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Europe stares down Trump over Iran

The EU won’t walk away from the Iran nuclear deal even if Donald Trump wants to kill it, the bloc’s top diplomat said.

“We reaffirmed together our resolve to continue to implement the nuclear deal in all its parts in good faith and in a constructive atmosphere,” Federica Mogherini told a press conference late Tuesday after talks with the foreign ministers of France, Germany, the U.K. and Iran.

“We are working on finding a practical solution,” the EU’s foreign policy chief said. “We are talking about solutions to keep the deal alive.”

The message from Europe came just over a week after U.S. President Donald Trump announced he would pull out of the 2015 deal, officially known as the Joint Comprehensive Plan of Action, under which Iran pledged to limit its nuclear program in exchange for sanctions relief.

The move by Trump dismayed key European allies, who had spent months urging Trump not to walk away from the agreement. It also came over the opposition of China and Russia, which are also party to the 2015 deal.

“We together regretted the withdrawal of the United States” — Federica Mogherini

Supporters of the deal say that Iran has complied with its requirements, and insist it is the only realistic alternative to military force as a means of halting Tehran’s nuclear program. But Trump has described it as  a “terrible deal.”

On Tuesday, the EU reaffirmed its commitment to the pact.

“We together regretted the withdrawal of the United States,” Mogherini said, speaking on behalf of Iran’s Javad Zarif, France’s Jean-Yves Le Drian, Germany’s Heiko Maas and the U.K.’s Boris Johnson.

The Italian diplomat’s suggested method of keeping the deal alive seems to be increased cooperation with Iran.

French Foreign Minister Jean-Yves Le Drian and Mogherini during talks with Iran | Olivier Matthys/AFP via Getty Images

“The lifting of nuclear-related sanctions and the normalization of trade and economic relations with Iran constitute essential parts of the agreement,” she said, “and we agreed to this end to deepen our dialogue at all levels.”

This would include, Mogherini said, “maintaining and deepening economic relations with Iran” as well as the continued sale of Iranian energy, “effective banking transactions” and continued transport links.

She said there would be “protection of European Union economic operators and … last but not least, the further development of a transparent, rules-based business environment in Iran.”

On Wednesday, EU leaders will hold a dinner before a European Council meeting in Sofia at which they will discuss options to protect European businesses. Mogherini said she will brief the leaders on the latest developments.

French fears

Concern about the effects of the U.S. decision is particularly strong in France, as many of its companies were among the first to invest in Iran after the signing of the nuclear accord.

On Tuesday, Economy Minister Bruno Le Maire and Le Drian held a closed-door meeting with more than 6o French businesses that are “present in Iran or have trade relations with the country,” a statement issued by the economy ministry said.

“A lot of companies in the aeronautical, pharmaceutical, energy and car sectors have invested in a significant way in Iran and some have concluded contracts in good faith which must be respected,” Le Maire told reporters following the meeting.

STR/AFP via Getty Images

France, he said, is “totally determined” to “make our economic interests respected and to respect one principle, which is the refusal of extra-territorial sanctions.” The minister said he wanted France, Germany and Britain to reach out to the U.S. administration and ask for “exemptions, additional deadlines, or to respect the contracts that have been agreed in good faith by our businesses in Iran.”

Europe, he added, must have an “independent financial tool” that would “allow our companies to trade freely in places Europe decided it was necessary or useful to do trade.”

Another possibility raised by Le Maire is a European version of U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), which administers and enforces economic and trade sanctions.

The penalties for breaking U.S. sanctions can be steep, as some of France’s biggest firms can attest. In 2015, French lender BNP Paribas was slapped with a $ 9 billion fine after U.S. prosecutors accused it of violating sanctions against Iran as well as Sudan and Cuba. The bank’s CEO and deputy CEO were forced out in the wake of what was then the highest fine ever imposed on a foreign lender by American authorities.

Another French firm that has a lot to lose in Iran is Total.

“We are not going to get into confrontation” — French government official

It  is the only major Western energy company that plunged into a business deal with Iran once sanctions were lifted in 2016, signing a $ 1 billion investment in the offshore South Pars gas field. It’s meant to be a 20-year project and Total’s investments are believed to be $ 5 billion.

Total CEO Patrick Pouyanne has previously said his company would ask for a waiver in case Trump pulled out of the Iran deal.

Criticism of the U.S. sanctions also came from the U.K., which resumed its trade with Iran after the deal was struck. In a statement Tuesday, Boris Johnson said the U.K. remains “fully committed to upholding” the deal, and is working with France and Germany to “explore the best way forward.”

A French government official told reporters earlier this week that the U.S. practice of punishing foreign companies operating in foreign countries like Iran “is a real problem. “ He said Europe “is not capable of reacting to those extraterritorial measures.”

However, he added, “We are not going to get into confrontation,” with the U.S.

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