LondonThe European Commission will launch the process of activating a law that bans European companies and courts from complying with US sanctions against Iran, after Washington pulled out of the landmark 2015 nuclear deal.
Jean Claude Juncker, president of the European Commission, said on Thursday the commission has a “duty to protect European companies” from American sanctions.
“We now need to act and this is why we are launching the process to activate the ‘blocking statute’ from 1996. We will do that tomorrow [Friday] morning at 10:30,” he told a news conference in the Bulgarian capital, Sofia, after a meeting of EU leaders.
The EU wants to salvage the nuclear deal and its blocking statute is the most powerful tool at its immediate disposal, as it means EU companies won’t have to comply with US sanctions.
It also does not recognise any court rulings that enforce American penalties.
Juncker’s announcement comes after US President Donald Trump withdrew Washington from international deal with Iran, which placed limits on its nuclear programme in exchange for sanctions relief.
Britain, France, Germany, China and Russia were signatories of the 2015 pact and have opposed the US pullout.
But companies around the world now face a difficult choice as Washington has threatened to punish firms that violate US sanctions by dealing with Iran.
The European Commission’s blocking statute is seen by European governments more as a political weapon than a regulation, because its rules are vague and difficult to enforce, serving mainly as a warning to the US.
Al Jazeera’s Paul Brennan, reporting from Sofia, said the law was “outdated”, which may limit its impact.
“The 1996 law was used to defend European businesses from US penalties for dealing with Cuba. But the US Congress has passed new laws that make the EU statute outdated,” he said.
He added that the row over the Cuba embargo was settled politically, so the effectiveness of the blocking regulation was never put to the test.
The international reach of the US financial system and the US presence of many European companies also raise questions about its effectiveness.
Juncker said the European Commission has decided to allow the European Investment Bank to facilitate European companies’ investment in Iran for the first time. That could allow more euro-dominated loans to Iran.
Follow this link to join our WhatsApp group: Join Now
Be Part of Quality Journalism |
Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast. |
| ACT NOW |
| MONTHLY | Rs 100 |  |
| YEARLY | Rs 1000 | |
| LIFETIME | Rs 10000 | |
