EU moves to block US sanctions on Iran

[BHarwana]

EU to activate law that bans European companies from complying with US sanctions against Iran.

5 hours ago

Jean Claude Juncker said the EU has a duty to protect European companies [Stoyan Nenov/Reuters]
The 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 European Union 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 the international deal with Iran, which placed limits on Tehran's nuclear programme in exchange for sanctions relief.

The UK, 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.

Hassan Rouhani, Iran's president, said Tehran would remain committed to the deal, provided the deal's remaining signatories ensure Iran was protected from sanctions.

Blocking statute
Al Jazeera's Paul Brennan, reporting from Sofia, said EU leaders showed unity at summit by pledging to stick by the Iran accord. "But they know their options are limited", he said.

The blocking statute – a regulation created in 1996 to get around Washington's trade embargo on Cuba – was "outdated", Brennan said.

"The 1996 law was used to defend European businesses from US penalties for dealing with Cuba. But the US Congress has since passed new laws that make the EU statute outdated, such as threats to cut off companies' access to the US banking system," he said.

"The blocking mechanism will help small businesses that do not deal with the US, but the big multi-national companies, like Total and Maersk, are dealing in dollars and that means they will be subject to US sanctions if they continue to trade with Iran," he said.

Earlier in the day, Valdis Dombrovskis, financial services commissioner, told European parliament that using the blocking statute to ban banks from following the US sanctions would be of limited use, given the global reach of finance.

"The EU blocking regulation could be of limited effectiveness there, given the international nature of banking system and especially the exposure of large systemic banks to US financial system and US dollar transactions," he said.

Nervous companies

Several European countries have quit business with Iran following the US exit.

Danish shipping giant Maersk Tankers also said Thursday it would cease its activities in Iran, while German insurer Allianz announced plans to wind down its business deals there.

Italian steel manufacturer Danieli announced it has halted work on finding financial coverage for orders it won in Iran worth 1.5 billion euros ($1.8bn).

The French energy giant, Total, warned on Wednesday it would pull out of a multibillion-dollar project to develop the vast South Pars gas field, which started in July 2017, unless it is granted a waiver by US authorities.

That led Bijan Zangeneh, Iran's oil minister, to announce that Chinese state-owned oil company CNPC was ready to replace Total if it withdraws.

Separately, a British consortium, Pergas International, signed a preliminary deal with National Iranian South Oil Co to develop the Karanj oil field late on Wednesday, according to Iranian state TV.

The agreement is the first between Iran and a European company since the US exit from the nuclear accord.

Meanwhile, Russia moved to extend its economic influence in Iran.

In the Kazakh capital, Astana, the Russia-led Eurasian Economic Union trade bloc signed an interim trade deal with Iran that lowers tariffs on hundreds of goods.

The bloc, which also comprises Armenia, Belarus, Kazakhstan and Kyrgyzstan, plans to begin three years of talks with Iran that aim to create a free trade zone.

'Oil at $100 a barrel'
Total's CEO said on Thursday he wouldn't be surprised to see the price of a barrel of crude reach $100 later this year because of international political disputes.

"We are in a new world. We are in a world where geopolitics are dominating the market again," Patrick Pouyanne said at an event at a Washington think-tank.

Market ripples from Venezuela's economic distress and Trump's decision to exit the Iran nuclear deal have oil prices surging. On Thursday, a barrel of North Sea Brent briefly passed $80 for the first time since November 2014.

"You have the announcement on Iran, which is pushing the price up," said Pouyanne. "So I wouldn't be surprised to see $100 per barrel in the coming months."


https://www.aljazeera.com/news/2018/05/eu-moves-block-sanctions-iran-180517134848253.html

 

[khansaheeb]

Lol, greedy capitalists fighting each other.

 

[Chinese-Dragon]

That led Bijan Zangeneh, Iran's oil minister, to announce that Chinese state-owned oil company CNPC was ready to replace Total if it withdraws.

CNPC already owns a large share of the South Pars oil field project, if we get Total's share as well that would be even better.

 

[The SC]

CNPC already owns a large share of the South Pars oil field project, if we get Total's share as well that would be even better.

That is what going to happen, since Total can't stay.. and I haven't seen any other offer than the CNCP one..

 

[Chinese-Dragon]

That is what going to happen, since Total can't stay.. and I haven't seen any other offer than the CNCP one..

If the EU pushes that law through tomorrow like the EU Chief said they will, then Total might face significant punishment from the EU itself by being compliant with US sanctions.

Though of course I'd prefer it if China got Total's share of South Pars instead, but it might not turn out that way.

 

[The Diplomat]

France has a multi billion dollar Airbus deal with Iran which a lot of European countries benefit from. Secondly you made a deal, so stick with it. The US is getting isolated by her closest allies.

