European Union considers little-used statute to block U.S. sanctions over Iran

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But companies around the world which invested in Iran after sanctions were lifted are now faced with a hard choice as Washington has threatened to punish firms that violate US sanctions by dealing with Tehran.

On Friday morning the European Commission, the EU's executive arm, will begin putting a so-called blocking statute in place to shield European companies doing business with Iran from USA sanctions.

Following the lifting of sanctions imposed on Iran in 2016 caused by the implementation of Joint Comprehensive Plan of Action (JCPOA), many European companies flocked to Iran for clinching several billion-euro worth of deal and seized this opportunity to play an active role in Iran's energy sector, he concluded.

As long as the Iranians respect their commitments, the EU will of course stick to the agreement of which it was an architect - an agreement that was unanimously ratified by the United Nations Security Council and which is essential for preserving peace in the region and the world,"said the President of the European Commission, Jean-Claude Juncker".

In a statement, the Commission said it had "launched the formal procedure to activate the "Blocking Statute" by updating the list of U.S. sanctions against Iran falling within its scope".

"The EU blocking regulation could be of limited effectiveness there, given the worldwide nature of banking system and especially the exposure of large systemic banks to USA financial system and US dollar transactions", he said.

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The measure represents the first practical step towards saving the Iran nuclear deal taken by the EU.

During their meeting with their Iranian counterpart Mohammed Javad Zarif earlier this week, European Union foreign ministers discussed how best to keep the nuclear agreement alive without the US.

The Commission also urged national governments to make one-off transfers to Iran's central bank to pay for oil before USA sanctions on transactions take effect.

It said the move will "allow the EIB to support European Union investment in Iran", particularly involving small and medium-sized companies. Commissioner for Climate Action and Energy Miguel Arias Canete will travel to Tehran this weekend.

Additional efforts will encourage European companies to pay money to Iran through transfers with the Central Bank of Iran, and will mobilise financial assistance through the Development Co-operation or Partnership Instrument, to increase ongoing sectoral co-operation.

The US Treasury has said it is giving European companies three to six months to wind down their business in Iran or face sanctions as well.

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