Since US President Donald Trump pulled out of the nuclear agreement with Iran, formally known as the JCPOA, the EU has been looking for ideas to prevent the worst: the exit of Iran from its obligations under the deal, including a nuclear “breakout.” The best way to prevent that is to keep private investment flowing from Europe to Iran. To finance such business, I am proposing a novel idea: Germany should start a bank, or convert an existing German bank, into an “Iran bank.”
When Mr. Trump withdrew from the JCPOA in early May he also reimposed “the highest level of economic sanctions” that had been waived as part of the Iran nuclear deal. These US sanctions do not apply only to American firms. They also hit companies and individuals in third states that do business with Iran.
The relevant US sanctions come into force on August 6 or November 4 for specific sectors such as oil. At that point, companies that do business with Iran will be barred from doing business in the US. And under secondary sanctions, banks and financial firms that do business with Iran will be excluded from the US financial markets.
The US strategy appears to be effective: Even before Mr. Trump’s official announcement, companies and banks operating in Iran were winding up their operations and repatriating their profits. To date no major EU or US bank has declared itself willing to keep doing business in Iran.