Paris/Vienna/Brussels/Dubai: The European Union asked for exemptions from expected US sanctions on Iran and the bloc’s lending arm balked at supporting Iranian projects, signs of the mounting difficulties in meeting a political pledge to stick with the landmark nuclear deal after President Donald Trump quit the accord.

The troubles emerged as a senior Iranian envoy demanded results from EU negotiations “very soon” and said a failure to provide economic guarantees would result in the resumption of Tehran’s nuclear activities. That threat quickly drew warnings from the US.

France, Germany, Britain and the EU as a whole are seeking a sanctions reprieve from Washington a month after Trump withdrew from the nuclear pact and vowed to sanction companies doing business with Iran, which holds the world’s second-biggest natural gas reserves. The EU has pledged to defend the agreement, protect European companies negatively affected by the US decision and offer alternate financing for Iranian investments.

“As allies, we expect that the U.S. will refrain from taking action to harm Europe’s security interests,” the three countries and the EU said in a letter to the US administration. In it, they argued that the accord with Iran remains the best way to prevent a nuclear-armed Iran and that the 2015 accord can only survive if Tehran receives economic benefits in return.

“U.S. secondary sanctions could prevent the EU from continuing meaningful sanctions relief to Iran,” they said.

In a sign of internal EU conflict, the bloc’s executive arm proposed on Wednesday that the European Investment Bank expand its lending remit to cover Iran, a plan EIB president Werner Hoyer immediately rejected as being risky and unwise.

The European Commission idea to let the EIB support Iranian projects could hamper the lender because around 30% of its €500 billion ($589 billion) in outstanding debt is denominated in dollars, said Hoyer.

“With this lever, the U.S. administration might have the tool to threaten the business model of the bank,” Hoyer said by phone from Luxembourg, where the EIB is based. “We are a capital markets-based institution, which differentiates us from all other EU institutions.”

He said the bloc’s national governments, which own the EIB, will likely heed its advice against lending for Iranian projects and urged the bloc to come up with “more intelligent” ways to keep the nuclear accord intact.

“We are not the right tool,” said Hoyer, who called the Iran deal one of the EU’s “major and finest” diplomatic achievements.

The letter from the EU countries was sent on 4 June to treasury secretary Steven Mnuchin and secretary of state Mike Pompeo, and was posted on the Twitter account of French finance minister Bruno Le Maire.

“As close allies we expect that the extraterritorial effects of U.S. secondary sanctions will not be enforced on EU entities and individuals, and that the U.S. will thus respect our political decision and the good faith of economic operators within EU legal territory,” the letter said.

Even before the US pulled out of the JCPOA, many European companies faced problems financing their Iranian investments because major banks didn’t want to risk US ire by working in Iran.

Some companies aren’t waiting to find out. France’s PSA Group, the maker of Peugeot and Citroen cars, said Monday it’s suspending its push into Iran, and has begun closing its joint ventures with Iranian carmakers. French energy companies Total SA and Engie SA have also said they’d stop some operations in Iran.

The window for the EU to convince Tehran to stay in the deal is quickly narrowing. Iran’s International Atomic Energy Agency (IAEA) ambassador, Reza Najafi, said on Wednesday in Vienna that he expects results from negotiations with the EU soon. The Persian Gulf country told inspectors they’re preparing uranium-enrichment feedstock and facilities to produce new centrifuges if the talks intended to save the Joint Comprehensive Plan of Action fail.

“They need to ensure that Iran is compensated unconditionally,” according to Najafi, who said Iran received “strong support from the overwhelming majority” of the 35 IAEA members meeting this week in the Austrian capital.

Until measures are worked out, IAEA inspectors shouldn’t count on any additional cooperation by Iran, Najafi said. The agency’s director general Yukiya Amano said on Monday that Tehran could do even more to facilitate verification, even after monitors called a record number of snap visits last year.

“As long as Iran isn’t benefiting from the deal, nobody should expect Iran to implement even more voluntary measures,” the envoy said. The IAEA reported for an 11th time this week that Iran has kept it’s side of the bargain by keeping its nuclear activities below allowable thresholds.

