Russia and China Show Off Ties With Putin Visit

On the first day of a trip to China, the Russian president receives the newly created Friendship Medal

Chinese President Xi Jinping congratulates Russian President Vladimir Putin after presenting him with the Friendship Medal in the Great Hall of the People in Beijing.
Chinese President Xi Jinping congratulates Russian President Vladimir Putin after presenting him with the Friendship Medal in the Great Hall of the People in Beijing. PHOTO: GETTY IMAGES

Russia and China have signed a raft of deals and pledged tighter coordination on security and foreign policy, underscoring how disputes with the U.S. are drawing the neighbors closer.

Russian President Vladimir Putin, on the first day of a three-day trip to China on Friday, and Chinese President Xi Jinping flaunted their relationship as Mr. Putin received the newly created Friendship Medal from his host in an extravagant ceremony.

“Cooperation with China is one of Russia’s top priorities and it has reached an unprecedented level,” Mr. Putin said.

Russia has increasingly looked to China for investment and as a political ally as the U.S. and its partners have piled sanctions on Moscow over its military adventures abroad and interference in Western countries.

Concerns in Beijing that President Donald Trump could forge closer ties with Mr. Putin and leave China as the odd one out among the world’s largest powers have dissipated as Washington and Moscow continue to feud. Now, Russia and China are coordinating in places of mutual interest like Iran and North Korea, presenting a united front in criticizing U.S. sanctions and tariffs, and deepening business ties.

On Friday, Russian and Chinese officials signed nuclear, space and transport deals, among others, as well as a statement condemning the Trump administration’s withdrawal from a nuclear deal with Iran and pledging further military and diplomatic cooperation.

The relationship has been buttressed by a close personal connection between the presidents. State broadcaster China Central Television aired an interview with the Russian leader on Wednesday in which he recalled celebrating a birthday with Mr. Xi over shots of vodka and sliced sausage.

“I haven’t established this kind of relationship or made similar arrangements with my foreign colleagues, but I have with Chairman Xi,” Mr. Putin said in the interview.

CCTV inserted the birthday comments in an online video entitled “A Kind of Internet Star Called Putin,” that also featured shots of him playing piano, strutting past applauding crowds and meeting—repeatedly—with Mr. Xi.

The Chinese leader, who recently engineered a scrapping of presidential term limits in China’s constitution, has said he and Mr. Putin are “similar in character.” He was quick to call with congratulations after the Mr. Putin rode a landslide election victory to his fourth term in March.

“Together we’ve ensured that Sino-Russian relations have withstood the test of global uncertainty and arrived at their best point in history,” he told Mr. Putin.

China has plowed billions into Russian companies owned by the Kremlin or people close to Mr. Putin, providing Russia with some relief from Western sanctions. But the economic relationship is an unbalanced one; aside from hydrocarbons and weapons, China imports little from Russia.

Chinese leaders continue to see Russia as a vital counterbalance to the U.S. in Asia and elsewhere, analysts say, especially after the U.S. national security strategy labeled them as America’s top adversaries.

Russia and China have increased military cooperation in recent years, holding joint drills in the North Pacific and the Baltic Sea last year.

“Russia increasingly plays on team China as a junior partner,” said Alexander Gabuev, an expert on Russia-China relations at the Carnegie Moscow Center. “Russia is punching above its weight in geopolitics and doing things that the Chinese are not capable or daring enough to do.”


Iran tells UN it will boost uranium enrichment capacity

Iran has informed the UN it plans to increase uranium enrichment within the limits of the 2015 deal with world powers. The move comes amid a growing uncertainty about the future of the landmark Iran nuclear deal.

A nuclear facility in south of Iran (BEHROUZ MEHRI/AFP/Getty Images)

Behrouz Kamalvandi, the spokesman for the Iranian Atomic Energy Organization, was quoted by state media as saying that a letter had been submitted to the UN’s International Atomic Energy Agency (IAEA) detailing Iran’s move.

Ali Akbar Salehi, director of Iran’s atomic program and a vice president, also confirmed that his country had started working on advanced centrifuges at its Natanz facility.

