International companies active in Iran face the threat of US sanctions within weeks after Washington rebuffed a high-level European plea to exempt crucial industries that would help keep a nuclear deal with Tehran alive. Mike Pompeo, US secretary of state, and Steven Mnuchin, Treasury secretary, have written a letter formally rejecting an appeal for carve-outs in finance, energy and healthcare because Washington wants to maximise financial pressure on Iran, according to diplomats with knowledge of its contents.
The request for exemptions was lodged last month by ministers from Germany, France and the UK, as well as their EU counterpart. The US rejection means the first wave of Washington’s Iran sanctions is due to take full effect early next month. The action is another sign of the growing transatlantic rift between the US and Europe underscored by the bruising meeting between President Donald Trump and Nato allies last week. In an interview with CBS News broadcast on Sunday, Mr Trump referred to the EU as “a foe” on trade issues. The 2015 nuclear agreement — also signed by Germany, France, Britain, China and Russia — lifted many international sanctions on Iran in exchange for limits on Tehran’s nuclear programme.
Iran has said it will only stay in the deal if the Europeans guarantee it will continue to receive economic benefits. One EU diplomat said the return of US sanctions against Tehran jeopardised both European companies with dealings in Iran and the EU’s efforts to sustain the nuclear accord after Mr Trump withdrew from the pact in May. “We do not think it’s helpful in relation to the situation in Iran,” the diplomat said. “There are also extraterritorial risks in these sanctions for EU operators.” Mr Pompeo and Mr Mnuchin wrote in their letter that the US wants to use sanctions to create “unprecedented financial pressure” on Iran until it makes a “tangible, demonstrable and sustained shift” in policies, according to diplomats familiar with its contents.
The US in May set out 12 demands for Iran to meet, including stopping uranium enrichment, scrapping its ballistic missile programme and ending its involvement in Middle Eastern conflicts including Yemen, Syria and Iraq. The Pompeo-Mnuchin letter said the US will allow only limited carve-outs from sanctions if Washington deems them necessary for its own national security reasons or for humanitarian purposes, diplomats added.