On Wednesday, Iran’s state television aired a live interview with Ali Akbar Salehi, head of Iran’s Atomic Energy Organization, from a centrifuge assembly center at the Natanz facility. Salehi, dressed in a white coat, spoke of Iran’s nuclear program and efforts to develop the technology as a pride-inducing project and an investment that had cost the nations some $6 billion over three decades.

Salehi said that his nation was working on developing the assembly center, which could if needed host newer, more efficient centrifuges. He reiterated that Iran would for the time being respect all limitations imposed by the nuclear accord. “We hope not to see a day’ when the nuclear deal falls apart, Salehi said.

Comments about boosting enrichment capacity prompted US secretary of state Mike Pompeo to issue a warning on Wednesday.

“We’re watching reports that #Iran plans to increase its enrichment capacity,” Pompeo wrote on Twitter. “We won’t allow Iran to develop a nuclear weapon. Iran is aware of our resolve.” </s> Senior diplomats from Iran and five world powers are meeting in Vienna on May 25 to try to prevent the 2015 nuclear deal from collapsing after the United States pulled out of the agreement and reinstated sanctions against Iran this month.

Iranian leaders have said they will uphold their side of the deal, which involves strict curbs on their nuclear program, if Britain, France, Germany, Russia, and China uphold theirs by making sure that Iran can keep doing business with the world, despite the revived U.S. sanctions.

"It won't be easy, but we'll try," Iranian Deputy Foreign Minister Abbas Araqchi said ahead of the talks.

Iranian ministers are under orders from Supreme Leader Ayatollah Ali Khamenei to seek guarantees from the Europeans for Iranian oil sales and trade, as well as their agreement to spurn U.S. efforts to negotiate a stronger and broader deal with Tehran.

Khamenei laid out a series of conditions on May 23 that he said must be met for Iran to stay in the deal.

The European powers are expected to highlight EU efforts to legally shield European companies that have established ties with Iran from the U.S. sanctions so they can continue doing business in Iran.

Diplomats said the European Union is trying to make sure that such businesses are not affected in particular by U.S. sanctions prohibiting Iran from using the U.S. dollar or U.S. financial institutions to transact business.

Iranian officials are expected to carefully scrutinize the package of measures EU officials have cobbled together to try to counter the U.S. sanctions.

Some European officials have been openly skeptical that the measures will be effective in keeping businesses from fleeing Iran. Several major corporations, including France's Total and Germany's Allianz, already have announced they are leaving unless they receive exemptions from the U.S. sanctions.

"I think this is a moment of truth for the Europeans," EU chief diplomat Federica Mogherini said this week.

The meeting of foreign ministers is the first since U.S. President Donald Trump on May 8 abandoned the deal, formally named the Joint Comprehensive Plan of Action (JCPOA), which originally provided near-universal sanctions relief in exchange for curbs on Iran's nuclear activities.

In pullng out, Trump argued that the agreement would not stop Iran from eventually developing atomic warheads, and that it did nothing to check Iran's ballistic missile program or its involvement in regional conflicts in Yemen and Syria.

European and Russian leaders say the deal has accomplished its goal of preventing Iran from developing nuclear weapons while contributing to stability in the Middle East.

With reporting by dpa and Reuters </s> EU says encouraging trade with Iran is crucial to nuke deal

WELLINGTON, New Zealand (AP) — The European Union foreign policy chief Federica Mogherini says the EU is encouraging enterprises to increase their business with Iran, as that country has been compliant with their nuclear-related commitments.

Mogherini told reporters Tuesday during her trip to Wellington, New Zealand, that it's up to Europeans to decide who they want to trade with.

"We are doing our best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran because we believe this is in the security interests of not only our region, but also of the world. If there is one piece of international agreements on nuclear non-proliferation that is delivering, it has to be maintained," Mogherini said.

The United States reimposed stiff economic sanctions on Iran on Monday, ratcheting up pressure on the Islamic Republic despite statements of deep dismay from European allies, three months after President Donald Trump pulled the U.S. out of the international accord limiting Iran's nuclear activities.