Salehi said the latest nuclear activities would remain within the framework of the 2015 nuclear deal between Iran and global powers.

“If conditions allow, maybe tomorrow night at Natanz, we can announce the opening of the center for production of new centrifuges” for uranium enrichment, Salehi said Tuesday, quoted by conservative news agency Fars.

Read more:

Benjamin Netanyahu and Angela Merkel play down Iran differences

Opinion: Khamenei’s empty threats over the Iran nuclear deal

Watch video12:24

US pulls out of Iran nuclear deal: DW’s Clare Richardson, political analyst Markus Kaim

The end of the JCPOA?

Observers have had differing reactions to the announcement, and with it, the fate of the Joint Comprehensive Plan of Action (JCPOA), often referred to as the Iran nuclear deal signed by China, France, Russia, the United Kingdom, the United States, Germany and the EU in 2015.

Maja Kocijancic, a spokeswoman for EU diplomatic chief Federica Mogherini, said that Iran’s steps did not constitute a breach of the agreement but added: “However, at this critical juncture, they will not contribute to build confidence in the nature of the Iranian nuclear program.”

Israeli Prime Minister Benjamin Netanyahu, who claimed this week that Iran was clearly aiming “to create an arsenal of nuclear bombs” to destroy his country, addressed the fate of the JCPOA at a press conference with French President Emmanuel Macron in Paris Tuesday: “I didn’t ask France to withdraw from the JCPOA because I think it is basically going to be dissolved by the weight of economic forces.”

President Macron used the opportunity to call on “everyone to stabilize the situation and not give into this escalation which would lead to only one thing: conflict.”

A reaction to Trump’s withdrawal?

In a speech on Monday, Iran’s Supreme Leader Ayatollah Ali Khamenei vowed to preserve the Islamic country’s nuclear program amid growing pressure from the US.

US President Donald Trump last month announced withdrawal from the 2015 Joint Comprehensive Plan for Action, approved by his predecessor Barack Obama. Apart from the US and Iran, the UK, Russia, France, China and Germany had also signed the accord.

Iran insists it has the option of resuming industrial-scale enrichment following the US exit from the deal.

French President Emmanuel Macron has been pushing for a new Iran nuclear deal through which the US and Europe could tackle Trump’s concerns about Tehran’s nuclear program and beyond. A new accord could also take into account Iran’s ballistic missile program, and stop Tehran’s activities in Syria and Yemen.

But the European Union believes the existing Iran nuclear deal is effective and has largely curtailed the Islamic country’s nuclear activities.

Read more:

Iran, EU aiming to keep the nuclear deal alive

Iran lists tough conditions for Europe to save nuclear deal

js,shs/rc  (AFP, Reuters, AP)


Germany and partners meet in Vienna to discuss Iran nuclear deal

As the US renews sanctions against Iran, officials from China, Russia, France, the UK and Germany met in the Austrian capital to discuss the nuclear accord. Iran says it wants to keep doing business with the world.

Representatives of the Iran deal signatories gathered in Vienna (Getty Images/AFP/H. Punz)

In the aftermath of the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA), the Iran nuclear accord of 2015, the remaining signatories met for the first time on Friday in Vienna to try to save the deal.

China, Russia, France, the UK and Germany have expressed their commitment to maintain the JCPOA, but with new US promises to unveil “the strongest sanctions in history,”a solution has not yet been found on how to minimize the collateral damage that international business would face as a result of US sanctions.

Read more: Experts weigh in on Trump’s reimposed sanctions on Iran

Iranian leaders have also expressed their commitment to the deal and to abiding by strict curbs on their nuclear program, but only if the remaining powers are able to ensure that Iran can keep doing business with the world, despite US sanctions.

“Our main concern is the banking system, insurance and transportation,” Iran’s deputy foreign minister Abbas Araghchi said.

Helga Schmid, Secretary General of the European External Action Service (EEAS), the EU’s diplomatic service, chaired the meeting in Vienna on Friday:

Helga Schmid


In Vienna, chairing the 9th meeting of the Joint Commission of the deal with E3/EU+2 and . Special participation of DG Amano. 11th IAEA report published yesterday confirming once again Iran’s compliance with its commitments under the .

