Major European, Asian firms flee Iranian market in wake of U.S. sanctions: Report
Nearly three dozen major European and Asian companies are pulling their investments from Iran to avoid getting tangled up in reimposed U.S. sanctions, despite Tehran’s scramble to find loopholes for the companies and efforts by European governments to neutralize the impact of the new sanctions.That’s the main finding of a study released this week by a Washington think tank known for pushing a hawkish U.S. sanctions policy and for its critical posture toward Iran.The Foundation for Defense of Democracies (FDD) study claims that during the four months since President Trump pulled out of the 2015 Iranian nuclear accord, 31 European and Asian firms on Fortune magazine’s Global 500 list have announced they will be leaving the Iranian market or indicated their exit is imminent.Washington is reimposing economic penalties on Tehran as part of Mr. Trump’s withdrawal from the Obama-era accord, under which U.S. and international sanctions had been lifted in exchange for cuts to Iran’s nuclear program a program Western powers long suspected of developing nuclear weapons in violation of U.N. Security Council resolutions.Mr. Trump argues the Iran deal pullout is warranted because the accord failed to address Tehran’s support for proxy militias in various countries around the Middle East, including Lebanon, Syria, Iraq and Yemen.Recent months have seen Trump administration officials attempt to pressure European and Asian firms to get their investments out of Iran if they don’t want to be impacted by reimposed U.S. sanctions.Iranian officials are scrambling to convince the firms not to pull their money, but to stand against the Trump administration, whose reimposing of sanctions is not being supported by other powers who signed the 2015 nuclear deal, including Britain, France and Germany.According to the new FDD study, the list of Global 500 firms who’ve indicated plans to pull out of Iran includes France’s Total, Airbus, and PSA/Peugeot, Denmark’s Maersk, Germany’s Allianz and Siemens, Italy’s Eni, Japan’s Mazda and Mitsubishi UFJ Financial Group, and BP from the United Kingdom.Renault, the only European member of the Global 500 that originally expressed an intention to resist American pressure, now says it is likely to suspend operations, citing the need to comply with U.S. sanctions, claimed the study, which was released Monday.“We found that unilateral U.S. sanctions against Iran remain extremely powerful even when European governments seek to neutralize their impact,” said FDD Director of Research and co-author David Adesnik. “If the U.S. administration’s goal is to convince Iran to end its nuclear program, stop sponsoring terrorism, and halt its support for the murderous Assad regime in Syria, then the administration should maintain its maximum pressure effort.“However, the new FDD study indicated that uncertainty remains around the intentions of more than 100 companies who’ve invested in Iran in recent years. The think tank said it examined 232 companies and related entities, of which 67 are part of the Fortune Global 500 list of firms with the highest revenues.“So far, 19 companies plan to stay, 71 to leave, and 142 have yet to make their intentions clear,” FDD said in a news release.In a separate twist likely to challenge the Trump administration’s push to isolate Iran’s economy, there are indications that China and India are seeking ways to continue doing business with Tehran.China’s adeptness at cutting deals with Iran through state-owned Chinese companies not exposed to the American financial systems could make Beijing the big beneficiary of Washington’s reimposing of sanctions on foreign companies doing business with Tehran.Analysts say that while European firms fearful of losing access to the U.S. market have been canceling deals, China has been stepping up its commercial links to a country that occupies a strategic node in Beijing’s ambitious Belt and Road foreign economic investment strategy.There are reports, meanwhile, that Indian public sector oil refineries may seek to sidestep impending U.S. sanctions against Tehran’s petroleum industry by importing Iranian oil from Iranian tankers.In a bid to slash Iranian oil exports to zero, the Trump administration has said it intends to reimpose U.S. sanctions on Iranian petroleum beginning in November. Dan Boylan contributed to this story.