America dismisses EU ‘blocking statute’ as Iran sanctions finally bite

America has dismissed the European Union’s attempt to minimise the impact of its Iran sanctions as the first phase of penalties kicked in three months after Donald Trump's withdrawal from the nuclear deal. 

A senior US administration official said a move by Brussels, with the support of Britain, to impose a “blocking statute” protecting European businesses trading with Iran was “not something that we’re particularly concerned by”. 

The comment came just hours after Jeremy Hunt, the Foreign Secretary, issued a joint statement with the foreign ministers of Germany, France and the EU expressing “deep regret” at America’s decision to reimpose sanctions. 

US officials also took a combative stance on countries like China and India – two major importers of Iranian oil – as they said the target would be “zero” oil being sold by Iran and would enforce their sanctions regime “aggressively”. 

Mr Trump said in a statement: "We urge all nations to take such steps to make clear that the Iranian regime faces a choice:  either change its threatening, destabilising behavior and reintegrate with the global economy, or continue down a path of economic isolation."

He also warned: "Individuals or entities that fail to wind down activities with Iran risk severe consequences."

The comments further deepened the rift between Mr Trump and other signatories to the Joint Comprehensive Plan of Action [JCPOA], commonly known as the Iran nuclear deal. 

The agreement was brokered by Barack Obama, Mr Trump’s predecessor, in July 2015 and waived economic sanctions in turn for Iran curbing its nuclear programme. 

But in May, Mr Trump announced America would be withdrawing from the deal, citing fears Iran was using it as cover to destabilise the Middle East and build up its ballistic missile programme while enjoying the economic benefits of the agreement. 

At one minute past midnight on Monday night the first wave of sanctions which Mr Obama had waived will be reimposed by the Trump administration, targeting trade with Iran on cars, precious metals, commercial planes, carpets and food. 

The Iranian regime will also be prohibited from using US dollars, the main currency for financial transactions and oil purchases. A second wave of sanctions will “snap back” in early November, hitting oil exports – a key source of revenue for the country. 

Other signatories to the deal have attempted to keep it alive by ensuring trade continues with Iran and on Monday Mr Hunt issued a statement with Jean-Yves Le Drian of France, Heiko Maas of Germany and Federica Mogherini of the EU. 

“We deeply regret the re-imposition of sanctions by the US,” the ministers said, adding that they were "determined to protect European economic operators engaged in legitimate business with Iran”. 

The statement said that the EU’s so-called blocking statue, designed to protect European companies from the impact of US sanctions to encourage them to keep trading with Iran, would take effect on Tuesday. 

Senior US administration officials were asked about the blocking statute during a briefing on the sanctions on Monday morning. 

One responded: “What you need to look at are the messages companies and financial institutions are sending. They have a deep appreciation for what is going on in Iran, the fact that it is very difficult and complicated to know who you’re doing business with.” 

The official added on the blocking statute: “This is not something that we’re particularly concerned by.”

Some 100 international companies have already announced their intent to stop trade with Iran and the country's economy is continuing to perform badly, the US officials noted, saying that it showed Mr Trump’s withdrawal decision was already having an impact. 

They stressed that Mr Trump is still willing to meet Iran’s leaders without preconditions to discuss a new deal.

The US favours an agreement that covers all aspects of the country’s behaviour, including its involvement in Syria and Yemen and ballistic missiles programme. 

The officials also said that the US supports protesters voicing their disquiet in Iran but fell short of demanding regime change, saying instead that they wanted the current government to alter its approach.