Iran awaits a sanctions relief ‘package’

In Vienna, European powers agreed to present Iran with a plan to offset the fallout of US withdrawal from the deal and the renewed sanctions by May 31. Iranian deputy minister Abbas Arghchi said that Iran will then decide whether to stay or withdraw from the JCPOA, based on what the European powers propose.

“For the time being we are negotiating… to see if they can provide us with a package which can actually give Iran the benefits of sanctions-lifting and then the next step is to find guarantees for that package and we need both legal and political commitments by the remaining participants in the JCPOA (deal),” Araghchi told reporters.

“We got the sense that Europeans, Russia and China… are serious and they recognize that the JCPOA’s survival depends on the interests of Iran being respected,” Araghchi added.

The European Union has already launched legal mechanisms to shield European businesses with Iranian ties from US sanctions. The bloc is currently working on measures such as banning EU-based companies from complying with re-imposed US sanctions and urging governments to make money transfers to Iran’s central bank to avoid fines.

Read more: Iran nuclear deal: Germany’s special role and plans

Optimism after the talks

A senior Iranian official had expressed his country’s worry prior to the meeting, saying that currently, the JCPOA “is in the intensive care unit, it’s dying.”

But Araghchi emerged from the talks expressing some optimism about the possibility that a solution could be found: “I am more confident than before the meeting,” he told reporters.

Russian delegate Mikhail Ulyanov echoed Araghchi’s tone. “We have all chances to succeed, provided that we have the political will.”

Ulyanov commented on the US exit from the deal, affirming that the JCPOA was a “major international asset” that was not the property of the US, but instead “belongs to the whole international community.”

jcg/jm (Reuters, dpa, AFP)

Each evening at 1830 UTC, DW’s editors send out a selection of the day’s hard news and quality feature journalism. You can sign up to receive it directly here.


Pompeo unveils US Iran plan: Economic strife, break with EU

The secretary of state has outlined a hard-line Iran strategy that is likely to deepen the chasm between the EU and US. Analysts and former US officials say the plan is incoherent and dangerous.

Mike Pompeo US Außenminister (picture-alliance/AP Photo/J. S. Applewhite)

The Trump administration threatened Iran with “unprecedented financial pressure” on Monday, issuing a laundry list of harsh requirements demanding Tehran change its foreign and domestic policies.

In a speech touted to outline the administration’s strategy toward Iran, Secretary of State Mike Pompeo promised “the strongest sanctions in history” should Tehran not buckle to US demands.

Pompeo’s speech comes nearly two weeks after President Donald Trump pulled out of the Iran nuclear deal and reimposed sanctions lifted under the Joint Comprehensive Plan of Action (JCPOA), the 2015 accord that Iran signed with Russia, China, the United States, Britain, France and Germany.

Read more: What is the Iran nuclear deal?

“The sting of sanctions will only grow more painful if the regime does not change course from the unacceptable and unproductive path it has chosen for itself and the people of Iran,” Pompeo said at the conservative Heritage Foundation think tank in Washington, DC.

Pompeo said the United States would not try to renegotiate the JCPOA. Instead, any new deal would require Iran to meet 12 demands, including halting its ballistic missile program and ending interventions in Syria and Yemen, as well as wide-ranging concessions on its civilian nuclear program. Pompeo added that the United States and its partners in the Middle East would “crush” Iranian operatives and regional allies such as the Lebanese Shiite group Hezbollah.

Iran shoots back

Several hours later, Iran President  Hassan Rouhani decried Pompeo’s threats, saying Washington had no right to make decisions for his country.

“All world countries want independence in their decisions, and the Americans may advance their agenda in some places through pressure, but logic does not accept them making decisions for the world,” Rouhani was quoted by state broadcaster Press TV as saying. “Who are you to decide for Iran and the world?”

Iran’s top diplomat, Javad Zarif, described Pompeo’s plan as “regression to old habits.” In a Twitter post, he chided the Trump administration  for being “imprisoned by
delusions, failed policies and dictated to by corrupt special interest.”

