The reimposition of sanctions on Iran after President Trump pulled the U.S. out of what he called a failed nuclear deal is prompting foreign companies to scrap existing contracts with Iran and drop plans to seek new work there.
The U.S. Treasury Department has given companies 180 days — until November 4 — to wind down contracts in Iran or be barred from doing business in the United States or with any U.S. entity, including financial institutions.
Sigal Mandelker, the Treasury under secretary for terrorism and financial intelligence, says the Tehran regime had used front companies and subterfuges “to illicitly procure aircraft parts from across the world to fuel terrorism.” She urged countries to “require your companies to do extra due diligence to keep them from being caught in Iran’s deceptive web.”
The immediate impact of the reinstated sanctions is being felt by Iran’s oil and gas industry, which was looking to foreign partners to boost its output. Iran was the world’s fifth largest oil exporter in 2016, producing 4 million barrels of crude oil a day.
Here are some foreign companies pulling out of deals with Iran:
- Total S.A., the French oil and gas giant, says it decided to cancel a $2 billion contract with the National Iranian Oil Company to develop the world’s largest gas field because it “cannot afford to be exposed to any secondary sanction” that would deprive it of financing from American banks for projects around the world. It’s seeking a waiver for the contract from the Treasury Department, but acknowledged that’s unlikely.
- Airbus, the European aircraft manufacturer, had a $19 billion contract to sell 98 jets to Iran. Treasury Secretary Steven Mnuchin said the U.S. license for the sale — needed because the French company makes jet parts in the United States — was being revoked. Airbus says it is still analyzing the situation and its impact on customers, but will stay in full compliance with sanctions and export controls. It had already delivered three planes.
- Maersk Line, the world’s largest container-shipping company, says it will wind down its operations in Iran, including a staff of 12. “Our presence in Iran is limited,” the Danish company said in a statement. It has been using third-party vessels to ship containers from Jebel Ali in United Arab Emirates to the Iranian ports of Bandar Abbas and Bushehr.
- The French automaker Groupe PSA, Europe’s second largest, is suspending two joint ventures to sell Peugeots and Citroëns in Iran while also, with the French government, seeking a waiver.
- DZ Bank, Germany’s second largest, says it will suspend financial transactions with Iran starting July 1.
- The Russian oil company Lukoil put on hold its plans to pursue projects in Iran.
- India’s Reliance Industries, a major oil refiner, intends to stop purchases of Iranian oil, according to sources cited by the news agency Reuters.