Trump declared the landmark 2015 agreement had been "horrible," leaving the Iranian government flush with cash to fuel conflict in the Middle East.

Iran accused the U.S. of reneging on the nuclear agreement, signed by the Obama administration, and of causing recent Iranian economic unrest.

European allies said they "deeply regret" the U.S. action.

Trump said in a statement, "We urge all nations to take such steps to make clear that the Iranian regime faces a choice: either change its threatening, destabilizing behavior and reintegrate with the global economy, or continue down a path of economic isolation."

A first set of reimposed U.S. sanctions affect financial transactions that involve U.S. dollars, Iran's automotive sector, the purchase of commercial planes and metals including gold.

A second batch of U.S sanctions targeting Iran's oil sector and central bank are to be reimposed in early November.

Trump warned that those who don't wind down their economic ties to Iran "risk severe consequences."

European ministers said the Iran deal was crucial for Europe's and the world's security, and the European Union issued a "blocking statute" Monday to protect European businesses from the impact of the sanctions.

Mogherini, speaking at a news conference alongside New Zealand Foreign Minister Winston Peters, said the EU and New Zealand saw the need to maintain the nuclear deal with Iran, notwithstanding the U.S. withdrawal, and that she and Peters had discussed in detail how to keep open trade and financial channels with Iran.

"We are encouraging small and medium enterprises in particular to increase business with and in Iran as part of something (that) for us is a security priority," Mogherini said, explaining that trade is an integral part of the nuclear deal.

Trade between Iran and the EU "is a fundamental aspect of the Iranian right to have an economic advantage in exchange for what they have done so far, which is being compliant with all their nuclear-related commitments," Mogherini said. </s> VIENNA (Reuters) - Major powers and Iran agreed on Friday to move quickly to offset the U.S. pullout from its nuclear deal and Washington’s renewed sanctions, with Tehran pressuring Europe to come up with a package of economic measures by May 31.

Iran's Foreign Minister Mohammad Javad Zarif arrives at the EU council in Brussels, Belgium May 15, 2018. REUTERS/Yves Herman

The 2015 agreement between Iran and world powers lifted international sanctions on Tehran. In return, Iran agreed to restrictions on its nuclear activities, increasing the time it would need to produce an atom bomb if it chose to do so.

Since President Donald Trump withdrew the United States this month, calling the agreement deeply flawed, European states have been scrambling to ensure Iran gets enough economic benefits to persuade it to stay in the deal.

But this has proven difficult, with many European firms alarmed at the specter of far-reaching U.S. financial penalties.

Nations that remain in the deal - Britain, China, France, Germany and Russia - held a formal meeting on Friday without the United States for the first time since Trump’s announcement, but diplomats saw limited scope for salvaging the agreement.

“For the time being we are negotiating... to see if they can provide us with a package which can actually give Iran the benefits of sanctions-lifting and then the next step is to find guarantees for that package,” Iran’s Deputy Foreign Minister Abbas Araqchi told reporters after the meeting.

The talks between senior officials aimed at fleshing out the package of measures to keep oil and investments flowing.

Those measures include banning EU-based firms from complying with the reimposed U.S. sanctions, urging governments to make transfers to Iran’s central bank to avoid fines and creating alternative financing channels.

“We expect the (economic) package to be given to us by the end of May,” a senior Iranian official said earlier, adding that Tehran was “weeks” away from deciding whether to quit the pact.

European measures would need to ensure that oil exports did not halt, and that Iran would still have access to the SWIFT international bank payments messaging system, he said.

A senior EU official said the participants had stressed on Friday that the package would not be immediate.

“We made it very clear today that there are things that will take more time,” the official said.

Foreign ministers of the remaining countries will meet in the coming weeks.

COLD SHOWER

Washington has not only reimposed sanctions but started to make them even tighter. U.S. Secretary of State Mike Pompeo threatened Iran on Monday with “the strongest sanctions in history” if it did not change its behavior in the Middle East.

“Pompeo was like taking a cold shower,” said a European diplomat. “We’ll try to cling to the deal, but... we’re under no illusions.”