Javad Zarif


US diplomacy sham is merely a regression to old habits: imprisoned by delusions & failed policies—dictated by corrupt Special Interest—it repeats the same wrong choices and will thus reap the same ill rewards. Iran, meanwhile, is working with partners for post-US JCPOA solutions.

Not a strategy

Analysts and former US officials said the Trump administration revealed that it had little desire for a diplomatic solution, but looked rather to be pursuing a policy of economic pressure designed to topple the Iranian regime.

“This isn’t a strategy. It is an unprioritized and internally incoherent wish list,” said Jarrett Blanc, who was coordinator for implementation of the agreement at the State Department under the Obama administration. “It is a fantasy of regime change without the resources or leverage. It is, obviously, also an insult to our European allies.”

Read more: Iran’s military power

Washington’s hard-line policy of economic warfare is likely to further strain relations with allies already angry at Trump for withdrawing from the nuclear deal despite their lobbying and Iran’s compliance.

EU leaders are now scrambling to ensure that Iran receives the economic benefits it was promised in order to remain in the deal. Among other things, they are considering implementing a blocking statutethat would protect EU firms that do business with Iran and another measure to have EU governments make direct money transfers to Iran’s central bank.

Pompeo made it clear that the United States expects the support of regional and global allies, including the European Union. Though he said he believed that the EU would follow the United States because they shared “values,” he also doubled down on threats to target European entities doing business with Iran.

However, EU Foreign Policy Chief  Federica Mogherini accused Pompeo failing to show how pulling out of the nuclear accord would make the region safer or “how it puts us in a better position to influence Iran’s conduct in areas outside the scope of the JCPOA.”

Mogherini went on to stress that the EU would remain committed to the deal as long as Iran abided by its nuclear-related commitments, “as it is doing so far.”

Read more:  European allies struggle to curb impact of US sanctions 

Watch video01:50

EU unites against Trump over US sanctions on Iran

‘Fissure,’ ‘trans-Atlantic rift’

Ali Vaez, the director of the Iran Project at the International Crisis Group, said the Trump administration had made it clear that EU leaders had wasted their time trying to convince the president to remain a party to the deal, and that there was now a “fissure in the middle of the Atlantic.”

“Its message to Europe is now clear: ‘Join me in changing not Iran’s behavior, but its regime,'” Vaez said. “Pompeo’s speech further proved that there is no middle ground to be explored with the Trump administration. Europe should take its fate in its own hands.”

The US strategy appears to be to apply economic pressure that will create domestic political instability in Iran that will challenge the regime directly. However, unilateral US sanctions are unlikely to be as effective as the international measures that had brought Iran to the table to negotiate the JCPOA.

Those international sanctions were punishing, but they were only effective because of their international scope. For China, Russia and the European Union, going back to those sanctions is a nonstarter so long as Iran complies with the nuclear accord.


Watch video00:27

German chancellor expresses EU support for Iran nuclear deal at meeting with Putin.

Read more: No clear benefit from Trump’s reimposing sanctions on Iran

“The idea of reapplying sanctions, which will hammer the Iranian people under the guise of helping them, is not only deeply incoherent, it also directly undermines the chosen policy approach of America’s European allies,” said Esfandyar Batmanghelidj, the founder of the Europe-Iran Forum, a business network.

“Europe is continuing to bet on dialogue and engagement, including economic engagement, and is getting results, so far keeping the Iranians in the agreement after Trump violated and abrogated the deal,” he said. “The trans-Atlantic rift is only getting deeper.”

Meanwhile, analysts said the US’s violation of the JCPOA had only reinforced perceptions in Iran that the United States cannot be trusted. The Trump administration’s calls for Iranians to rise up against the country’s leaders and veiled threats of regime change will also harden the Iranian leadership’s resolve.

“Even if the US could inflict maximum pressure on Tehran, such onerous measures are unlikely to persuade an Iranian leadership seemingly convinced that the only thing more dangerous than this threat would be to surrender to it,” Vaez said. “The Trump administration might believe that it has devised a new Iran strategy, but, in the eyes of the Iranian leadership, this is par for the course.”

