On Friday 18 May, the European Commission officially launched the initial procedures to diminish the effects on European businesses of the US extraterritorial sanctions against Iran, and to continue economic and trade relations with Tehran, after obtaining the agreement of the heads of state and government, in Sofia on 16 May, to move in this direction.
In a press release, the Commission announced the launch of the "formal process to activate the Blocking Statute by updating the list of US sanctions on Iran falling within its scope". The Blocking Statute (also called the Blocking Law) forbids EU companies from complying with the extraterritorial effects of US sanctions, allows companies to recover damages arising from such sanctions from the person causing them, and nullifies the effect in the EU of any foreign court judgments based on them. The aim is to have the measure in force before 6 August 2018, when the first batch of US sanctions (all measures except those linked to energy) take effect.
The Commission also launched the formal process to remove obstacles for the European Investment Bank (EIB) to decide under the EU budget guarantee to finance activities outside the European Union, in Iran. According to the Commission, this will allow the EIB to support EU investment in Iran and could be useful in particular for small and medium-sized companies. "All relevant rules and procedures will apply to individual financial operations", the Commission stated in its press release.
As explained by EUROPE (see EUROPE 12022), for these two procedures, the European Parliament and Council will have a period of two months to object to these measures, once proposed, before they enter into force. This period can be shorter if both institutions signal their non-objection before the end of the period. "The processes can be ended if political circumstances no longer justify the adoption of the measures", the Commission added.
The Commission also announced confidence-building measures, with the continuation and strengthening of the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector and with regard to small and medium-sized companies. "Financial assistance through the development cooperation or partnership instruments will also be mobilised", the Commission stated, although the amounts have not yet been recorded.
The Commission also encourages the member states to take steps to explore the possibility of one-off bank transfers to the Central Bank of Iran. "This approach could help the Iranian authorities to receive their oil-related revenues, particularly in case of US sanctions which could target EU entities active in oil transactions with Iran", the Commission states. (Original version in French by Camille-Cerise Gessant with Lucas Tripoteau)