U.S. Will Fine Companies Still in Iran

On Monday May 21st, Secretary of State Mike Pompeo announced in a speech that European, Asian and American companies that are still present in Iran approximately six months from now will be charged with fines of several billions of dollars, followed by the arrest of their chief executives for disregarding American sanctions.

Pompeo stated: “This sting of sanctions will be painful if the regime does not change its course from the unacceptable and unproductive path it has chosen to one that rejoins the league of nations. These will indeed end up being the strongest sanctions in history when we are complete.”

These sanctions come after the somewhat recent nuclear deal with Iran in 2015, which was in turn followed by a guarantee from the U.S. that their companies would be safe in the then-unexplored Iranian market for at least a decade. Said promise has been apparently dismissed after the U.S. exited the deal.

While foreign investment has doubled since the 2015, it still makes up less than 1% of its economy—made the recent procedures by the U.S. look more like a limitation of other nations’ international economic presence and power, rather than a punishment for Iran. The influence of these companies and investors can be clearly seen in the country’s streets, and now their presence is being jeopardized, with most of them pulling out of their projects, or showing plans to do so.

However, there are still some European and Asian companies that are not under sanctions, and whether they will stay in Iran or leave is still uncertain. Their departure would certainly signify a reduction in job opportunities for young Iranian citizens, which has caused discomfort for several employers. Europe has particularly shown its concern, since they would be directly affected by the change in Iran’s economy and employment rate, finding itself with raised migration and in need for improvement in regional security.

Reacting to Pompeo’s announcement, the European Union has stated its intention to defend its members’ companies. European foreign investors have reacted very negatively to this new procedure, especially those with companies that focus in global operations. Most of them have stayed anonymous on the matter, probably fearing that they would be sanctioned with the new regulations.  One of them even said: “The message is ‘This is Rome, and Caesar has changed his mind. If we disobey, our villages will be burned to the ground’,” according to the New York Times.

The Trump administration’s approach towards foreign policy—especially when it comes to taking into consideration interests of its increasingly-displeased European allies—has proven to be focused on presenting threats and installing limitations in an attempt to solidify the U.S.’ presence in global economy and politics. However, the countries that were previously considered allies are not oblivious to this approach’s adoption.

Most notably, after the nation left the Iran deal, E.U. senior adviser Nathalie Tocci stated: “Can’t we defend what our own interests are? There is something as fundamental at stake here as the trans-Atlantic bond, because Europe can’t exist in a non-multilateral space. Isn’t it wiser to temporarily part ways with the Trump administration?” This departure was echoed by former American NATO ambassador Ivo H. Daalder, who stated: “At some point — after having pushed the Europeans on NATO, Paris, the Jerusalem embassy move, trade and now Iran — the Europeans will come to the conclusion that they’re better off going their own way.”

Featured Image via: Flickr/Gage Skidmore