European officials said the process of renewing a sanctions-blocking measure to protect European businesses in Iran had begun Friday, after the United States pulled out of the Iran nuclear accord and reimposed sanctions on Tehran.
The Commission said in a statement it had "launched the formal process to activate the Blocking Statute by updating the list of US sanctions on Iran falling within its scope," referring to an EU regulation from 1996.
The EU's blocking statute bans any EU company from complying with US sanctions and does not recognise any court rulings that enforce American penalties. It was developed when the United States tried to penalise foreign companies trading with Cuba in the 1990s, but has never been formally implemented.
EU officials say they are revamping the blocking statute to encompass President Donald Trump's May 8 decision to revive Iran-related sanctions, after the expiry of 90- and 180-day wind-down periods, including sanctions aimed at Iran's lifeblood oil sector and transactions with its central bank.
The Commission said the EU measure would come into force within two months, unless the European Parliament and EU governments formally rejected it, but that it could also be activated sooner if there was strong political support.
Once Iran's top trading partner and its second-biggest oil customer, the EU has sought to pour hundreds of billions of euros into the Islamic Republic since the bloc, along with the United Nations and United States, lifted blanket economic sanctions in 2016 that had hurt the Iranian economy.
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Iran's exports of mainly fuel and other energy products to the EU in 2016 jumped 344 per cent to 5.5 billion euros compared with the previous year.
EU investment in Iran, mainly from Germany, France and Italy, has jumped to more than 20 billion euros since 2016, in projects ranging from aerospace to energy.
Other measures proposed by the Commission, the EU executive, include urging EU governments to make transfers to Iran's central bank and to start the legal process of allowing the European Investment Bank to lend to EU projects in Iran.
The Commission said it would also keep aid money flowing to Iran, part of its efforts to uphold Europe's side of the 2015 nuclear deal, which offers sanctions relief in return for Tehran shutting down its capacity, under strict surveillance by the UN nuclear watchdog, to stockpile enriched uranium for a possible atomic bomb.
