Decertification of the Iran Deal - Global Trade Magazine
  November 18th, 2017 | Written by

Decertification of the Iran Deal

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  • In the 1990s, EU enacted rules prohibiting EU firms from complying with US sanctions against Cuba, Iran, and Libya.
  • US withdrawal from the Iran nuclear agreement, could prompt the reimposition of sanctions against Iran.
  • EU blocking regulations are not as effective as they might appear.

Might the European Union enact regulations to thwart US efforts to re-apply nuclear-related trade sanctions against Iran? That’s the subject explored in a new commentary from Columbia University’s Center on Global Energy Policy.

There is a history of the EU adopting such policies. In the 1990s, the EU enacted rules that prohibited EU firms from complying with US sanctions against Cuba, Iran, and Libya. In the present day, President Donald Trump’s decertification of the Iran nuclear deal, and/or an eventual US withdrawal from the agreement, could prompt the reimposition of sanctions against Iran which were removed as part of the nuclear deal.

In the commentary senior research scholar Richard Nephew and David Mortlock, a partner in the law firm of Willkie Farr & Gallagher, explore the history of the EU blocking regulation and potential outcomes of the United States unilaterally reimposing secondary sanctions for Iran today.

The authors note that blocking regulations are not as effective as they might appear. This is due to the regulation’s reliance on individual EU member states to carry out enforcement; the potential that the prohibitions are unenforceable by law; and that in its present form, the regulation would not apply to any of the broad secondary sanctions imposed by the United States since 2010.

“However,” they added, “it has been an effective political tool and a useful marker for the EU to point to when it believes the United States has overstepped international consensus.”

Although the EU blocking statute has been dormant for twenty years, it is possible it may soon be resurrected in policy and in economic debates in Brussels. There is no precedent on this issue because past US administrations have used waivers and executive discretion to friction with European governments. But a US shift in its approach to Iran “could awaken European sensitivities on US sanctions writ large,” the commentary concluded, “which would have grave implications for US-European sanctions coordination and the efficacy of US sanctions policies.