The European Union has announced a new regulation aimed at shielding European companies from the impact of US sanctions on Iran. The measure, which has been greeted with skepticism by the European business media, is unlikely to succeed: it expects European companies to risk their business interests in the US market for interests in the much smaller Iranian market.
The so-called “Blocking Statute” entered into effect on August 7, the same day that the first round of US sanctions on Iran officially snapped back into place. Those sanctions target Iran’s purchases of US dollars — the main currency for international financial transactions and oil purchases — as well as the auto, civil aviation, coal, industrial software and metals sectors. A second, much stronger round of sanctions targeting Iran’s oil exports, takes effect on November 5.
The action follows up on President Donald J. Trump’s decision on May 8 to withdraw from the 2015 Joint Comprehensive Plan of Action (JCPOA, also known as the Iran Nuclear Deal) negotiated by the Obama administration, which lifted sanctions on Iran in exchange for a freeze on its nuclear program.
The Trump administration said that the deal negotiated by the Obama administration did not go far enough to curtail Iran’s nuclear weapons program, or its ballistic missile program, or its malign behavior in the Middle East and elsewhere.