Iranian Supreme Leader Ayatollah Ali Khamenei set out conditions on Wednesday for Iran to stay in the deal: unless Europe guarantees Iran’s oil sales will not suffer, Tehran would resume enrichment activities that are currently prohibited. The deal lets Iran enrich but under tight restrictions.

“We were very clear we can’t give guarantees but we can create the necessary conditions for the Iranians to keep benefiting from the sanctions-lifting under the JCPOA (the nuclear deal) and to protect our interests and continue to develop legitimate business with Iran,” the EU official said.

Iran has so far benefited less from the accord than it had initially hoped, partly because of remaining U.S. sanctions that have deterred major Western investors from doing business with Tehran. Some Western companies have already quit Iran or said they may have to leave because of the new U.S. sanctions.

Trump denounced the accord, completed under his predecessor Barack Obama, because it did not cover Iran’s ballistic missile program or its role in Middle East wars, or address the issue of what happens after the deal begins to expire in 2025.

Khamenei rejected any new negotiations over Iran’s ballistic missile program or its regional activities.

European nations share some U.S. concerns but say that torpedoing the nuclear deal makes it far harder to address them. They have said that as long as Tehran meets its commitments, they will stick to the deal.

The U.N. nuclear watchdog, which polices the pact, says Iran continues to comply with its terms.. </s> The commander of the Islamic Revolutionary Guard Corps (IRGC) has slammed the address made by US Secretary of State Mike Pompeo and "anyone who backs" Washington, saying that the Iranian people would deliver a "strong punch to the mouth" of the American official.

"The people of Iran should stand united in the face of this," Ismail Kowsari, the deputy commander of the Sarollah Revolutionary Guards base in Tehran added, as quoted by the Iranian Labour News Agency.

The statement comes a day after Pompeo delivered a speech dubbed "After the Deal: A New Iran Strategy," in which he promised that the US would apply unprecedented financial pressure on Tehran via "strongest in history" sanctions. While stating that Washington won't renegotiate the historic Iran nuclear deal, he also outlined 12 demands for Tehran, including the withdrawal of forces from Syria.

The Islamic Republic has slammed the address, with Iranian President Hassan Rouhani saying that the world cannot accept that Washington makes unilateral decisions for all nations.

READ MORE: Israeli PM Praises Pompeo's Iran Speech as 'Policy That Can Guarantee Security'

In its turn, the EU, which has been one of the brokers of the 2015 nuclear agreement, has also criticized the move: "Secretary Pompeo's speech has not demonstrated how walking away from the JCPOA (nuclear deal) has made or will make the region safer from the threat of nuclear proliferation or how it puts us in a better position to influence Iran's conduct in areas outside the scope of JCPOA."

The US relations with its major EU allies — namely Germany, France and Britain — members of the P5+1 group that reached the nuclear accord, have significantly deteriorated due to President Donald Trump's decision on the withdrawal from the accord, which he has long been as the "worst deal in history."

According to German media reports, the EU, Germany, France and Britain have invited Russia and China to discuss the future of the Iranian nuclear deal in Vienna, with the US representatives being sidelined from the upcoming meeting. </s> Hard-line lawmakers celebrated President Donald Trump's announcement to pull the US out of the Iran deal - a decision that will mostly help them win the sympathies of the Iranian people - by burning a US flag while shouting "Death to America!" in Parliament, the Telegraph reported.

They also burned a piece of paper representing the nuclear deal (despite Iranian President Hassan Rouhani declaring during his rebuttal to Trump that Iran would seek further cooperation with its European partners and China, but barring that would begin enriching uranium "in the next weeks") and stomped on the paper's ashes.

Rouhani dispatched his foreign minister, Javad Zarif, to begin negotiating with the countries still in the deal - a group that includes, France, the UK, Germany, Russia and China. Even so, Rouhani stressed that he could restart the country's centrifuges at any time.

"So if necessary, we can begin our industrial enrichment without any limitations," the Iranian leader said. "Until implementation of this decision, we will wait for some weeks and will talk with our friends and allies and other signatories of the nuclear deal, who signed it and who will remain loyal to it. Everything depends on our national interests."

