BRUSSELS - The European Investment Bank has balked at an EU proposal to do business in Iran to help offset US sanctions and save the 2015 nuclear deal, EU sources told Reuters, under pressure from the United States - where the bank raises much of its funds. "The European Union is fully committed to the continued, full and effective implementation of the [Iran nuclear deal] so long as Iran also respects its obligations," it said in a statement on Wednesday after a meeting of senior EU commissioners in Brussels. "We will hold those doing prohibited business in Iran to account," US Under Secretary of the Treasury Sigal Mandelker said in a blunt speech on Tuesday.A second EU official said the US was sending out such teams across the world with a private warning against doing business with Iran.Washington last month said it would impose new economic penalties after pulling out of the accord that world powers struck with Iran under which Tehran agreed to curb its nuclear activities in return for sanctions relief.One EU official said the United States had also pressed the European Investment Bank, which has never done business in Iran, not to invest in European firms doing business there, despite a European Commission proposal it start doing so.The European powers are trying to come up with a package to ring-fence trade with Iran against renewed US financial sanctions to dissuade Tehran from quitting the accord.But the global reach of the US financial system, forcing companies to choose between two irreconcilable options - selling to Iran or to the vast US market - is driving home the limits of European efforts to shield their revived trade with Tehran.According to two diplomats, Andrew Peek, deputy assistant secretary of state with responsibility for Iran and Iraq, was in the Czech Republic on Tuesday and Hungary on Wednesday. European Commissioners are expected on Wednesday to endorse the EU executive's plan to encourage the EIB to support investments by European businesses in Iran, where the bank has never before done business.The move has symbolic value as EU officials see it as one of the easiest to deliver on in response to Iran's demands that it show proof of its commitment to the nuclear deal.A total of six EU diplomats, EU officials and sources at the bank said that within the EIB there are growing concerns that the Commission's plan would imperil its multi-billion-dollar funding program. “A prerequisite for its business model is that the bank should remain a solid and credible institution on the international capital markets, and this would be incompatible with ignoring possible sanctions against Iran,” a spokesman for the bank told Reuters in an email.
The European Commission proposes to implement two measures by August, designed to counter the US exit from the agreement with Iran. These would extend the EU blocking statute and allow an extension of the European Investment Bank mandate.