The European Union has called on the U.S. not to punish European firms that trade with Iran, German daily Die Welt reported Thursday. In a letter to the U.S. officials, the EU Foreign Policy Chief Federica Mogherini “appealed to the U.S. not to undertake any action” against European companies likely hit by U.S. sanctions following President Donald Trump’s withdrawal from the Iran nuclear deal last month.

The letter addressed to U.S. Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin was also signed by foreign and finance ministers from Germany, France, and Britain, German broadcaster Deutsche Welle disclosed. According to media reports, President Trump is considering imposing secondary sanctions against foreign companies which continue doing business with Iran.

Keeping European companies in Iran is crucial to European attempts to keep the nuclear deal in place. Tehran has made Europe’s business involvement conditional to its compliance with the 2015 nuclear agreement. “The cascade of decisions by EU companies to end their activities in Iran makes things much more complicated,” Iranian Foreign Minister Mohammad Javad Zarif told visiting EU Energy Commissioner Miguel Arias Cañete.

German daily Die Welt published the details of the diplomatic communication:

In [ongoing] confrontation over the Iran deal, three largest European states and the EU have urged the U.S. government to exempt the bloc from sanctions against the Islamic Republic. “We expect as allies that the US will refrain from the measures that threaten European security interests,” said the letter of the foreign and finance ministers from Germany, France and Britain. European companies must be allowed to operate their legal businesses in Iran. The U.S. President Donald Trump has announced his country’s withdrawal from the nuclear deal and imposed sanctions against Iran, which can also hit European companies doing business in the country. The letter, dated June 4, was also signed by the EU foreign policy chief Federica Mogherini and addressed to U.S. Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo. [Translation by the author]

Germany has been leading the charge to save the faltering nuclear deal. Chancellor Angela Merkel visited Russia and China in recent weeks to drum up support for her diplomatic efforts. Her position has been bolstered by EU Commission President Jean-Claude Juncker and the bloc’s Foreign Policy Chief Federica Mogherini.

Earlier in May, Juncker had announced the plans to enact the so-called “blocking statute,” or set of laws that were to shield European companies operating in Iran from prosecution in the United States. As it turns out, that move may not be anything more than a bluff. As the UK business daily Financial Times reported on Wednesday, Mogherini’s letter is “an indication of concern that the EU will not be able to shield such companies from sanctions now that Washington has abandoned the Iran nuclear deal.”

Since early May, several leading European companies have folded their operations in Iran. This long list includes engineering conglomerate Siemens, oil giant Total, and car maker Peugeot.

Much to the dismay of Brussels, EU’s own lending arm, European Investment Bank, has decided to comply with the sanctions placed by President Trump. EIB’s decision further “limits the bloc’s ability to shield trade with Iran,” Forbes confirmed. “[B]ank’s fears that its ability to raise funds on international capital markets would suffer echoes the calculation made by other European firms quitting Iran rather than risk penalties and access to the much vaster U.S. market.” Reuters reported.

Unlike the politicians in Berlin and Brussels, European businesses seem to have correctly assessed Trump administration’s resolve on the issue of Iran. While the EU leaders scramble to save the deal, European companies are exiting Iran in droves to protect their U.S. business interests.

Video: Chancellor Merkel defends Iran deal during China visit

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