The European Union says it will launch this week the process of activating a regulation to soften the impact of U.S. sanctions on European firms doing business in Iran.
The May 17 announcement comes after President Donald Trump said last week that the United States would abandon the 2015 nuclear agreement between Iran and world powers and reimpose sanctions lifted as part of the deal -- despite the European powers' sustained efforts to convince Washington to continue to adhere to it.
The U.S. Treasury Department has put European businesses on notice that they have 90 days to wrap up most business with Iran before the renewed U.S. sanctions take effect.
Speaking after a meeting of EU leaders in Sofia, Bulgaria, European Commission President Jean-Claude Juncker told a news conference that the EU will launch on May 18 the process of activating its so-called blocking statute.
“We have to protect our companies. We have to protect mainly those who bona fide -- mainly small and medium-sized enterprises -- did invest in Iran, and we cannot leave them alone,” he said.
The blocking regulation, which was originally crafted in 1996 in response to U.S. sanctions against Cuba, makes it illegal for EU companies to comply with laws with extraterritorial application.
Juncker said the EU leaders also decided to allow the European Investment Bank to facilitate European companies' investment in Iran and added that the European Commission itself will “maintain its cooperation” with the country.
The EU hopes Tehran will continue to comply with the Joint Comprehensive Plan of Action (JCPOA) agreed by Iran and six world powers -- the United States, Britain, France, Germany, Russia, and China. The agreement obliged Tehran to curb its nuclear program in exchange for sanctions relief.
But Trump pulled out on May 8, claiming that Iran had violated the “spirit” of the deal by financing militant violence in the Middle East and by continuing to test ballistic missiles.
European Council President Donald Tusk said the European Union’s leaders “agreed unanimously” to stick to the Iran deal “as long as Iran remains fully committed to it.”
Earlier in the day in Sofia, German Chancellor Angela Merkel said EU countries were aware that the 2015 nuclear agreement is "not perfect," but said it should be preserved.
"We should remain in this agreement and conduct further negotiations with Iran on the basis of other issues, such as the ballistic-missile program," Merkel said.
Meanwhile, French President Emmanuel Macron said that European companies should continue to have the freedom to do business with Iran.
"International companies with interests in many countries make their own choices according to their own interests. They should continue to have this freedom," Macron said on arriving in the Bulgarian capital.
He was speaking after the world's largest container shipping firm, A.P. Moller-Maersk, and the French oil giant Total announced they were withdrawing from Iran to observe the newly reimposed U.S. sanctions.
Total said it will pull out of a billion-dollar project to develop Iran's huge South Pars natural-gas field by November 4 unless it can secure an exemption from the renewed sanctions imposed as a result of Trump's decision.
Total was the first major European company to resume business in Iran after sanctions were lifted in 2016 in exchange for curbs on Iran's nuclear activities.
Tehran has repeatedly hailed the Total project as a symbol of the nuclear accord's success at helping to revive and modernize Iran's critical oil and gas industry, which drives the country's economic growth and generates much of the government's revenues.
The U.S. Treasury Department gave foreign companies notice last week that they have three to six months to "wind down" their business with Tehran before they face possible penalties for violating U.S. sanctions.
The United States in the past has fined European and Asian banks and businesses billions of dollars for violating its sanctions. It most recently imposed such stiff penalties on China's ZTE technology giant that the firm has said it will be forced to go out of business unless it gets a reprieve.
The U.S. sanctions essentially force most global companies to give up doing business in Iran if they want to continue operating in the United States.
Germany's Allianz, an insurance giant with a major presence in the United States, said it intends to wind down what it called its "totally minimal" business in Iran.
Iran has called on European leaders to provide "guarantees" that the economic benefits from the deal will continue to flow, warning that it may start enriching uranium again if it no longer stands to gain economically from continuing to honor the nuclear deal.