BRUSSELS (Reuters) - The European Union voiced deep regret on Monday over U.S. President Donald Trump’s renewal of sanctions on Iran, which will test the bloc’s ability to preserve a 2015 deal under which Iran curbed its nuclear activity in return for sanctions relief.

Despite protest from European allies, U.S. Secretary of State Mike Pompeo vowed to fully enforce the snapback of sanctions, whose implementation will be detailed by the U.S. administration on Monday.

The EU and other parties to the deal, China and Russia, are working to maintain trade with Iran, which has threatened to stop complying with curbs on its nuclear work if it fails to see the economic benefits of relief from sanctions under the deal.

One EU measure to mitigate the impact of U.S. sanctions, known as the blocking statute, will come into force on Tuesday.

“We deeply regret the re-imposition of sanctions by the U.S.,” the bloc said in a joint statement with the foreign ministers of France, Germany and Britain.

“The remaining parties ... have committed to work on, inter alia, the preservation and maintenance of effective financial channels with Iran, and the continuation of Iran’s export of oil and gas.”

The EU’s so-called blocking statute seeks to shield small and medium-sized businesses working in Iran.

It seeks to forbid EU persons from complying with U.S. sanctions, allow for the recovery of related damages and counter court rulings to enforce American penalties.

EU officials admit, however, that the measure does not go far enough in protecting big European firms from the risks of investing in Iran.

With the U.S. administration taking a hard line on waivers, many major companies have already announced that they are quitting the country. </s> The European Union is not taking renewed U.S. sanctions against Iran lying down.

The sanctions, which came into effect Monday at midnight east coast time, are the result of the U.S.’s withdrawal from the Iran nuclear deal, which came with a deadline for businesses to stop any business with Iran when it was announced in May. But a counter-measure from the EU came into effect at the same time. It’s a blocking measure designed to protect European countries and to keep at least some part of the nuclear deal alive.

The measure will allow European businesses affected by sanctions to sue the American government in European member state courts, and require European businesses to receive a waiver if they plan to activities in Iran. American businesses, by contrast, are required to apply for a waiver in order to activities in Iran.

The EU’s defiance of renewed American sanctions represents a serious escalation in tensions between the Trump administration and its European counterparts. EU officials have said the sanctions are “illegal” and vowed to thwart them. In an official statement, Trump promised “severe consequences” for those who violated sanctions, later reiterating the threat on Twitter.

Russia and China are also among the countries that support the Iran nuclear deal and oppose sanctions. This isn’t the first time the EU has opposed sanctions imposed by the U.S. The same mechanism was used to protect EU countries from sanctions against Cuba. </s> BRUSSELS (Reuters) - The European Union vowed on Monday to counter U.S. President Donald Trump’s renewal of sanctions on Iran, in a test of the EU’s ability to preserve a deal that saw Iran limit its nuclear ambitions in exchange for removing strict curbs on its economy.

As Washington’s so-called “snapback” sanctions are reinstated on Tuesday, a new EU law to shield European companies will also take effect to try to mitigate what EU officials say is their “unlawful” reach beyond U.S. borders.

Despite protests from European allies, U.S. Secretary of State Mike Pompeo said Washington would fully enforce the sanctions. EU diplomats said they were awaiting details on Monday on how they will be implemented.

The EU and other parties to the 2015 deal, China and Russia, are working to maintain trade with Iran, which has threatened to stop complying with curbs on its nuclear work if it fails to see the economic benefits of relief from sanctions under the deal.

“We deeply regret the re-imposition of sanctions by the U.S.,” the bloc said in a joint statement with the foreign ministers of France, Germany and Britain.

They pledged to work on preserving financial flows and Iran’s oil and gas exports - a lifeline of its economy.

EU officials hope the EU’s so-called blocking statute will mitigate the impact of U.S. sanctions for business, including by deterring U.S. authorities from enforcing some penalties.

But they admit it may not be enough to convince European firms to brave U.S. penalties in order to do business with Iran. Senior U.S. administration officials brushed off questions about the EU measure on Monday, warning the risks were real for companies working in Iran.

The new measure forbids EU persons from complying with U.S. sanctions or related court rulings and allows for firms to sue in court to recover potential damages from parties who withdraw from contracts due to U.S. sanctions.

“For those who have exposure, there is no panacea. What this does is it provides a deterrence. It means that sanctions that are discretionary may never be applied,” one senior EU official said, adding that firms have rarely been fined under U.S. secondary sanctions in the past.

“If they (sanctions) are applied, then that person can go to the court to recover that damage.”

Under the new rules, firms should apply for EU authorization to wind down operations in Iran if it is doing so to comply with U.S. sanctions but not if it is a business decision - a distinction that may be difficult to make.

