The French auto manufacturer PSA, the maker of Peugeot and Citroen cars, is the latest major international firm to leave Iran amid the threat of expanded US sanctions.
PSA said in a statement that it “has begun to suspend its JVs [joint ventures] activities, in order to comply with US law by August 6th, 2018”. The company added that it is working with the French Government to seek a waiver from the Trump Administration’s demand that all foreign companies with American interests cut ties with the Islamic Republic by early November.
PSA and fellow automaker Renault were among the first European companies re-establishing business in Iran after implementation of the July 2015 nuclear agreement, with lifting of European and international sanctions, in January 2016.
PSA signed production deals worth 700 million euros ($822 million) while Renault announced investment to increase its production capacity in Iran to 350,000 vehicles a year.
PSA sold 445,000 cars in Iran last year — about 12% of a global total of 3.63 million vehicles — mainly the supermini Peugeot 206 and the 405 family car. However, the company said that, as “operations in Iran represent less than 1% of its turnover”, withdrawal did not “alter…overall objectives”.
Since Donald Trump confirmed on May 9 that the US is leaving the nuclear deal, companies suspending links with Iran including French energy giant Total, which was planning a $4.9 billion investment in the South Pars gas field; France’s Airbus, which had contracted to deliver 100 passenger planes to Tehran; German insurance company Allianz; leading shipping firm Maersk; and America’s General Electric.
Europeans Send Letter Seeks Exemptions from US Sanctions
The European Union and three European powers — UK, France, and Germany — in the nuclear deal have sent a letter to the Trump Administration seeking exemptions from the expanded American sanctions:
As allies, we expect that the US will refrain from taking action to harm Europe’s security interests….US secondary sanctions could prevent the EU from continuing meaningful sanctions relief to Iran.
The Europeans noted that the International Atomic Energy Agency has reported on 11 occasions since the agreement that Iran is fulfilling its obligations: “As close allies we expect that the extraterritorial effects of US secondary sanctions will not be enforced on EU entities and individuals, and that the US will thus respect our political decision and the good faith of economic operators within EU legal territory.”
French Finance Minister Bruno Le Maire posted the letter, dated June 4, on his Twitter account:
📝 We ask the American authorities, in a letter signed with Germany, the UK and @eu_eeas to exempt European businesses doing legitimate trade in Iran from all extraterritorial American sanctions. Those businesses must be able to pursue their activities. pic.twitter.com/mDZP42gb0b
— Bruno Le Maire (@BrunoLeMaire) June 6, 2018