 

[The SC]

If the EU pushes that law through tomorrow like the EU Chief said they will, then Total might face significant punishment from the EU itself by being compliant with US sanctions.

Though of course I'd prefer it if China got Total's share of South Pars instead, but it might not turn out that way.

"Blocking statute

Al Jazeera's Paul Brennan, reporting from Sofia, said EU leaders showed unity at summit by pledging to stick by the Iran accord. "But they know their options are limited", he said.

The blocking statute – a regulation created in 1996 to get around Washington's trade embargo on Cuba – was "outdated", Brennan said.

"The 1996 law was used to defend European businesses from US penalties for dealing with Cuba. But the US Congress has since passed new laws that make the EU statute outdated, such as threats to cut off companies' access to the US banking system," he said.

"The blocking mechanism will help small businesses that do not deal with the US, but the big multi-national companies, like Total and Maersk, are dealing in dollars and that means they will be subject to US sanctions if they continue to trade with Iran," he said.

Earlier in the day, Valdis Dombrovskis, financial services commissioner, told European parliament that using the blocking statute to ban banks from following the US sanctions would be of limited use, given the global reach of finance.

"The EU blocking regulation could be of limited effectiveness there, given the international nature of banking system and especially the exposure of large systemic banks to US financial system and US dollar transactions," he said. "

 

[Chinese-Dragon]

"Blocking statute

Al Jazeera's Paul Brennan, reporting from Sofia, said EU leaders showed unity at summit by pledging to stick by the Iran accord. "But they know their options are limited", he said.

The blocking statute – a regulation created in 1996 to get around Washington's trade embargo on Cuba – was "outdated", Brennan said.

"The 1996 law was used to defend European businesses from US penalties for dealing with Cuba. But the US Congress has since passed new laws that make the EU statute outdated, such as threats to cut off companies' access to the US banking system," he said.

"The blocking mechanism will help small businesses that do not deal with the US, but the big multi-national companies, like Total and Maersk, are dealing in dollars and that means they will be subject to US sanctions if they continue to trade with Iran," he said.

Earlier in the day, Valdis Dombrovskis, financial services commissioner, told European parliament that using the blocking statute to ban banks from following the US sanctions would be of limited use, given the global reach of finance.

"The EU blocking regulation could be of limited effectiveness there, given the international nature of banking system and especially the exposure of large systemic banks to US financial system and US dollar transactions," he said. "

Trade and investment is a two-way street, how long is the USA going to keep cutting off their nose to spite their own face.

Looks like the EU is fed up of it, so is China, Russia and the UK.

This kind of behaviour is going to make all international companies and investors see the USA as an extremely risky place to do business, since their business operations can be randomly cut off there by some insane orange baboons in the White House.

We'll see how far the EU pushes new legislation, looks like some companies are already ready to dive in:

Separately, a British consortium, Pergas International, signed a preliminary deal with National Iranian South Oil Co to develop the Karanj oil field late on Wednesday, according to Iranian state TV.

Worst comes to worst for Iran, China's state-owned companies like CNPC will buy up the rest. They are already so heavily involved in Iran's oil sector that it won't make a difference.

 

[The SC]

Trade and investment is a two-way street, how long is the USA going to keep cutting off their nose to spite their own face.

Looks like the EU is fed up of it, so is China, Russia and the UK.

This kind of behaviour is going to make all international companies and investors see the USA as an extremely risky place to do business, since their business operations can be randomly cut off there by some insane orange baboons in the White House.

We'll see how far the EU pushes new legislation, looks like some companies are already ready to dive in:



Worst comes to worst for Iran, China's state-owned companies like CNPC will buy up the rest. They are already so heavily involved in Iran's oil sector that it won't make a difference.

I am sure you know how dependant the EU is towards the US and that shows in many dimensions, Security is the main one, and then there is trade, investments and technology.. one rarely hears the US getting components for their weapons or weapon systems from Europe but the other way is true.. It is a bit arrogant from the US.. but we all know the priciple of the survival of the fittest.. and it happens that the US is the fittest for now..no ne can do much about it..It might take decades before a new world order might replace the current one where it leads.. it is too bad..but it is reality as it is now..

 

[Chinese-Dragon]

I am sure you know how dependant the EU is towards the US and that shows in many dimensions, Security is the main one, and then there is trade, investments and technology.. one rarely hears the US getting components for their weapons or weapon systems from Europe but the other way is true.. It is a bit arrogant from the US.. but we all know the priciple of the survival of the fittest.. and it happens that the US is the fittest for now..no ne can do much about it..It might take decades before a new world order might replace the current one where it leads.. it is too bad..but it is reality as it is now..

