France's economy minister Bruno Le Maire urged European nations Friday to defend themselves against US sanctions targeting foreign companies that trade with Iran, as the rift between Washington and its allies deepens.
Le Maire said the European Union had to defend its "economic sovereignty" when it comes to the right to trade with Iran.
Foreign Minister Jean-Yves Le Drian has meanwhile branded the sanctions "unacceptable", in some of the most forceful criticism yet from a key European ally.
US President Donald Trump announced on Tuesday that he was pulling out of the landmark 2015 deal curbing Iran's nuclear programme, reintroducing sanctions on the Islamic republic and those who trade with it.
The decision overturned years of painstaking diplomacy and left EU allies scrambling to save the hard-fought deal, as well as to protect the interests of their companies which do business with Iran.
"We have to work among ourselves in Europe to defend our economic sovereignty," Le Maire told Europe 1 radio ahead of talks with Dutch Finance Minister Wopke Hoekstra.
Le Maire said the EU would hold "collective discussions with the United States to obtain… different rules" covering European companies that do business with Iran.
"At the end of May I will meet with the British and German finance ministers and the three of us will look at what we can do."
Le Maire said he had called US Treasury Secretary Steve Mnuchin on Wednesday urging him to allow exceptions for French companies or a delay in implementing the sanctions, while admitting he has "few illusions" about the likely response.
Washington has given European firms doing business in Iran up to six months to wind up investments or risk US sanctions, and they are also forbidden from signing any new contracts with the country.
– Return of sanctions 'blocking'? –
Le Maire pointed to the possibility of reinstating of EU "blocking regulations", dating back to 1996, which were used as a countermeasure against US sanctions that targeted third countries doing business with Cuba.
The system, which was never actually used, permitted European companies to ignore the US sanctions and said that any decisions by foreign courts based on the sanctions would not be upheld in Europe.
"We want to reinforce this regulation and incorporate the recent decisions taken by the United States," Le Maire said.
"The second avenue is looking at Europe's financial independence — what can we do to give Europe more financial tools allowing it to be independent from the United States?"
Le Maire further noted that the US Treasury has an agency, the Office of Foreign Assets Control, which tracks whether or not foreign companies are respecting its sanctions.
"Why don't we create the same type of agency in Europe, capable of following the activities of foreign companies and checking if they are respecting European decisions?" he said.
Le Drian had on Thursday insisted Washington needed to negotiate with its European allies on any sanctions that might affect their companies.
"We feel that the extraterritoriality of their sanction measures is unacceptable," he told Le Parisien newspaper, vowing that European countries would "do everything to protect the interests of their companies".
"The Europeans should not have to pay for the withdrawal of an agreement by the United States, to which they had themselves contributed."
Which European firms stand to lose from US Iran sanctions
Paris (AFP) May 11, 2018 –
US President Donald Trump's decision to quit the landmark nuclear deal with Iran is expected to see European economic heavyweights including Germany and France pay a hefty price.
European businesses rushed to invest in Iran following the 2015 agreement, from which the US president announced his country's exit on Tuesday.
Fresh sanctions on Iran will hinder foreign businesses from operating there, with European enterprises risking US sanctions should they fail to wind up investments within six months.
Here is who could stand to lose from the sanctions:
– Germany: The biggest loser? –
Germany, the top European exporter to Iran, has seen a surge in financial activity in the Islamic Republic since the Joint Comprehensive Plan of Action (JCPOA) was sealed in Vienna in April 2015.
In 2016, Germany delivered 2.57 billion euros ($3.06 billion) worth of goods to the country. The following year, German exports jumped to 2.97 billion euros, a 15.5 percent year-on-year increase.
Berlin's exports include machinery, pharmaceutical products and foods. Iran's exports to Germany meanwhile amounted to 314 million euros in 2016 and 410 million euros in 2017.
Industrial giant Siemens, which first began operating in Iran in 1868, returned in March 2016, teaming up with local group Mapna to build gas turbines and generators for power plants.
Siemens has since signed a contract for 12 compressors for two natural gas processing plants.
Mercedes-Benz maker Daimler signed a deal in 2016 with two Iranian companies to produce and market trucks.
– France: Big in Iran –
French exports soared from 562 million euros in 2015 to 1.5 billion in 2017, close to the sum seen prior to the reinforced sanctions against Iran.
French imports from Iran in 2017 surged to 2.3 billion euros, the highest number since 2008.
French oil giant Total has struck up a partnership with Chinese conglomerate CNPC, pledging to invest $5 billion in the South Pars gas field. However, Total has only invested $100 million in the project so far, according to a source close to the deal.
French carmaker PSA, which holds a whopping 30 percent market share in Iran, in 2017 announced a distribution deal with Iranian vehicle company DS. Renault also sells cars in the Islamic Republic.
– Italy exports rising –
Italian exports to Iran increased by 30 percent in 2016 from the prior year to more than 1.5 billion euros. Last year exports surged another 12.5 percent to 1.7 billion euros.
In January, the Italian government signed a credit agreement worth 5.0 billion euros to support Italian investments in Iran.
Rail giant Ferrovie Dello Stato Italiane has agreed to build two high-speed rail lines in the country. Shipmaker Fincantieri has also sealed multiple deals with Iran since the nuclear agreement was reached.
– Britain: Much ado about nothing? –
While Britain has urged the United States not to undermine the nuclear deal, few major British companies actually operate in Iran.
British energy giant BP, whose roots lie in the Anglo-Persian Oil Company founded in the early 20th century, currently has no operations in Iran.
Anglo-Dutch group Royal Dutch Shell in 2016 signed contracts to explore the possibility of investing in Iran's oil and gas fields, but has yet to start.
According to Allie Renison of the Institue of Directors, British companies do however have major contracts in Iran's infrastructure, solar power, engineering and healthcare sectors.
– Airbus weighed down –
European aviation giant Airbus has announced contracts with Iran Air Tour and Zagros Airlines for 100 planes in all, including the new A320neo, for the sum of $10 billion.
