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. Last Updated: 07/27/2016

EU Fears Sanctions on Iran

BRUSSELS -- The European Union is trying to fend off moves by the U.S. Congress to punish foreign firms that do business in Iran, diplomats say.

The main European powers say they are willing to join Washington in seeking tougher sanctions against Tehran at the United Nations over its refusal to halt uranium enrichment.

But Brussels will fight any attempt to apply U.S. law unilaterally to punish European firms that invest in or trade with Iran, if necessary at the World Trade Organization, the diplomats said, speaking on condition of anonymity.

The EU is particularly alarmed by a bill passed by the House of Representatives that would end a presidential waiver sparing European companies from U.S. sanctions on firms that invest more than $20 million in the Iranian oil and gas sector.

European officials say new EU investment in Iran is dwindling because of the political risk and lack of finance for major projects, and exports to Iran are falling.

The 27 EU countries exported goods worth 13 billion euros ($18.1 billion) to Tehran in 2005, 11.3 billion euros last year and 4.7 billion euros in the first half of this year, according to the EU statistics office.

The concern in Brussels is that in the run-up to the 2008 U.S. elections, politicians will be vying to propose harsher measures against Iran, at the risk of riding roughshod over European and Japanese allies.