French finance minister Bruno Le Maire is leading the calls for the EU to intervene and protect European firms against any sanctions imposed by the United States. And the ally of President Emmanuel Macron also demanded Brussels to toughen its stance against the Trump administration.
Mr Le Maire referred to EU rules dating back to 1996 when the United States tried to penalise foreign companies trading with Cuba. Back then the EU forced Washington to back down by threatening retaliatory sanctions.
The finance minister told radio news: “Are we going to allow the United States to be the economic policeman of the world? The answer is no.”
A possible solution Mr Le Maire said was “strengthening that 1996 rule” adding that “would allow us to take charge ourselves of the cost of any potential sanctions paid by firms, which could therefore be paid for on their behalf by the European Union”.
French energy giant Total is particularly exposed to Iran sanctions and has publicly stated the firm will quit all projects in Iran if EU leaders fail to safeguard trade with Tehran over the United States’ withdrawal from the Iran nuclear deal.
Total – the third largest company by revenue in Europe – revealed lat week the firm would walk away from a multi-billion-dollar gas project if a waiver from US sanctions was not secured. Tehran had repeatedly hailed the project between the French giant and the Islamic Republic as a symbol of the nuclear accord’s success.
Total signed a contract in 2017 to develop phase 11 of Iran’s South Pars field with an initial investment of $1billion. However, in a statement today the firm announced: “Total will not continue the South Pars 11 project and will have to unwind all related operations before 4 November 2018, unless Total is granted a specific project waiver by US authorities with the support of the French and European authorities.”
German insurer Allianz and Danish oil product tanker operator Maersk Tankers have also said they could wind down their businesses in Iran, while Joe Kaeser, the CEO of Germany’s Siemens told CNN his company would not be able to do any new business with Tehran.
Lorne Baring, chief investment officer at fund management firm B Capital SA said: “There might be some element of arbitration for the European companies in Iran, but ultimately nobody will want to get on the wrong side of US sanctions.”
The 2015 agreement, authored by the United States, France, Germany, Britain, Russia, China and Iran, lifted sanctions on Iran in exchange for Tehran limiting its nuclear program. The pact was designed to prevent Iran from obtaining a nuclear bomb.
Mr Le Maire said European companies looking to invest abroad, such as in Iran, could aim to get financing from within Europe, rather than via US dollars or US banks.