The threat of EU penalties for European firms who fail to seek such a legal exemption for withdrawing from Iran due to U.S. sanctions has raised alarm among EU businesses that they could be penalized either way.

Seeking to ease concerns, EU officials have stressed the measure seeks to “free not force” firms to remain invested in Iran.

EU officials say they will be strict in reviewing requests for exemptions - wary to undermine its effect by granting too many authorizations.

A number of other countries have asked EU officials for details on the blocking regulations as they also explore ways to bypass sanctions and their effect on oil markets: “There is a clear interest around the world,” one EU official said.

With the U.S. administration taking a hard line on granting waivers from sanctions, many major companies from the oil and gas industry to car manufacturers and consumer goods firms have already announced that they are quitting the country.

German exports to Iran alone fell by four percent in the first five months of 2018 after rising by 16 percent last year, the German Chamber of Commerce and Industry (DIHK) said. </s> The European Union has updated legislation aimed at countering sanctions imposed by the United States on businesses operating in Iran as part of its pledge to uphold the nuclear deal after Washington pulled out.

The US announced its decision last month to exit the 2015 deal, which aims to prevent Iran from developing nuclear weapons in return for the lifting of sanctions that had stifled its economy.

Wednesday's development came as the EU and the other parties to the deal vowed to stick to the agreement if Iran continues to implement it.

The European Commission, the executive branch of the EU, revised the so-called blocking statute - legislation that seeks to shield EU companies that continue doing business with Iran, and gives them a framework to recover any damages suffered as a result of US sanctions.

It also authorised the European Investment Bank (EIB) to finance Iranian projects, while noting it was up to the bank to give the go-ahead for any investments.

EU governments and members of the European Parliament now have a period of two months to object to the two measures; otherwise, they will come into effect in early August, which is when the first round of US sanctions against Iran will take effect.

However, the EIB on Wednesday said it could not ignore US sanctions on Iran, rejecting the EU executive plan that it to do business there in an effort to save the 2015 nuclear deal.

The pushback from the European Union's lending arm underscores the limits of the bloc's ability to shield trade with Iran from the reimposition of US sanctions.

Despite its political role in supporting EU policy, the EIB said it "could not be the solution to the problem" of a push by the remaining parties to keep alive their promise of sanctions relief in exchange for curbs on Tehran's nuclear programme.

"The EU bank is not the right tool," an EIB spokesman told Reuters news agency, saying its business model "would be incompatible with ignoring possible sanctions against Iran".



Germany, France and the United Kingdom also appealed to Washington not to punish European companies for doing business in Iran, in a letter sent to US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin, dated June 4.

They requested exemptions for EU companies that struck deals in Iran after the nuclear deal came into effect, and for key sectors such as energy, civil aviation and infrastructure, as well as exemptions to maintain financing channels with Iran, among other things.

Besides the EU and the US, the Iran nuclear deal was negotiated by Britain, France, Germany, Russia and China. It was formally endorsed by the UN Security Council, incorporating it into international law.

Iran said on Wednesday it was in "preparatory works" to restart nuclear activities in the event of the failure of the 2015 accord.

In such a scenario, Iran could "restart its activities without any limits," Iran's ambassador to the International Atomic Energy Agency (IAEA) Reza Najafi told reporters on the sidelines of a meeting of its board in Vienna.

Iran is expected to top the agenda at the Group of Seven (G7) summit on Friday and Saturday in Canada, where seven of the world's most-developed countries will come together to discuss policy. </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. </s> The European Union has taken action to try to prevent the collapse of the Iran nuclear deal, adopting a new rule banning European companies from complying with US sanctions and allowing the European Investment Bank to fund projects in Iran.

But it will leave many companies with a painful choice whether to follow EU or US rules on doing business with Iran.

The decision by the European Commission, the EU’s executive body, is provisional as it requires approval from the European Parliament and the heads of EU member states.

However, it is a strong signal of the EU’s desire to rescue the crumbling 2015 nuclear deal, a day after Tehran announced plans to increase its uranium enrichment capacity with new centrifuges.

"The European Union is fully committed to the continued, full and effective implementation of the [Iran nuclear deal] so long as Iran also respects its obligations," it said in a statement on Wednesday after a meeting of senior EU commissioners in Brussels. </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> Susannah George and Zeke Miller, The Associated Press 

 



WASHINGTON -- The first set of U.S. sanctions against Iran that had been eased under the landmark nuclear accord went back into effect early Tuesday under an executive order signed by U.S. President Donald Trump, targeting financial transactions that involve U.S. dollars, Iran's automotive sector, the purchase of commercial planes and metals including gold.

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

The stiff economic sanctions ratchet up pressure on the Islamic Republic despite statements of deep dismay from European allies, three months after 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.

