As U.S. economic sanctions against Iran kicked in again today – a result of Donald Trump’s decision to pull the U.S. out of the Iran nuclear deal in May – the European Union said it is urging its business to continue investing in Iran.
Under the terms of the agreement in 2015 between Iran, the EU and the U.S. under Trump’s predecessor Barack Obama, Iran would halt its development of nuclear weapons in exchange for an end to long-standing sanctions against the Islamic Republic, freeing American and European businesses to do business in Iran again. This has been particularly of interest for the energy sector, given that Iran possesses large reserves.
The Israeli government has been strongly against the deal, fearing that an end to sanctions will jeopardize its ultimate objective or regime change in Iran. Donald Trump has called the deal the worst ever agreed by a U.S. administration.
The EU is trying to keep the deal alive without the U.S., but is facing an uphill struggle as the U.S. threatens to sanction European companies who continue to do business in Iran. "The lifting of nuclear-related sanctions is an essential part of the deal,” the EU joint statement read. The EU foreign ministers vowed to work toward "the preservation and maintenance of effective financial channels with Iran, and the continuation of Iran's export of oil and gas."
The statement also reiterated the EU’s intention of activating a "blocking statute" that would allow EU countries and companies to continue doing business with Iran.
European investment in Iran has exploded since the nuclear deal was agreed two and a half years ago. EU exports to Iran in goods and services totaled €10.8 billion ($12.9 billion) last year, and imports from Iran were worth €10.1 billion.
Last month the EU foreign ministers wrote a letter to US Secretary of State Mike Pompeo saying that persevering with the existing nuclear deal was the "best basis on which to engage Iran”.
Iran and the EU have been working together in the past months to try to find a way to shield European companies from American punishment if they continue investments. The EU has the most to lose from a return to sanctions, as this infographic shows, because American investment in Iran is still very limited.
Dave Keating is an American journalist in Brussels who has been covering EU politics and policy for 12 years, formerly as the editor of EuropeanVoice.com, a side publication of The Economist.