politically.

The Commission also proposed 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."

In other words, the EIB will be allowed to support EU investment in Iran.

The European Parliament and the Council of the EU will decide to approve or reject the proposals within two months, ahead of the first batch of US sanctions taking effect on Aug 6.

The two proposals are the core parts of the Commission's decision to act on four fronts in the face of looming US sanctions.

The Commission vowed to "continue and strengthen the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector," which is essential to the Iranian economy.

It remains to be seen whether the words will dispel concerns haunting European energy giants like Total, which on Wednesday said it might not be able to continue its gas development project in Iran unless it gets a waiver from the US to protect it from re-imposed sanctions.

To weave through the US-dominated international banking system, the Commission said it is encouraging member states to explore the possibility of one-off bank transfers to the Central Bank of Iran.

This approach "could help Iranian authorities to receive their oil-related revenues, particularly in case of US sanctions which could target EU entities active in oil transactions with Iran," the Commission noted.

The moves came on the heels of the EU-Western Balkans summit in Sofia, Bulgaria, during which leaders of member states thrashed out a united front against Washington.

US President Donald Trump declared last week that the United States would withdraw from the Iran nuclear deal, claiming that it had failed to prevent Iran from developing nuclear weapons or supporting terrorism in the region.

US Treasury Secretary Steven Mnuchin said in an announcement that "sanctions will be re-imposed subject to certain 90-day and 180-day wind-down periods."

Much to Europe's displeasure, foreign companies doing business with Iran are also in the crosshairs of the US sanctions.

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