The European Union is insisting that Iran must continue to receive the economic benefits anticipated under the 2015 nuclear deal even after President Trump decided to withdraw the United States from the pact and reimpose its own sanctions against Iran.
“The lifting of nuclear-related sanctions is an essential part of the agreement,” Federica Mogherini, the EU’s top diplomat, said Wednesday. “The EU has repeatedly stressed that the sanctions lifting has a positive impact on trade and economic relations with Iran. The EU stresses its commitment to ensuring that this can continue to be delivered.”
[FULL REMARKS: Trump’s announcement withdrawing from the Iran nuclear deal]
That’s a direct repudiation of Trump’s decision to renew all U.S. sanctions on Iran, after American and European negotiators failed to agree on a plan to stiffen the Western posture towards the regime’s nuclear weapons and ballistic missile programs. Trump’s decision requires international entities to begin winding down their investment in Iran or risk being locked out of the U.S. economy, a policy that puts the United States and European allies on a collision course.
“As long as Iran continues to implement its nuclear-related commitments,” Mogherini said, “the EU will remain committed to the continued full and effective implementation of the nuclear deal.”
Trump issued a blunt threat Tuesday. “We will be instituting the highest level of economic sanction,” he said. “Any nation that helps Iran in its quest for nuclear weapons could also be strongly sanctioned by the United States.”
That pledge is likely to be a subject of intense discussion between American and European officials over the summer. Foreign companies have 90 or 180 days to wrap up their operations before the various sanctions might be applied to them, depending on their relationship with Iran. U.S. diplomats hope they won’t have to use them.
“We had to use those secondary sanctions very, very rarely,” a senior State Department official told reporters Tuesday evening. “The leverage that we gained from the secondary sanctions is what we used throughout the world with engagement to get countries to partner with us to build the economic isolation of Iran. That’s what we want to do again. It’s not about sanctioning foreign companies; it’s about using the leverage and engaging the way we did before.”
The threat of American sanctions has deterred many foreign banks and companies from working in Iran, but European allies could issue regulations designed to shelter their companies from U.S. punishment. “We are looking at a number of possibilities,” Denis Chaibi, a senior EU diplomat, said in February. “It is not complicated to do it legally in that the legal instrument exists, but it doesn’t require a huge internal debate.”
Proponents of Trump’s withdrawal think the Europeans are in a weak position to defy U.S. sanctions.
“Blocking regulations might shield a company from American-levied fines, but they cannot shield a British bank from losing its access to the U.S. financial system,” Richard Goldberg, a senior fellow at the Foundation for Defense of Democracies, wrote in February. “This time around, the downside of U.S. sanctions would far outweigh the upside of Iranian trade.”
