When the proposed re-imposition of sanctions were announced by the President of the United States of America Donald Trump, he said that “Any nation that helps Iran in its quest for nuclear weapons, could also be strongly sanctioned by the United States [of America].”

As of August 7th, Iran will no longer be able to trade in gold, steel or aluminium.  Nor will it be allowed to purchase the American Dollar.   This will be followed in November by sanctions on oil, shipping and the Iranian central bank; all of which will have a dramatic impact on both the country and the people.

However, it is not only the Iranian people (although they are perhaps the most important factor) which are impacted by this policy of sanctions, the people of nations all over the world who work for companies who trade with Iran will also be affected.  To take a clear example, the French car manufacturer PSA Group (formerly PSA Peugeot Citroën) announced in June  that it was to suspend its joint ventures in Iran, an announcement which was swiftly followed by a concession from the French Finance Minister Bruno Le Maire that most French firms would be forced out of Iran too – since there was no longer any way to ensure that they received payment for their goods and services.

Renault is perhaps the exception, who with no direct car market in the United States of America, can consider itself perhaps outside of the realm of direct reprisal.   As a French company, there is nothing to prevent Renault from continuing to trade with Iran, it is not as if their business in North America will be affected by that decision; however what is at risk is Renault’s use of 3rd Party companies to deliver products and services to their customers in Iran.  Any company associating with Renault in its business in Iran could be liable to reprisals and sanctions by the United States of America – which means that any company who has business in North America will not be able to work with Renault without a risk to their own business.

The implications seem clear; anyone who wants to do business in North America will have to cut all ties with Iran – either directly or by proxy.

I do not wish to take issue with the decision of President Trump to re-impose sanctions (although I disagree with the policy), because I would argue that any interested party should hold both themselves and those with whom they associate to the same principles, and I believe that (appropriate) sanctions are a valid method for demonstrating your principles.  I would argue however, that if others such as the European Union are not in agreement with the introduction of sanctions against Iran and any who do business there – that they should take positive action to defend their own industries.

The European Union today revealed a ‘blocking statute‘ which is intended  to protect European industry from any sanctions that may be imposed – a laudable effort but which is likely to be as beneficial as the previous ‘blocking statue’ for Cuba; that is to say not very.

The previous statute indicates that no judgement can be passed against a European entity by a body outside of the EU i.e. a court in the United States of America cannot rule against a European company; however in practice there is no way that such a judgement can be prevented.  Furthermore, there is a major difficulty with enforcement and reprisal, something which (in the 1996 statute) was left down to individual member states. In the event therefore that a judgement be passed against one of the affected persons or entities, the relevant Member State is called upon to take appropriate measures against the United States of America in return.  In the case of Renault therefore, the French government is responsible for taking protective action against the United States of America for sanctions imposed: yet as we have seen, the French government clearly does not see that as realistic.  In a review of the 1996 statute in favour of Cuba, a report by Grayston & Company  in 2009 indicated that not only were the legal positions of each of the Member States very different concerning responses to such judgements, but that those were also not rigorously applied; with some Member States taking action and other not.

Ultimately of course, the threat of action and the threat of restricted access to the North American market is sufficient to ‘encourage’ any large corporation to choose between North America and Iran (the market for trade between the EU and the United States of America is the most lucrative bilateral trade agreement in the world).  Given the risks then, companies around the world will be pulling out of Iran.

It would seem therefore, that the United States of America is the de facto body for the governance of foreign policy around the world.   The reticence of any other body of nation to stand-up for their position displays nothing more than political cowardice: and if the EU (the largest trading partner) never seeks to exert its influence, then who else will?

So if the European politicians will not stand up and be counted, why do we vote for them?  What good is a French foreign minister (or a British one for that matter) if they simply accede to the whims of the President of the United States of America?   I expect my political representative to stand up for me, that after-all is the job.  If my representative is unwilling to defend my rights (in this case, my right to sell to the people of Iran) then what good are they?

There is no point moaning about the hegemony of the United States of America, if we do not like it, then we need to challenge it.