European foreign and finance leaders have sent a letter to senior officials in the Trump administration, requesting for them to exempt their companies in Iran from the fines announced at the end of May. The letter was sent specifically to the Treasury secretary, Steven Mnuchin, and Secretary of State Mike Pompeo.
The sanctions were first announced during a speech on Monday, May 21st. Pompeo publicly stated that European, Asian and American companies that are still present in Iran approximately six months from now will be charged with fines of several billions of dollars. Those sanctions would be followed by the arrest of their chief executives. He stated that “This sting of sanctions will be painful if the regime does not change its course from the unacceptable and unproductive path it has chosen to one that rejoins the league of nations.”
Several European leaders and representatives proposed for the U.S. to apply different sanctions to Iran and failed to convince him to do otherwise. The administration’s stated objective is to pressure Tehran, Iran’s capital city, into changing the current deal for an entirely new set of negotiations.
Before requesting for the exemption, the countries’ representatives stated in the letter:
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.”
Although Tehran has always denied its will of creating nuclear weapons, Iran has constantly shown indications for the contrary. Recently they are set to increase their sources of uranium in nuclear facilities and are prepared to build a factory for concentrated centrifuges if the deal is kept with Europe. While this is still inside the limits of the negotiations, some officials from Europe have expressed their concerns towards the proposition, since it “walks a line” between what they consider safe and dangerous for the deal.
Although Europe tried to find a way to keep its companies in Iran by using extended bank loans and funding sources, several banks stated that they cannot afford to dismiss the U.S.’ sanctions. The companies, which overall are very interested in keeping their presence in the American market, have lost their motivation for staying in Iran and will likely try to avoid the sanctions.
The countries proceded to request for the U.S. to exempt their companies of sanctions, as well as an explanation of which exact areas of business will be exempt from them and a request of exempting banks and bank accounts from them as well.
The U.S.’ procedure is striking, coming after the somewhat recent nuclear deal with Iran in 2015, which was followed by a guarantee from the U.S. that their companies would be safe in the then-unexplored Iranian market for at least a decade. Said promise has been apparently dismissed as the U.S. has exited the deal. Trump’s dismissal of other leaders’ advise, and the frequency in which he has been doing so recently, have complicated trans-Atlantic relations. European countries have shown themselves to be less and less willing to repeat the process every time a foreign-relations-related decision has to be taken by the president.
While foreign investment has doubled since 2015, its presence still less than 1% of its economy, which has made the recent procedures by the U.S. look more like a limitation of other nations’ international economic presence and power, rather than a punishment for Iran.
The companies’ departure would certainly signify a reduction in job opportunities for young Iranian citizens, which has caused discomfort for several employers. Europe has particularly shown its concern, since they would be directly affected by the change in Iran’s economy and employment rate, finding itself with raised migration and in need of improvement in regional security.
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