This mechanism, dating back to 1996 and never used, adopted at the time to circumvent the embargo on Cuba, allows European companies and courts not to submit to regulations relating to sanctions taken by third countries.
The European Union and Iran have launched a vigorous campaign to safeguard the 2015 nuclear deal that the USA has recently ditched by trying to keep Iran's oil and investment flowing.
The European Commission has launched Friday the "blocking law", a device for protecting European companies against the sanctions the United States is preparing to reinstate against Iran.
The aim is to have the measure in effect before the first batch of United States sanctions kicks in on August 6, the EU's executive said in a statement.
The renewal of USA sanctions after Donald Trump's decision to withdraw from the Iran nuclear deal has raised questions about a number of major energy initiatives. Iran has warned that a loss of European Union business will force it to pull out of the accord, under which it agreed to stop enriching uranium in return for greater trade with the West.More news: NHL playoffs: Vegas evens series with Winnipeg
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The Commission said the measure would come into force within two months, unless the European Parliament and EU governments formally rejected it, but that it could also be activated sooner if there was strong political support, Reuters reported.
"But the American sanctions will not be without effect".
The Commission said European Energy Commissioner Miguel Arias Canete will meet Iranian officials in Tehran during a three-day trip from May 18 to try to reassure Iran and strengthen energy relations. "We will have to see whether those remaining in the JCPOA can deliver those benefits to Iran", he said in the Belgian capital on Tuesday.
The European Commission received the unanimous backing of EU heads of government to proceed with proposals made by commission president Jean-Claude Juncker and High Representative Federica Mogherini, which aim to protect European companies investing in Iran through action on four fronts.
The second step will be to "remove obstacles for the European Investment Bank (EIB) to decide under the EU budget guarantee to finance activities outside the European Union, in Iran".