President Trump’s administration will refuse to exempt European allies from the new sanctions limiting targeting economic investment in Iran, Cabinet officials notified world leaders.
“We will seek to provide unprecedented financial pressure on the Iranian regime,” Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo wrote to the allies, per NBC News.
That’s consistent with the Iran policy that Pompeo outlined after President Trump decided to exit the 2015 nuclear deal. British, French, and German officials have sought to soften the blow of the American departure, arguing that the Joint Comprehensive Plan of Action has defused a nuclear crisis in the region. But Trump’s decision to renew sanctions on Iran jeopardizes any European companies that cooperate with blacklisted Iranian entities.
“[A]s close allies we expect that the extraterritorial effects of U.S. secondary sanctions will not be enforced on EU entities and individuals, and the United States will thus respect our political decision and the good faith of economic operators within EU legal territory,” the top diplomats from each of the allied nations wrote in a June 4 letter.
State Department officials warned Europe to brace for a refusal in recent meetings. “We have been clear with countries and companies around the world that we are bringing severe economic pressure on Iran until the regime changes its destabilizing policies,” Brian Hook, the director of policy planning at Foggy Bottom, told reporters in a July 2 briefing.
He allowed that some countries may be exempted if they “are reducing their imports,” but that would be a rare development.
“We are not looking to grant licenses or waivers, because doing so would substantially reduce pressure on Iran,” Hook said. “And this is a campaign of imposing pressure. And so we are not looking to grant licenses or waivers broadly on the re-imposition of sanctions, because we believe pressure is critical to achieve our national security objectives.”
European officials have limited ability to defy U.S. sanctions, despite their opposition to the policies, because they can’t facilitate the financial transactions between European companies and Iranian banks.
“They cannot be paid because there is no sovereign and autonomous European financial institution [that can protect them from sanctions],” French Finance Minister Bruno Le Maire told BFM television in June.
