On 18 May 2018, the European Commission (Commission) issued a press release announcing its decision to take action to demonstrate the European Union’s (EU) commitment to the Joint Comprehensive Plan of Action (JCPOA) and protect the interests of European companies doing business in Iran. The Commission has indicated that it plans to take four steps, as below.
- The Commission intends to amend legislation with a view of countering the effects of President Trump’s decision earlier this month to withdraw the U.S. from the JCPOA and reinstate U.S. sanctions that were previously imposed on Iran before the signing of the JCPOA. Specifically, the Commission will launch a formal process to update the so-called Blocking Statute so that it will apply to the list of U.S. sanctions on Iran. This is an EU regulation that essentially prevents European companies from complying with the extraterritorial effects of U.S. sanctions. It also allows companies to recover damages resulting from such sanctions and invalidates the effects of any foreign court judgments on the company in the EU. The EU has indicated that it aims to have this measure in force before 6 August 2018, which is when the first set of U.S. sanctions take effect.
- Secondly, the Commission will launch a formal process to remove obstacles faced by the European Investment Bank (EIB) in making decisions under the EU budget guarantee to finance activities outside the European Union, including in Iran. This is aimed at aiding small and medium sized companies and ensuring that the EIB is able to support EU investment in Iran. Once both these measures have been formally proposed, the European Parliament and Council will have two months to object to these measures before they come into force. However, this time period may be shortened if both institutions indicate their non-objection to these measures before the end of the time period.
- Thirdly, the Commission will continue to pursue confidence building measures by strengthening the sectoral cooperation with and providing assistance to Iran. As part of this measure, Miguel Arias Canete, Commissioner for Climate Action and Energy, will be travelling to Tehran this weekend.
- Finally, the European Commission is looking into taking steps to encourage Member States to consider the possibility of one-off bank transfers to the Central Bank of Iran.