Every evening at 1830 UTC, DW’s editors send out a selection of news features. You can sign up to receive it directly here.

Watch video04:13

What is it like doing business in Iran?


Iran Uses Nuclear Pact as Bargaining Chip With EU Over U.S. Sanctions

Tehran’s suggestion could drive wedge between Washington and Brussels

EU Energy Commissioner Miguel Arias Canete was in Tehran with a plan to prevent Iran’s economic isolation and secure its commitment the nuclear accord.
EU Energy Commissioner Miguel Arias Canete was in Tehran with a plan to prevent Iran’s economic isolation and secure its commitment the nuclear accord. PHOTO: ATTA KENARE/AGENCE FRANCE-PRESSE/GETTY IMAGES

TEHRAN—Iran vowed to uphold the pact curbing its nuclear activities if the European Union can offset renewed U.S. sanctions, senior officials here said, advocating an approach that would widen a deepening schism between Washington and Brussels.

The EU has redoubled its efforts to salvage the 2015 deal in the wake of President Donald Trump’s recent withdrawal of the U.S. The bloc dispatched Energy Commissioner Miguel Arias Canete to Tehran over the weekend with a plan to prevent Iran’s economic isolation and secure its commitment the nuclear accord.

The EU’s plan faces daunting obstacles. The bloc would have to continue oil and gas purchases to keep Iran’s economy afloat, but do so by making payments outside of the U.S.-dominated global financial system and shielding European firms from U.S. sanctions.

“We hope that what they have presented to us, it will be materialized,” Iran’s nuclear chief, Vice President Ali Akbar Salehi, said in an interview with Western journalists. He urged the EU to lead the fight against Washington to preserve the deal, saying Iran would honor its commitments if EU efforts broadly offset U.S. sanctions. “The ball is in their court,” he said of the EU.

Mr. Canete said the agreement’s “economic dividends” for Iran’s halting nuclear-weapons activities are at stake. Mr. Salehi, in a thinly-veiled warning to world powers concerned that Iran wants to build nuclear weapons, said the deal’s demise would give Tehran a “free hand in doing whatever we want.”

The EU’s efforts to safeguard the accord despite the U.S. add to growing clashes between Brussels and Washington. Secretary of State Mike Pompeo this week plans to outline Washington’s road map for starting negotiations on a new agreement with Iran.

Mr. Canete said at a press briefing with Mr. Salehi that the EU “deeply regrets” U.S. withdrawal from the Iran agreement and the EU “is determined to preserve the deal.”

In addition to clashing over the Iran accord, Brussels is threatening a trade war with the U.S. if Mr. Trump doesn’t exempt it from his steel and aluminum tariffs.

Yet Europe’s ability to sidestep U.S. sanctions are limited and untested.

The risk of an exodus by major European companies from Iran cast a pall over EU-Tehran discussions, after French energy giant Total SA said that without a U.S. waiver it may need to exit a $1 billion Iranian natural-gas deal.

“Europe failed in its first test,” Tehran Times Editor in Chief Mohammad Grader wrote Saturday. “They have practically been subject to Washington’s decisions.”

The EU is now updating a never-used 1996 law, enacted against U.S. sanctions against Cuba, Iran and Libya, known as the blocking statute. The measure seeks to ban European companies from complying with extraterritorial U.S. sanctions, allows firms to collect damages arising from American restrictions and shields them from adverse foreign-court rulings. But most experts say it isn’t legally watertight.

A revised blocking statute may help small- and midsize European companies that have few U.S. investments or business links to conduct business in Iran despite Washington’s measures, EU and Iranian officials said. Similarly, the EU plans to let the European Investment Bank, its financing arm, finance activities in Iran by opening credit lines to EU small businesses.

Yet those steps provide scant relief for Europe multinationals active in the U.S., including energy firms Total, Wintershall AG and Royal Dutch Shell PLC, and shipping giant Maersk Tankers AS.

