France wants the EU to toughen its stance in protecting European companies against any US sanctions

 Reported by HPMM Group according to FINANCIAL TRIBUNE ; France is looking to see if the European Union could compensate European companies that might be facing sanctions by the United States for doing business with Iran, French Finance Minister Bruno Le Maire said on Sunday.

Le Maire referred to EU rules going back to 1996, which he said could allow the EU to intervene in this manner to protect European companies against any US sanctions, adding that France wanted the EU to toughen its stance in this area, Reuters reported.

In 1996, when the United States tried to penalize foreign companies trading with Cuba, the EU forced Washington to back down by threatening retaliatory sanctions.

The blocking statute bans any EU company from complying with US sanctions and does not recognize any court rulings that enforce American penalties. But, according to Reuters, it has never been used and is seen by European governments more as a political weapon than a regulation because its rules are vague and difficult to enforce, serving mainly as a warning to the United States.

European firms doing business in Iran face sanctions from the United States after US President Donald Trump withdrew from a 2015 nuclear deal with Iran.

“Are we going to allow the United States to be the economic policeman of the world? The answer is no,” Le Maire told C News TV and Europe 1 radio on Sunday.

His comments come as larger European firms have already started signaling their intent to pullback from Iran. French energy group Total, which arguably signed the most symbolic contract between Iran and western powers since 2016, said on Wednesday it might quit its multibillion-dollar gas project in Iran unless it secured a waiver from the sanctions.

Small- and medium-sized enterprises may look to work with Asian affiliates as an option of staying in Iran.

“In the short run, the easiest solution would be for European states to cover the cost of American sanctions imposed on certain companies,” said Matthieu Etourneau, managing director of the French Center for Business in Tehran, at a conference at the French Institute for International Relations.

French President Emmanuel Macron said on Thursday Europe would try to protect its companies doing business with Iran from US sanctions, reimposed on Iran, but said giants like Total would make their own choices.

“International companies with interests in many countries make their own choices according to their own interests. They should continue to have this freedom,” he said upon arriving for a second day of EU leaders’ talks in the Bulgarian capital.

“But what is important is that companies, and especially medium-sized companies which are perhaps less exposed to other markets, American or others, can make this choice freely.”

The European Commission is proposing that EU governments make direct money transfers to Iran’s central bank to avoid US penalties, an EU official said, in what would be the most forthright challenge to Washington’s newly reimposed sanctions.

The step, which would seek to bypass the US financial system, would allow European companies to repay Iran for oil exports and repatriate Iranian funds in Europe, a senior EU official said, although the details were still to be worked out.

“Commission President Jean-Claude Juncker has proposed this to member states. We now need to work out how we can facilitate oil payments and repatriate Iranian funds in the European Union to Iran’s central bank,” said the EU official, who is directly involved in the discussions.

The US Treasury announced on Tuesday more sanctions on officials of the Central Bank of Iran, including Governor Valiollah Seif. But the EU official said the bloc believes that does not sanction the central bank itself.