A senior fellow at the Gatestone Institute and analyst of international politics is suggesting that the European Union’s work-around of the U.S. sanctions against Iran simply is “unworkable.”
Those sanctions hit just this week, and are in response to the rogue Islamic regime’s continued work toward having a nuclear arsenal.
U.S. President Donald Trump withdrew the U.S. from the multi-party Iran nuclear agreement months ago because it was not accomplishing its goal, of halting Iran’s nuclear development.
As part of that, he announced that the sanctions that Barack Obama dropped would be resurrected, and they have already started.
Senior Fellow Soeren Kern at Gatestone noted that the EU announced a “new regulation” that is intended to shield European companies from Trump’s promise that those who deal with Iran will not be allowed to deal with the U.S.
“The so-called ‘Blocking Statute’ entered into effect on August 7, the same day that the first round of U.S. sanctions on Iran officially snapped back into place. Those sanctions target Iran’s purchases of U.S. 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,” Kern explained.
“The reimposed U.S. sanctions apply not only to American citizens and companies, but also to non-American individuals and companies. In a legal concept known as extraterritoriality, any company based outside of the United States must comply with American sanctions if it uses dollars for its transactions, has a subsidiary in America or is controlled by Americans,” he wrote.
Trump made clear he intends there to be repercussions.
“The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States,” he said.
But EU foreign policy chief Federica Mogherini vowed to protect European companies from U.S. penalties.
A Blocking Statute states that EU economic operators may recover damages arising from the extra-territorial “sanctions within its scope from the persons causing them and nullifies the effect in the EU of any foreign court rulings based on them.”
“In other words, the EU is prohibiting EU citizens and companies from complying with U.S. sanctions and is authorizing EU companies hit by U.S. sanctions to sue the U.S. government for compensation in European courts,” he explained.
But he describes the strategy as “unworkable.”
The London-based Financial Times, he noted, wrote: “Diplomats and lawyers have raised serious doubts about the EU’s ability to protect European businesses operating in Iran from the U.S. measures.”
The commentary points out the statute rarely has been tested.
And L’Express pointed out that the deal may protect a company’s operations in Europe, but not the United States.
“Suffice to say that the implementation of this blocking law remains very hypothetical, as it goes into uncertain legal territories,” he wrote.
Some companies, Total, Maersk, Peugeot, Daimler and others, already have announced plans to withdraw from Iran projects.
Samuel Jackisch of the public broadcaster ARD in Germany concluded, “The EU can try to turn the tables on transatlantic relations, but in the end the U.S. still comes out on top.”
He continued, “The German export industry’s business with Iran may not be small at around three billion euros. However, the bottom line is that the same companies export 35 times as much to the USA. The EU is demanding that its largest corporations risk the entire cake for a few more crumbs.”
One investment banker told Reuters: “It would be suicide to do any new business or funding for Iran or Iran-related companies without explicit guarantees from the U.S. government. They have us by the throat because so much business is conducted and cleared in dollars. The fines are in the multibillions these days so it’s just not worth the risk for a small piece of business and maybe pleasing a European government.”