After the flag burning demonstration, Parliament Speaker Ali Larijani said responsibility for saving the accord now falls to the European Union.

"The period is only a window in which the EU can prove if it has enough weight for settling down international issues or not?" he said. Larijani also urged the country's nuclear program to prepare for "resumption of all aspects of nuclear activities."

All of the remaining signatories to the deal expressed their disappointment with the US decision.

On Wednesday, China vowed to "safeguard" the agreement.

Sergei Lavrov, Russia's acting foreign minister, said Russia remained committed to the deal.

Meanwhile, Saudi Arabia and other members of the Gulf Cooperation Council basked in what they see as an immense political victory over their regional rival, Tehran.

Saudi Arabia, the United Arab Emirates and Bahrain swiftly backed U.S. President Donald Trump's decision to reimpose sanctions on Tehran, reflecting their concern about Iran's ballistic missile programme and support for militant groups. "Paris and London may not like Trump’s decision, but how would the French or British feel if their capital cities came under direct threat by the Iranians?" Faisal Abbas wrote in Saudi Arabia's English-language Arab News daily next to a headline that read: "The deal is dead."

Many observers said that, while harsh criticism of the US has been a staple of Iranian politics for years, it was the first time anybody could remember something being burned inside the Parliament building.

The demonstration reflects broad public anger in Iran following Trump's decision, which effectively puts an end to the 2015 Joint Comprehensive Plan of Action, otherwise known as the Iran deal (although as noted earlier, there are many unknowns on just how the unwind will take place). While Iranian officials, including the parliament speaker, say they hope Europe will work with them to preserve the deal, many are pessimistic.

The lawmakers, including a Shiite cleric, held the flaming flag alight as their colleagues joined their chants.

While US flag-burning is common in Iran and harsh criticism of America has been a staple of Iranian parliamentary politics for years, it was the first time political observers could remember anything being burned inside the parliament itself. </s> LONDON — European firms that stop doing business with Iran because of reimposed U.S. sanctions could in turn be sanctioned by the E.U., a special adviser to the 28-country bloc’s top diplomat has warned.

“If E.U. companies abide by U.S. secondary sanctions they will, in turn, be sanctioned by the E.U.,” Nathalie Tocci, an aide to E.U. foreign policy chief Federica Mogherini, told Britain’s BBC Radio 4 on Monday night.

She characterized the measures as an attempt to “protect European companies.”

Tocci said the move was “necessary in order to signal, diplomatically, to the Iranians that Europeans are serious” about trying to salvage the Iran nuclear deal.

Hours earlier, the U.S. announced it was reintroducing sanctions on the Islamic republic.

The Trump administration’s decision to walk away from the landmark 2015 Iran pact signed by the five permanent members of the U.N. Security Council — the U.S., Russia, France, China and the U.K. — as well as Germany and the European Union, dismayed and angered longtime U.S. allies and vital trading partners.

German Chancellor Angela Merkel, French President Emmanuel Macron and British Foreign Secretary Boris Johnson traveled to the U.S. aiming to convince President Donald Trump not to ditch the deal, saying it was working and the only way to halt a regional arms race.

Nevertheless, Trump went ahead and announced on May 8 that the U.S. was withdrawing from what he called the “decaying and rotten” agreement.

Mogherini told reporters Tuesday that the E.U. was doing its “best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran.”

Tocci, the adviser, conceded that potential E.U. sanctions as part of the so-called blocking statute that came into effect on Tuesday were “politically and symbolically” an important step. The European measures are aimed at allowing firms to recover damages from bodies that enforce American sanctions, and ban companies from complying with the sanctions without E.U. permission.

In 2016, the European Union exported more than 8.2 billion euros ($9.7 billion) worth of goods to Iran, while importing almost 5.5 billion euros ($6.5 billion) from there, according to the European Commission. This is dwarfed by the $1.1 trillion the E.U.-U.S. trade represented in the same year.

