The European Commission will initiate plans Friday to prohibit European companies from adhering to U.S. sanctions against Iran, a move to help keep the Iran nuclear agreement intact and to defend European corporate interests.
“We have the duty to protect European companies,” Commission President Jean-Claude Juncker said following a meeting of European Union leaders Thursday in Sofia, Bulgaria, “We now need to act and this is why we are launching the process.”
Juncker said the commission will begin the process of activating a so-called blocking statute, which bans EU companies from observing the sanctions and any court rulings that enforce U.S. penalties.
Juncker also said the commission would continue to cooperate with Iran and the European Investment Bank would be allowed to facilitate European corporate investment in the Persian Gulf country.
The commission’s move is in retaliation to U.S. President Donald Trump’s decision to withdraw from the Iranian nuclear deal and a subsequent move to revive stringent sanctions against Tehran.
The U.S. actions sparked concern among European countries over how to incentivize Iran to maintain compliance with the accord signed by world powers in July 2015, and the blocking statute is the most powerful tool at its immediate disposal.
European leaders are also confronted with the threat of U.S. tariffs on European steel and aluminum exports. The Trump administration’s temporary exemptions from the tariffs expire June 1.