As the sanctions loomed Monday, 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 behaviour and reintegrate with the global economy, or continue down a path of economic isolation."

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

The Europeans didn't like any of it.

Despite Trump's claims, the accord "is working and delivering on its goal" of limiting Iran's nuclear program, said a statement by European Union foreign policy chief Federica Mogherini and the foreign ministers of France, Germany and the United Kingdom.

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

A senior administration official, briefing reporters under ground rules requiring anonymity, said the United States is "not particularly concerned" by EU efforts to protect European firms from the sanctions.

Iranian President Hassan Rouhani said that Iran still can rely on China and Russia to keep its oil and banking sectors afloat. Speaking in a television interview, he also demanded compensation for decades of American "intervention" in the Islamic Republic.

Months of uncertainty surrounding the sanctions have already further hurt Iran's economy. The country's rial currency has tanked, and the downturn has sparked protests across the nation.

The "Trump Administration wants the world to believe it's concerned about the Iranian people," Iranian Foreign Minister Mohammad Javad Zarif said in a statement posted to Twitter. But, he said, the reimposed sanctions would endanger "ordinary Iranians."

"US hypocrisy knows no bounds," he said.

U.S. officials insisted the American government stands with the people of Iran and supports many of their complaints against their own government.

National security adviser John Bolton said Iran's leadership is on "very shaky ground," but he insisted economic pressure from the Trump administration is not an attempt at "regime change."

Secretary of State Mike Pompeo said sanctions are an important pillar in U.S. policy toward Iran and will remain in place until the Iranian government radically changes course.

"They've got to behave like a normal country. That's the ask. It's pretty simple," said Pompeo, en route Sunday from a three-nation trip to Southeast Asia.

Israeli Prime Minister Benjamin Netanyahu, a firm foe of the Iranian government, said the sanctions symbolize "the determination to block Iran's regional aggression as well as its continuous plans to arm itself with nuclear weapons."

He called on the countries of Europe to join the U.S., saying, "The time has come to stop talking; the time has come to do."

The U.S has long designated Iran as the world's foremost state sponsor of terrorism, Pompeo noted Sunday, adding that the Islamic Republic cannot expect to be treated as an equal in the international community until it halts such activities.

He said that "there's no evidence today of a change in their behaviour," and in the meantime "we're going to enforce the sanctions."

Associated Press writers Nasser Karimi in Tehran and Ian Deitch in Jerusalem contributed </s> The European Investment Bank on Wednesday said it could not ignore US sanctions on Iran, rejecting the EU executive plan that it to do business there in an effort to save the 2015 nuclear deal. The pushback from the European Union’s own lending arm underscores the limits of the bloc’s ability to shield trade with Iran from the reimposition of US sanctions after President Donald Trump abandoned the nuclear accord last month.

Despite its political role in supporting EU policy, the EIB said it “could not be the solution to the problem” of a push by the remaining parties to keep alive their promise of sanctions relief in exchange for curbs on Tehran’s nuclear programme. “The EU bank is not the right tool,” an EIB spokesman told Reuters, saying its business model “would be incompatible with ignoring possible sanctions against Iran.”

The bank’s fears that its ability to raise funds on international capital markets would suffer echoes the calculation made by other European firms quitting Iran rather than risk penalties and access to the much vaster US market. But the comment, the EIB’s first since the EU executive proposed it engage in Iran last month, is a particularly hard blow coming not from a commercial bank but from an institution driven by EU policy.

European Commissioners earlier on Wednesday agreed to enable the bank to work in Iran, where it has never before done business, as part of its response to Iran’s demands that it show proof of its commitment to the nuclear deal. It is still up to the EU’s governing board – made up of the finance ministers of the bloc’s 28 nations – to decide whether to do so. As EU sources exclusively told Reuters on Tuesday, the EIB is under pressure from the United States – where the bank raises much of its funds – to stay away from activities in Iran.

The United States has warned European firms to steer clear of commerce with Iran once sanctions on transactions in dollars with Iranian firms kick in from August. The EU also announced on Wednesday it will activate its blocking statute, a never-before used measure that would order EU firms not to comply with US sanctions.

EU officials admit, however, that while the measure may help protect small to medium-size EU firms with little US exposure, it is not designed to help big global companies. The only hope for those firms to stay in the Islamic Republic, they say, is to seek waivers from Washington’s sanctions. Ministers from Germany, France and Britain wrote to senior U.S. officials this week singling out key areas where they expected exemptions for EU firms, including pharmaceuticals, healthcare, energy, automotive, civil aviation, infrastructure and banking.

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The European Union announces that its blocking statute against the US sanctions will take effect tomorrow, protecting European companies from US sanctions and encouraging them to keep trading with Iran.