Virtually all multinational firms do business or banking in the U.S., leaving European companies vulnerable to American sanctions punishing those operating in and with Iran.

Trump doubled down on his stance on Iran early Tuesday.

At midnight Monday, the U.S. began targeting oil-rich Iran’s automotive industry and civil aviation sector, as well as trade in gold and other metals in a set of punitive measures that had been eased under Trump’s predecessor, Barack Obama.

Trump has called for a wholesale overhaul of Iranian regional policies, such as an end to its military support for the Syrian government and regional militant groups like Lebanon’s Hezbollah. The 2015 pact did not curb these actions, one reason Trump has called the agreement “the worst deal ever.”

International inspectors say Iran has been complying with the deal to curtail its nuclear program.

The U.S. is preparing to reimpose the remainder of sanctions lifted as part of the agreement, and target Iran’s oil sector and central bank in early November.

America has also pressured allies to stop importing oil from Iran before the November deadline. Top buyers of Iranian oil include China, India, Turkey and South Korea.

The effects on Iran of Washington’s hardening stance have been stark, with Iran’s rial currency losing two-thirds of its value in six months.

Within hours of the White House announcement on Monday, international firms announced steps to avoid U.S. sanctions.

On Tuesday, German car manufacturing giant Daimler said it had suspended its activities in Iran.

“We will continue to closely monitor the political developments, especially in connection with the future of the nuclear agreement,” the company said in a statement.

Daimler’s announcement came after U.S. Ambassador to Germany Richard Grenell in May warned that firms that continued to do business in Iran would face consequences.

“U.S. sanctions will target critical sectors of Iran’s economy. German companies doing business in Iran should wind down operations immediately,” he tweeted.

In June, auto manufacturer PSA — which makes Peugeot vehicles — began taking steps to suspend its joint-venture activities in Iran while rival Renault has said it will adhere to the U.S. sanctions.

French oil giant Total has said it would quit a multibillion-dollar gas project if it cannot secure a waiver from the sanctions — a request the French government says had been rejected.

F. Brinley Bruton reported from London, and Andy Eckardt and Carlo Angerer from Mainz, Germany. </s> Iranian President Hassan Rouhani met with his Chinese counterpart President Xi Jinping early on Sunday.

The two top officials met on the sidelines of the two-day Shanghai Cooperation Organization (SCO) summit in the Chinese port city of Qingdao.

The two top executives highlighted the strengthening of bilateral ties and developing economic and political cooperation between Tehran and Beijing.

The two also exchanged views on issues of mutual interests and the avenues of bilateral cooperation as well as the case of the JCPOA- AKA the Iran nuclear deal- which both Iran and China are signatory states of.

After US President Donald Trump unilaterally withdrew from the agreement on May 6, all heads of states of signatory states but US has reassured Tehran that they will remain committed to the landmark agreement of July 14, 2015.

Prior to meeting with Chinese President Xi Jinping, President Rouhani held one-on-one meetings with Mongolian President Khaltmaagiin Battulga and Indian Prime Minister Narendra Damodardas Modi on Sunday.

Earlier on Saturday, President Rouhani held separate bilateral meetings with the presidents of Pakistan, Russia, Belarus, and Afghanistan.

Rouhani is in China to take part at the 18th Shanghai Cooperation Organization (SCO) summit where he is scheduled to deliver a speech on the prospect of expansion of cooperation among the SCO member states and the future of the JCPOA after the US pullout.

The Iranian president is accompanied by high-ranking political and economic figures including Foreign Minister Mohammad Javad Zarif, Oil Minister Bijan Zanganeh, Minister of Economy Masoud Karbasian, Vice President for Economic Affairs Mohammad Nahavandian, and Governor of Central Bank of Iran Valiollah Seif.

Mr. Rouhani is slated to leave the Chinese port city of Qingdao for Iranian capital city of Tehran late on Sunday. </s> LONDON — European firms that stop doing business with Iran due to reimposed U.S. sanctions could in turn be sanctioned by the E.U., a special adviser to the 28-country bloc's top diplomat has warned.

