But the European Union, along with other signatories, supports the agreement Washington abandoned and is determined to uphold it.
The EU is pledging to protect any European corporation that wants to continue trading with Iran from U.S. sanctions. Those penalties include potential multibillion-dollar fines and exclusion from the U.S. market.
Brussels has two potential weapons at its disposal. First, there’s the so-called Blocking Regulation.
“The Blocking Regulation would make it illegal for European companies to comply with U.S. sanctions against Iran,” said Agathe Demarais of the Economist Intelligence Unit. “But it’s a rather blunt instrument. It has not been fully implemented by the member states, and it would be extremely surprising to tell European companies that if they comply with U.S. sanctions, they will be fined. That would be a surprising way of protecting companies.”
The second weapon is more subtle: Next month, the EU unveils a new electronic payment system designed to move money in and out of Iran without American scrutiny.
“The intention is to create some economic independence for European companies so that they’re not so vulnerable to American pressure,” said Sanam Vakil of the Chatham House think tank.
But the U.S. Treasury will be monitoring the system closely, making it difficult for European multinationals to use it without Washington noticing.
The commercial realities facing big European companies will likely trump the EU’s defiance.
Read more: Market Place
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