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Europe seeks US blessing to maintain its trade with Iran

Three European countries and the European Union are seeking exemptions from US sanctions on Iran in a sign that the bloc’s bid to hold the landmark nuclear deal together may be in trouble.

Ireland could potentially benefit, if it means banks and businesses here can do business in Iran despite a US trade embargo.

“As allies, we expect that the US will refrain from taking action to harm Europe’s security interests,” the three countries and the EU said in a letter to the Trump administration.

They argued that the agreement with Iran remains the best way to prevent a nuclear-armed Iran and that the 2015 accord can only survive if Tehran receives economic benefits in return.

“US secondary sanctions could prevent the EU from continuing meaningful sanctions relief to Iran,” they said.

The US said on May 8 that it was pulling out of the nuclear deal, called the Joint Comprehensive Plan of Action, and would start reimposing sanctions on Iran. US officials have warned European companies to wind down their Iranian operations.

The letter was sent by France, Germany, Britain, and the EU, signatories of the landmark 2015 accord where Iran agreed to strict limits and inspections on its nuclear activities in exchange for sanctions relief. The June 4 letter was sent to Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo, and was posted on the Twitter account of French Finance Minister Bruno Le Maire.

The letter asks for public confirmation that businesses such as pharmaceuticals and healthcare are exempt from secondary sanctions, and asks the US to grant exemptions for “key sectors” such as energy, automobiles, civil aviation, and infrastructure.

It also asks for exemptions to “maintain banking channels and financing channel with Iran”.

“As close allies we expect that the extraterritorial effects of US secondary sanctions will not be enforced on EU entities and individuals, and that the US will thus respect our political decision and the good faith of economic operators within EU legal territory,” the letter said.

Even before the US pulled out of the JCPOA, many European companies faced problems financing their Iranian investments because major banks didn’t want to risk US ire by working in Iran. (Bloomberg)

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