“If E.U. companies abide by U.S. secondary sanctions they will, in turn, be sanctioned by the E.U.," Nathalie Tocci, an aide to E.U. foreign policy chief Federica Mogherini told Britain’s BBC Radio 4 on Monday night.

She characterized the measures as an attempt to "protect European companies.”

Tocci said the move was "necessary in order to signal, diplomatically, to the Iranians that Europeans are serious" about trying to salvage the Iran nuclear deal.

Hours earlier, the U.S. announced it was reintroducing sanctions on the Islamic republic.

The Trump administration's decision to walk away from the landmark 2015 Iran pact signed by the five permanent members of the U.N. Security Council — the U.S., Russia, France, China and the U.K. — as well as Germany and the European Union, dismayed and angered longtime U.S. allies and vital trading partners.

German Chancellor Angela Merkel, French leader Emmanuel Macron and British Foreign Secretary Boris Johnson traveled to the U.S. aiming to convince President Donald Trump not to ditch the deal, saying it was working and the only way to halt a regional arms race.

Nevertheless, Trump went ahead and announced on May 8 the U.S. was withdrawing from what he called the "decaying and rotten" agreement.

Mogherini told reporters Tuesday that the E.U. was doing its "best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran.”

Tocci, the adviser, conceded potential E.U. sanctions as part of the the so-called blocking statute which came into effect on Tuesday were "politically and symbolically" an important step to take. The European measured aimed to allow firms to recover damages from bodies that enforce American sanctions, and bans companies from complying with the sanctions without E.U. permission.

In 2016, the European Union exported more than 8.2 billion euros ($9.7 billion) worth of goods to Iran, while importing almost 5.5 billion euros ($6.5 billion) from there, according to the European Commission. This is dwarfed by the $1.1 trillion the E.U.-U.S. trade represented in the same year.

Virtually all multinational firms do business or banking in the U.S., leaving European companies vulnerable to American sanctions punishing those operating in and with Iran.

Trump doubled down on his stance on Iran early Tuesday.

At midnight Monday, the U.S. began targeting oil-rich Iran's automotive industry, civil aviation sector, as well as trade of gold and other metals are the first in a set of punitive measures had been eased under Trump’s predecessor Barack Obama.

Trump has called for a wholesale overhaul of Iranian regional policies, such as an end to its military support for the Syrian government and regional militant groups like Lebanon's Hezbollah. The 2015 pact did not curb these actions, one reason Trump has called the agreement "the worst deal ever."

International inspectors say Iran has been complying with the deal to curtail its nuclear program.

The U.S. is preparing to reimpose the remainder of U.S. sanctions lifted as part of the agreement, and target Iran's oil sector and central bank in early November.

America has also pressured allies to stop importing oil from Iran before the November deadline. Top buyers of Iranian oil include China, India, Turkey and South Korea.

The effects on Iran of Washington's hardening stance have been stark, with Iran's rial currency losing two-thirds of its value in six months.

Within hours of the White House announcement, international firms announced steps to avoid U.S. sanctions.

On Tuesday, German car manufacturing giant Daimler said it had suspended its activities in Iran.

“We will continue to closely monitor the political developments, especially in connection with the future of the nuclear agreement,” the company said in a statement.

Daimler's announcement came after U.S. Ambassador to Germany Richard Grenell in May warned that firms that continued to do business in Iran would face consequences.

“U.S. sanctions will target critical sectors of Iran’s economy. German companies doing business in Iran should wind down operations immediately,” he tweeted.

In June, auto manufacturer PSA — which makes Peugeot vehicles — began taking steps to suspend its joint-venture activities in Iran while rival Renault has said it will adhere to the U.S. sanctions.

French oil giant Total has said it would quit a multibillion-dollar gas project if it cannot secure a waiver from the sanctions — a request the French government says had been rejected.

F. Brinley Bruton reported from London, and Andy Eckardt and Carlo Angerer from Mainz, Germany.
A member of Iran's Expediency Council calls on the European Union, Russia and China to support the deal and guarantee economic and banking relations with Iran. He warns that Iran would likely exit the deal if it doesn't benefit Iran.