Well we shall see what happens, it looks like Europe is serious about this. And it is a huge opportunity to get people off the US dollar and to use Euros/Yuan/Pounds/Yen instead.

China and Russia will keep trading with Iran regardless, both have felt the sting of US sanctions and neither one will be interested in following the US lead here.

If Iran is smart, they will use this second big opportunity to build nuclear weapons. The USA has shot themselves in the foot by pissing off most of the world with their endless threats of sanctions, even countries that were not especially friendly with Iran (such as China) are now going to go into overdrive to help them bypass sanctions.

 

[The SC]

Well we shall see what happens, it looks like Europe is serious about this. And it is a huge opportunity to get people off the US dollar and to use Euros/Yuan/Pounds/Yen instead.

China and Russia will keep trading with Iran regardless, both have felt the sting of US sanctions and neither one will be interested in following the US lead here.

If Iran is smart, they will use this second big opportunity to build nuclear weapons. The USA has shot themselves in the foot by pissing off most of the world with their endless threats of sanctions, even countries that were not especially friendly with Iran (such as China) are now going to go into overdrive to help them bypass sanctions.

States usually weigh the advantages and disadvantages of their moves on their interests before taking vital decisions.. Europe might go the Trump way or might outright oppose him (very doubtful though!).. but they will take a decision that responds best to their strategic interests.. China is the only independent part of this deal, even Russia is subjected to US sanctions.. it will be 100 times more difficult for Iran to go nuclear now than before,, just imagine all the UN inspections they are subjected to.. and first Iran has to pull out from the deal, a move that look like a trap set by the US.. this sounds like being between a rock and a hard place for Iran..it is quite clearly intended for a regime change or at least a policy change in the region..

 

[BHarwana]

for a regime change or at least a policy change in the region..

This phrase is too much optimistic. After what happened in Syria I think regime changes are no more on card. The world has seen last regime change in Libya, This is not possible even in North Korea. If we see what happened in North Korea and I think Trump would make next deal if Iran test ICBM after getting a Nuke.

 

[Chinese-Dragon]

States usually weigh the advantages and disadvantages of their moves on their interests before taking vital decisions.. Europe might go the Trump way or might outright oppose him (very doubtful though!).. but they will take a decision that responds best to their strategic interests.. China is the only independent part of this deal, even Russia is subjected to US sanctions.. it will be 100 times more difficult for Iran to go nuclear now than before,, just imagine all the UN inspections they are subjected to.. and first Iran has to pull out from the deal, a move that look like a trap set by the US.. this sounds like being between a rock and a hard place for Iran..it is quite clearly intended for a regime change or at least a policy change in the region..

If the USA really wanted a united front against Iran, why did they piss off China, Russia, the UK and the EU all at the same time. In the P5+1 every single member condemned the USA for pulling out of the Iran deal.

Now all of these players are going to do everything possible to undermine the US sanctions against Iran.

The EU and the UK seem especially pissed off.

And the lesson for Iran in particular is that if they go the North Korea way, i.e. testing hydrogen bombs and ICBMs, Donald Trump will be falling over to call them "nice guys" like he does with Kim Jong Un.

... a move that look like a trap set by the US...

It definitely does look like a trap set by the US, however it looks like the US was the one who was caught in a trap. Unless it was their intention to seek international isolation, first over pulling out of the Iran deal (isolated in the P5+1 even by their own allies), and secondly for moving the US embassy to Jerusalem which was condemned by practically the entire world (apart from Israel).

 

[The SC]

If the USA really wanted a united front against Iran, why did they piss off China, Russia, the UK and the EU all at the same time. In the P5+1 every single member condemned the USA for pulling out of the Iran deal.

Now all of these players are going to do everything possible to undermine the US sanctions against Iran.

The EU and the UK seem especially pissed off.

And the lesson for Iran in particular is that if they go the North Korea way, i.e. testing hydrogen bombs and ICBMs, Donald Trump will be falling over to call them "nice guys" like he does with Kim Jong Un.



It definitely does look like a trap set by the US, however it looks like the US was the one who was caught in a trap. Unless it was their intention to seek international isolation, first over pulling out of the Iran deal (isolated in the P5+1 even by their own allies), and secondly for moving the US embassy to Jerusalem which was condemned by practically the entire world (apart from Israel).

Well, Iran or not.. they piss off everyone most of the time..It is a consistent policy and it led to wars sometimes.. they act like Cowboys with the rest of the Planet as Indians..The worst part of it is that they get away with it most of the time..

 

[khansaheeb]

That is what going to happen, since Total can't stay.. and I haven't seen any other offer than the CNCP one..

Last time there was a withdrawal of US and EU companies from Libya was followed by a massive bombing and civil unrest in Libya.