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7 Aug, 2018 11:12

Brussels has no muscle to protect European firms in Iran from US penalties, analyst tells RT

Brussels has no muscle to protect European firms in Iran from US penalties, analyst tells RT

The European Union has vowed to defend its companies working in Iran. But an expert tells RT that Brussels can’t prevent Washington from punishing anyone who defies its sanctions on the country.

“The EU does not have the power to prevent the imposition of US sanctions, either primary or secondary sanctions. It has provided a possible route to claiming damages for EU operators affected by the extra-territorial effect of some US sanctions legislation,” said Maya Lester, a barrister in public law, EU, and competition law at Brick Court Chambers.

Despite the EU’s promised introduction of the Blocking Statute, which is intended to protect European firms from possible penalties for breaking US sanctions against Iran, European companies are still fleeing Iran.

French oil major Total announced that it would pull out of a billion-dollar deal with Iran and China if it could not obtain a sanctions waiver from Washington. Shipping giant Maersk has announced it would no longer transport Iranian oil.

Automaker Peugeot also said it would leave Iran unless it got a sanctions waiver. Another car producer Daimler AG has dropped plans to expand its business in Iran.

The EU’s Blocking Statute will not persuade European companies to return to Iran, according to Lester.

“I would think it unlikely to have the effect that entities will return to Iran if they have already decided that it is not in their commercial and legal interests to be there,” she told RT.

“The EU can’t prevent the imposition of US primary and secondary sanctions. What it has done is provide a possible route to claiming damages in certain circumstances as a result of the imposition of what the EU regards as extra-territorial US legislation.”

Despite assurances from Brussels, European companies fear becoming secondary targets of US sanctions and are unlikely to risk losing their most important market – the United States.

On Tuesday, US President Donald Trump once again confirmed that Europeans will get no waiver. “Anyone doing business with Iran will NOT be doing business with the United States,” he posted on Twitter.

For more stories on economy & finance visit RT's business section