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Europeans Move To Protect Firms From Renewed U.S. Sanctions On Iran

French Finance Minister Bruno Le Maire (left) and German Economy Minister Olaf Scholz

European nations are moving to protect their companies from a resumption of stiff U.S. sanctions on firms doing business in Iran, in a critical part of their bid to keep the Iranian nuclear deal alive and ensure it continues to benefit Iran's economy.

British Prime Minister Theresa May's spokeswoman said U.S. President Donald Trump agreed in a phone call late on May 11 that talks are needed to discuss how the renewed U.S. sanctions on Iran's oil and banking sectors will affect European companies operating in the country under terms of the 2015 nuclear deal that Trump has now abandoned.

Britain, France, and Germany -- along with Russia and China -- all have said they remain committed to honoring the deal and believe it remains the best way to ensure Iran does not resume development of nuclear weapons.

Iranian President Hassan Rohani also has said Iran will continue honoring the deal's curbs on its nuclear activities, but only so long as Iran's economy continues to benefit from the sanctions relief that was authorized under the deal and which enabled European companies to start doing business in Iran again in 2016.

Rohani is asking the European powers for guarantees that the benefits will continue in the future -- something that is possible only if European businesses are able to continue operating in Iran.

Germany and France, in particular, have established significant trade links with Iran. Both countries have asked the U.S. Treasury Department to consider exempting their companies from the sanctions.

If the United States continues to threaten fines against companies for violating the sanctions, France's Finance Minister Bruno Le Maire said on May 10 that European Union states would propose sanctions-blocking measures to the European Commission to protect their companies.

"Do we accept extraterritorial sanctions? The answer is no," Le Maire told reporters in Paris, adding that France won't accept the "vassalization of Europe" by U.S. officials bent on reimposing sanctions on Iran.

Le Maire said he was seeking U.S. exemptions for French countries already present in Iran, including Renault, Total, Sanofi, Danone, and Peugeot.

He said he told U.S. Treasury Secretary Steven Mnuchin that if he doesn't exempt the French companies, he should consider a so-called grandfather clause for deals struck in Iran since 2015 or an extension of the 90-day period the Treasury Department has set to wind down operations in Iran.

German Finance Minister Olaf Scholz had also asked for exemptions to help German companies, Handelsblatt newspaper reported.

Much is at stake for both countries. French exports to Iran doubled to 1.5 billion euros last year, driven by sales of aircraft and automobile parts, according to customs data.

Exports of German goods to Iran rose by around 400 million euros to 3 billion euros. Around 120 German firms have operations with their own staff in Iran, including industrial giant Siemens, and some 10,000 other German companies trade with Iran.

But while France said it was ready to fight the U.S. sanctions with European countermeasures, German officials said each company will have to examine the legal implications of continuing business in Iran and make their own decision about whether to stay in Iran or honor the U.S. sanctions.

"We are ready to talk to all the companies concerned about what we can do to minimize the negative consequences" of the U.S. sanctions, German Economy Minister Peter Altmaier told Deutschlandfunk radio. "That means, it is concretely about damage limitation."

The new U.S. ambassador in Berlin, Richard Grenell, has been warning German companies to heed the U.S. sanctions. He was quoted by Germany's Bild newspaper as saying firms should question the morality of doing business with Iran.

"Germany, France, and Britain -- the 'EU3' -- say themselves that Iran poses a threat. Do they want to do business with a threat?" he asked.

Iran was also seeking information on May 10 about the impact of U.S. sanctions on European businesses. It asked Europe's Airbus plane manufacturer to announce whether it will go ahead with a deal to sell Iran dozens of passenger planes following the U.S. pullout.

That appears unlikely after Mnuchin said this week that he intends to revoke licenses for the Airbus sales as well as planned plane sales by U.S. manufacturer Boeing.

Meanwhile, Russia moved on May 10 to accelerate planned economic ties with Iran. The Kremlin said that Russia and its ex-Soviet allies in the European Economic Union will sign a free-trade pact with Iran next week.

The grouping includes Kazakhstan, Belarus, Armenia, and Kyrgyzstan.

With reporting by Reuters and AP