Europe Requests Exemptions from US Sanctions

June 6, 2018

European officials have requested exemptions from U.S. sanctions for European companies that have been doing business with Iran since the nuclear deal was implemented in January 2016. In a letter to Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin, the officials said they regretted the U.S. decision to withdraw from the Joint Comprehensive Plan of Action. The letter was signed by the foreign and finance ministers of Britain, France and Germany, as well as E.U. foreign policy chief Federica Mogherini. “In their current state, U.S. secondary sanctions could prevent the European Union from continuing meaningful sanctions relief to Iran,” they wrote. The remaining parties to the deal — China, Britain, France, Germany, and Russia — have expressed their willingness to continue to uphold the JCPOA despite the U.S. withdrawal. Iran has threatened to pull out if the economic benefits of the deal cannot be salvaged. 

 

The Europeans wrote that they “expect that the United States will refrain from taking action to harm Europe’s security interests.” In May, the United States said it would reimpose wide-ranging sanctions after 90-day and 180-day wind-down periods, potentially making European companies vulnerable to severe financial penalties. The following is the full text of the European letter addressed to Pompeo and Mnuchin.

 

June 4th, 2018

Dear colleagues,

We strongly regret the decision taken by the United States to withdraw from the Joint Comprehensive Plan of Action (JCPoA). We believe that the JCPoA, which was unanimously endorsed by the UN Security Council, is critical for protecting our collective security interests.

Even though the United States has decided to withdraw from the JCPoA, we are still convinced that the JCPoA is the best means through which we can prevent a nuclear-armed Iran. There appears to be no credible alternatives at this time. As such, an Iranian withdrawal from the JCPoA would further unsettle a region where additional conflicts would be disastrous. We share most of the concerns expressed by the US regarding the status of Iran’s nuclear programme after 2025, Iran’s ballistic missiles programme, and its destabilising actions in the region. We believe that preserving the content of the JCPoA is the best basis on which to engage Iran and address these concerns.

As allies, we expect that the United States will refrain from taking action to harm Europe’s security interests. The E3 and the EU are committed to undertaking strong efforts to continue sanctions relief to Iran in order to uphold our commitments to the JCPoA for as long as Iran remains in compliance with its requirements. As you know, the International Atomic Energy Agency has recently confirmed for the 11th time that this remains the case. We therefore ask for your assurances that the US will not take actions that might undermine the ability to do this in line with UNSCR 2231. In their current state, US secondary sanctions could prevent the European Union from continuing meaningful sanctions relief to Iran.

Building on our discussions at several occasions, as close allies we expect that the extraterritorial effects of US secondary sanctions will not be enforced on EU entities and individuals, and the United States will thus respect our political decision and the good faith of economic operators within EU legal territory.

In support of this, we specifically request you to:

- grant exemptions from US sanctions for EU companies that initiated or concluded

their contracts after JCPoA Implementation Day (16 January 2016).

- give public confirmation of areas of business that are exempt from US secondary sanctions, such as pharmaceuticals, healthcare; and grant exemptions to allow for economic relationships in key sectors, in particular in the fields of energy, automotive, civil aviation and infrastructure.

- grant exemptions to maintain banking channels and financing channels with Iran.

This notably includes maintaining links with the Central Bank of Iran as well as with the other Iranian banks that are not sanctioned by the European Union and the preservation of financial messaging services (SWIFT) to these banks.

- grant extended and adapted winding-down periods according to the necessary time to properly wind down affected projects for companies that may eventually choose to withdraw from Iran.

- prolong General License H (foreign subsidiaries of US companies to be able to continue business).

- reaffirm the exemption for Embassy bank accounts.

Please note that these first requests are preliminary and do not aim to cover those that OFAC will directly receive from European companies. Our authorities stand ready to support them in this process.

We are sure that, building on our steadfast cooperation, we will manage to find swift and efficient remedies to these urgent concerns. Therefore, the E3 and the EU would welcome a constructive approach on the issues set above. Following this, we are ready to continue working together with you on matters of shared concern.

 

Sincerely yours,

Bruno Le Maire

Jean-Yves Le Drian

Olaf Scholz

Heiko Maas

Philip Hammond

Peter Altmaier

Boris Johnson

Federica Mogherini

 

 

Click here for a PDF version.