By Ahmad Rafat
In the past three months, dozens of mid-size and large European companies have announced plans to end their business and trade ties with Iran. The reimposition of U.S. sanctions, the last set of which went into effect on November 5, has alarmed international businesses which rely heavily on the American market and don’t wish to be penalized by the U.S. Department of Treasury for engaging in trade with Iran.
Quercus (British renewable energy investor), Royal Dutch Shell plc (British-Dutch oil and gas company), Saga (Norwegian energy giant), Total (French oil and gas company), Hellenic Petroleum S.A. (Paneuropean Oil and Industrial Holdings), Maersk (Danish business conglomerate), Peugeot (French automotive manufacturer), Lukoil (Russian oil company) and Siemens (German healthcare manufacturer) are some of the companies which have severed their business ties with Iran.
Federica Mogherini, the High Representative of the European Union for Foreign Affairs and Security Policy, announced in early October, that the EU was going to set up a “special purpose vehicle (SPV)” that would protect non-American companies from U.S. economic sanctions against Iran. However, the implementation of the SPV has proven somewhat problematic, and so far none of the 28 members of the EU has been willing to initiate the plan.
Mrs. Mogherini and the European Commission had previously threatened to take punitive actions against any business that severed ties with Iran without prior consultation with the EU. Most European companies have, however, ignored Mogherini’s warning and halted all their Iran-related operations. Pharmaceutical companies and medical equipment manufacturers, which have been granted exemptions from the sanctions by the U.S. Department of Treasury, continue to do business with Iran.
EU Commission President Jean-Claude Juncker had announced earlier that the bloc planned to activate a 1996 law that would prohibit European companies from complying with U.S. sanctions on Iran.
Editorials in many of the European press and media have argued that the law would not protect the companies.
“The European Commission’s response to the U.S. sanctions on Iran has been political and not economic,” the French daily Le Figaro said.
The daily Le Monde agreed. It said: “The EU has given only political lip service to the leaders of the Islamic Republic to ensure that Tehran would remain in the JCPOA [the Joint Comprehensive Plan of Action, better known as Iran nuclear deal.]”
The weekly L’Express, however, asked: “Why should the EU sacrifice its extensive business in the U.S. for the much smaller Iranian market?”
“This EU law is not enforceable,” the weekly La Croix said.
German papers and media have also highlighted the EU’s inability to circumvent the U.S. sanctions.
The correspondent for the German ARD Das Erste TV in Brussels said: “The EU is helpless against U.S. sanctions. Its policies have so far been irrational. Germany’s total trade with the U.S. stands at 105 billion euros which is 35 times its interest in the Iranian market.”
The daily Westdeutsche Allgemeine Zeitung (WAZ) described the EU’s response to the U.S. sanctions as “weak and ineffective.”
“The law is not an effective countermeasure against the U.S. sanctions,” Austrian daily Der Standard wrote.
Italian journalist and author Alberto Negri, who has been a staunch critic of Donald Trump’s Middle East and Iran policies, doubts that the EU would be able to counter the U.S. sanctions against Tehran. Mr. Negri is a correspondent for the Italian business daily Il Sole 24 Ore, and author of “Il turbante e la corona” (The Turban and the Crown) published in 2009.
He told Kayhan Life: “The European [special purpose vehicle (SPV)] plan will not be able to help the companies continue to do business with Iran. The world has to go along with the U.S. as long as the dollar remains the global currency, especially when it comes to oil trade. The only way to escape this predicament is for the international business community to change from single currency to multiple foreign exchange system which is next to impossible to do.”
Translated from Persian by Fardine Hamidi