“The bite of the U.S. sanctions is bigger,” an EU diplomat said.

The EU is also deploying confidence-building measures, such as energy cooperation and financial assistance, and potentially letting EU governments facilitating oil payments to Iran via their central banks with one-off transfers. Details of such transactions are yet to be agreed and risk U.S. ire.

“We expect (Europe) to help us” get paid for oil exports, said Iranian Oil Minister Began Zanganeh said in an interview.

Mr. Trump’s decision renews challenges for Iran to meet its energy goals, including ramping up production to 4.2 million barrels a day from 3.8 million currently and attracting $200 billion in investments, Mr. Zanganeh said.

Mr. Zanganeh said Chinese and Russian energy firms’ interest in Iran’s larger oil and gas fields, coupled with smaller European firms that can invest up to $1 billion without getting tripped by U.S. sanctions, would largely alleviate the impact of sanctions. Iran last week unveiled a 10-year oil-production deal with London-based Pergas International Consortium PLC, snubbing renewed U.S. pressure.

“This extraterritorial sanction from the U.S. against Iran will have an effect” by slowing investment, Mr. Zanganeh said. “But it will not stop us.”

EU annual trade and investment with Iran nearly tripled as of last year to €21 billion ($25 billion) compared with 2015, with European icons including French car maker Renault SAand plane-builder Airbus SA joining energy firms to strike deals.

Brussels is already lobbying Washington for waivers to protect major European firms’ business interests in Iran, an EU official said. The push signals the EU’s reliance on trans-Atlantic relations to soften some of Mr. Trump’s blows against Iran and its partners, even as Europe tries to go it alone.

“For sure there are clear difficulties with the sanctions,” Mr. Canete said. Still, the EU “will engage with the United States… a key partner of the European Union and an ally.”

Write to Emre Peker at


Trump administration orders more sanctions on Iran after quitting the nuclear deal

An anti-U.S. protest in Tehran, Iran.
An anti-U.S. protest in Tehran, Iran. (AFP / Getty Images)

The Trump administration is ratcheting up sanctions on Iran following the president’s withdrawal from the 2015 international accord that curbed Tehran’s ability to develop nuclear weapons.

The Treasury Department on Thursday blacklisted two individuals and five companies in the Middle East, Africa and Europe that it said were financing the Iran-backed Hezbollah militant group based in Lebanon.

The sanctions mean any assets that the persons or companies might have in the United States or in U.S. institutions will be frozen, and Americans cannot do business with the targets.

Treasury Secretary Steven T. Mnuchin identified one of the individuals as Mohammad Ibrahim Bazzi, whom he described as a financier who uses drug trafficking deals and money laundering to help fund Hezbollah.

“This action highlights the duplicity and disgraceful conduct of Hezbollah and its Iranian backers,” Mnuchin said. “This administration will expose and disrupt Hezbollah and Iranian terror networks at every turn.”

This was the administration’s third punitive action this week against Iran or entities associated with the country, including the blacklisting on Tuesday of Valiollah Seif, governor of the Central Bank of Iran.

In that case, non-Americans around the world as well as Americans were barred from doing business with him through a mechanism known as secondary sanctions.

The sanctions come in the wake of Trump’s announcement on May 9 that he was pulling the United States out of the nuclear deal with Iran. Trump said the accord was not sufficiently tough on Tehran and said he would reimpose a raft of economic penalties aimed at tightening pressure on Tehran.

The move estranged the Trump administration from England, France and Germany, which also signed the nuclear deal and still support it.


EU to reactivate ‘blocking statute’ against US sanctions on Iran for European firms

EU Commission President Jean-Claude Juncker announced that the bloc plans to kickstart a 1996 law that would prohibit European companies from complying with US sanctions on Iran.


Watch video00:24

Juncker: EU will reactivate ‘blocking statute’

European Union Commission President Jean-Claude Juncker announced Thursday that the bloc plans to reactivate a law that would seek to block European companies from complying with any sanctions the US would reintroduce against Iran.

