Risky Business: Unable to Stop the Flight of Businesses from Iran, EU Leaders Resort to Threats and Payoffs

European Businesses Ignoring EU as Officials Threaten Sanctions for Leaving Iran; €50 Million “Aid” Package Prepared to Compensate Regime for Lost Revenues

The largest European companies are making plans to close their business units in Iran or have already done so, all to the great distress and dissatisfaction of the European Union’s (EU) foreign policy chief, Federica Mogherini.

Mogherini, an Italian who currently represents the EU abroad, has sought to bind the interests of privately held and publicly traded European companies with global security interests. To that end, she issued a joint statement with the French, German and British foreign ministers, that vowed to “protect European economic operators engaged in legitimate business with Iran.”

The European Commission also took the extraordinary step of issuing an updated Blocking Statute, which prohibits EU companies from complying with U.S. sanctions and protects European companies from secondary sanctions imposed by the U.S.

But business leaders on the continent aren’t interested in EU protections.

“You cannot operate in 130 countries in the world without access to US financial system,” said Patrick Pouyanné, CEO of French energy giant Total.  “Therefore, we are enforcing and complying with US laws and have to leave Iran’s profitable market.”

Likewise, head of Denmark’s Maersk shipping line Soren Skou stated, “With the sanctions the Americans are to impose, you can’t do business in Iran if you also have business in the US, and we have that on a large scale … I am certain we’re also going to shut down in Iran.”

And Maciej Wozniak, co-vice chairman of Polish state-run energy company PGNiG said, “We can take risks when we are drilling and looking for hydrocarbons, but we will not take risks playing politics.”

“Mogherini doesn’t seem to understand that no amount of EU political maneuvering can overcome the compelling nature of U.S. sanctions on private businesses,” said UANI President David Ibsen. “Notwithstanding U.S. sanctions, European business leaders who made the initial mistake of entering the Iranian market were already coming to terms with the insurmountable challenges and risks to respectable and responsible companies there. Most significantly, it is well-documented that businesses from the so-called private sector in Iran are often front companies for the Islamic Revolutionary Guard Corps (IRGC) – and their primary export is terrorism.”

As UANI detailed earlier this year in its comprehensive review of how the regime spreads its revolution abroad, the IRGC “primarily acts militarily to achieve these aims, utilizing the Quds Force, its foreign expeditionary arm, to support terrorist proxies and subversive activities throughout the Middle East.”

Even companies in famously neutral Switzerland, which is not a member of the EU, are not interested in continuing business with or in Iran.  In a letter to UANI, Suisse-Atlantique CEO Jean-Noel Andre wrote, “we have given clear instruction to our chartering department to stop every future business with Iran and to exclude Iran as destination from our charter party, even if EU is still promoting the Iran Nuclear Deal – and we are a Swiss and European company, and therefore shall not be oblige[d] to follow the US sanction[s]."

The flight of business from Iran has put EU officials in the difficult spot of having to threaten European companies with sanctions if they comply with U.S. sanctions.  And while they create a lose-lose situation for some of the most significant drivers of the European economy, officials are preparing to distribute a €50 million “aid” package payoff.

“Mogherini’s compatriots used to talk about the opportunities in the Iranian market for European businesses, but it was always an illusion,” said Ibsen.  “The profits were never realized but the risks certainly were.  European politicians must cease their quixotic attempt to force European CEOs to make business deals they simply do not want.  And European taxpayers should not foot the bill for Mogherini’s futile Iran obsession.”