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The EU is finalizing its plans to mitigate punitive measures as the Trump administration prepares to impose a new wave of sanctions next month and in November. The first batch will target the trade of cars, gold and other metals; Iran's main exports and oil transactions with the central bank
The main weapon developed by the EU is a revised version of a "blocking code" originally developed in the 1990s for counter US sanctions against Iran, Libya and Cuba. The law prohibits European companies from complying with US measures and allows them to recover damages resulting from the sanctions of "the person who provoked them".
But lawyers and diplomats doubt the effectiveness of a tool ever
"It's a European policy totally at odds with US policy: this is not happening very often, "says Jean De Ruyt, senior advisor at Covington & Burling, international law firm, and former Belgian Ambbadador to the EU
Any major European company will be scared … because the American arm is long
Jean De Ruyt, Covington & Burling
The dilemma was created after the withdrawal of Donald Trump in May the 2015 nuclear agreement that Iran signed with the powers worldwide, including the EU, the UK, France and Germany. The European signatories are desperate to save the case, and believe that it is essential that the republic is still able to reap an economic dividend from the agreement.
But Trump suggested that his administration will offer few waivers to companies. The US president has used his toughest language yet against the Islamic regime this week, warning Iran that it would face serious "consequences" if it threatened America. Hbadan Rouhani, the Iranian president, said this weekend that reimposing new sanctions would amount to a "declaration of war against the nation".
There are also trade tensions between the United States and the EU over Trump's decision to impose duties on Federica Mogherini, head of the EU's foreign policy, acknowledged last week that the EU was facing a "difficult exercise" in its response to sanctions against Iran because of the weight of the United States in the global economy and the financial system. "
" But we are determined to preserve this agreement, "she said.
Brett Hillis, partner and sanctions expert at Reed Smith, an international law firm, says nothing in the plans EU would stop running for the hills "by European companies active in Iran He said the blocking law was" a measure that indicates the EU's dissatisfaction but is not going enough " far to advance the calculation for the European companies. "
Any punishment threatened in Europe to comply with the penalties retribution to the US to ignore them.In 2015, a US court sentenced BNP Paribas, the French bank, to pay nearly $ 9 billion in fines and forfeitures for alleged violations of sanctions against Iran, Sudan and Cuba
against individual leaders, the exclusion of public procurement and other opportunities lost because of reputational damage.
To enforce the blocking law, European authorities should also prove that a company has raped it by withdrawing from Iran. Companies could advance a range of defenses, including that they were leaving the Islamic Republic for commercial reasons.
European companies including PSA Peugeot and the French oil company Total have already said that they would stop their operations in Iran unless they obtain a waiver. It has emerged this month that the United States has rebuffed a European demand for renewed sanctions sanctions of crucial industries, including finance, energy and health care.
Roger Matthews, senior attorney at Dechert, says that if the EU He added that the European Commission's directives expected soon should bring more clarity.
Other EU proposals to isolate companies by offering them non-dollar-denominated financing lines through institutions such as the European Investment Bank have had own problems.
Werner Hoyer, president of the EIB, said last week that he would risk the bank's economic model "if it played an" active role "in Iran.
European diplomats hope to still be able progress in other areas, such as the provision of bilateral financing lines in Tehran and measures to make oil-related operations directly to the Iranian central bank.The United States could also further soften its position: State Secretary Mike Pompeo hinted this month that Washington could still grant exemptions from the individual country's sanctions
But without such exclusions, the impact of counter-measures from EU symbolic and insufficient to convince many large companies to engage with Iran. "Any major European venture will be scared," says De Ruyt. "Because the American arm is long." [19659021] + 
By Michael Peel
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