Juncker’s announcement came during the second day of an EU meeting in the Bulgarian capital, Sofia, which had already been marked by sharp criticism from European leaders over American President Donald Trump’s decision to pull the US out of the 2015 Iran nuclear deal.

What Juncker said:

  • In Thursday’s announcement, Juncker said: “As the European Commission we have the duty to protect European companies. We now need to act and this is why we are launching the process to activate the ‘blocking statute’ from 1996.”
  • Juncker said that the law would be launched Friday morning at 10:30 a.m. local time (0730 GMT).
  • He added that European leaders “also decided to allow the European Investment Bank to facilitate European companies’ investment in Iran” and said the Commission would continue to cooperate with Iran.

Read more: Germany to help its firms in Iran after US pullout from nuclear deal

Mina Andreeva


.@JunckerEU “Need to protect our companies, notably SMEs. @EU_Commission will start work tomorrow on amending the Blocking Statute to include US Iran sanctions. Aim is to get it in place before sanctions kick in on 6 August. We need to do it and we will do it.”

What is the 1996 blocking statute?

  •  A blocking statute is a law enacted in a local jurisdiction that attempts to hinder application of a law made by a foreign jurisdiction.
  • The 1996 legislation protects “against the effects of the extra-territorial application of legislation adopted by a third country.”
  • It was originally developed to get around a US trade embargo on Cuba and sanctions related to Iran and Libya, though it was never enacted because the disagreements were settled politically.
  • In the current proposed application, the law would attempt to shield European companies that do business with Iran from future US sanctions by prohibiting the companies from respecting US sanctions.
  • It also would not recognize any court rulings that enforce the American-issued penalties.

What effect could the blocking statute have?

  • In order to have any effect, the blocking statute would have to be updated to include US nuclear-related sanctions on Iran — a lengthy process that would require consent from the EU’s 28 member states.
  • The law’s potential economic effect remains unknown, since it was never used during the Cuban embargo.
  • In addition, its regulatory language is nebulous, and the measures it lays out to block European companies’ from bowing to US sanctions could prove difficult to enforce, in part due to the international banking system and the significance of the US in international financial markets.
  • Many European governments see the blocking statute as a political tool, which could put pressure on the US to walk away from punitive financial punishments.

    Watch video01:23

    EU firms in Iran mull Brussels’ blocking statute

How have European companies responded?

  • German-headquartered insurance firm Allianz and Danish shopping company Maersk have already said they plan to close operations in Iran in order to avoid getting hit by reintroduced US sanctions.
  • The 1996 legislation leaves it up to each EU member state “to determine the sanctions to be imposed in the event of breach of any relevant provisions of this Regulation,” adding that such sanctions “must be effective, proportional and dissuasive.”
  • European companies with large operations in the US are putting pressure on their governments to grant them individual waivers.

    Bernd Thomas Riegert@RiegertBernd

    wants to stand up against and circumvent possible sanctions against EU companies. Will that impress Trump? Companies like Total and Maersk already chicken out

What is the Iran nuclear deal? 

The 2015 Iran nuclear deal was a pact negotiated by Iran, China, Russia, Germany, France, and Britain, as well as the EU and the US, that authorized the lifting of economic sanctions against Tehran in exchange for the dismantling of its nuclear program and compliance with international atomic regulations.

Read more: What is the Iran nuclear deal?

What did President Trump decide to do?

The president decided that he would withdraw the US from the accord, which he referred to as “flawed,” thereby raising the specter of renewed sanctions against companies that do business with Iran.

Read more: US ambassador to Germany Richard Grenell vows ‘no trade war’ with EU

What was the reaction to Trump’s decision?

The deal’s other signatories have pledged to continue their commitment to the deal and encouraged Iran to uphold its responsibilities as well. EU foreign ministers met their Iranian counterpart earlier this week to discuss how they could keep the nuclear deal alive without the US. In particular, both sides have discussed how to keep revenue flowing into Iran in light of pending sanctions.

Read more: How will Iran’s economy hold up if sanctions return?

cmb/msh (dpa, Reuters, AP)

Watch video01:20

Trump: ‘The US will withdraw from the Iran nuclear deal’