European companies may have to cancel billions of dollars in commercial deals because of Donald Trump's decision to rip up the nuclear deal and impose fresh sanctions on Iran. Photo / AP
European companies may have to cancel billions of dollars in commercial deals because of Donald Trump's decision to rip up the nuclear deal and impose fresh sanctions on Iran. Photo / AP
Iran is "likely" to launch cyberattacks on Western businesses "within months" in retaliation for the US pulling out of the nuclear deal, warn security experts.
The businesses at greatest risk are banks and financial services, critical infrastructure providers and energy companies along with government departments. These are the same targets that felt the brunt of Iranian hacking in 2012 and 2014.
Researchers at global cybersecurity company Recorded Future issued the warning after receiving intelligence from a former Iranian state hacker, who claimed there were more than 50 contractors vying for work on the government-sponsored cyber offensive.
Iran's cyber programme is known to have existed since 2009 but it first took steps against the US in 2012, after President Obama imposed financial sanctions on Iran and removed it from SWIFT, the money transfer system used by banks and financial institutions.
In response, Iran authorised denial-of-service attacks in an attempt to crash the computer servers of America's largest financial services in a campaign called "Operation Ababil", knocking their systems offline.
European companies may also have to cancel billions of dollars in commercial deals because of Donald Trump's decision to rip up the nuclear deal and impose fresh sanctions.
Europe has traditionally had stronger diplomatic and business ties with Iran than the US and its companies were the first to move back in after the Middle Eastern country rejoined the world stage in 2016.
Global oil prices have rocketed to highs not seen since the market crash more than three years ago. Iran exported nearly two million barrels a day in March and experts have said that roughly half of this could be shut down by sanctions.
The fresh supply fears resulted in the price of crude rising above US$77 ($111) for first time since November 2014.
European companies may have to cancel billions of dollars in commercial deals because of Donald Trump's decision to rip up the nuclear deal and impose fresh sanctions on Iran. Photo / AP
Shares in oil companies rose as a result. However, the likes of BP and Total were also scrambling to draw up contingency plans to escape the full force of tough US financial sanctions which could hurt Iranian-linked investments.
French state-owned Total was the first major energy company to return to Iran and now stands to lose its US$1 billion investment in a huge Iranian gas field.
Total's plan to develop Iran's South Pars Field hangs in the balance unless a similar waiver to those granted for the earlier phases of the project during the Iranian sanctions in the Nineties can be agreed.
BP is also trying to revive a sanctions safety-net to keep the Rhum North Sea field, which it jointly owns with the Iranian Oil Company, from closing down as it works to complete a sale to Serica Energy.
The field provides about 5 per cent of the UK's gas and was forced to close for almost three years following the US-EU sanctions against Iran in 2010, before securing a waiver to allow the field's gas flows to restart.
European companies may have to cancel billions of dollars in commercial deals because of Donald Trump's decision to rip up the nuclear deal and impose fresh sanctions on Iran. Photo / AP
The waiver required a legally complex arrangement to siphon off Iran's share of the revenue into an escrow account. However, the deal could face an eleventh hour delay as the threat of US sanctions raises concern for the industry regulator the Oil and Gas Authority.
Meanwhile, the aerospace industry's two dominant companies - Airbus and Boeing - look set to lose almost US$40 billion of orders between them.
The Iran deal with the Obama Administration paved the way for the country's airlines to renew their ageing aviation fleet. The imposition of sanctions means that the licences for the deal will be revoked.
Airbus looks to be hardest hit, with it losing sales of 98 jets to Iran. Of these only three have been delivered. Boeing has 80 aircraft at stake.
Rolls-Royce was a beneficiary of the Airbus deal as it was due to provide the Trent XWB engines for 16 Airbus A350s and Trent 7000 engines for 38 Airbus A330s.
The aerospace industry's two dominant companies - Airbus and Boeing - look set to lose almost US$40 billion of orders between them after the US decision to rip up the nuclear deal with Iran. Photo / AP
Other European companies to have made a push into Iran since 2016 include VW, which started exporting cars to Iran last year; Peugeot-owner Groupe PSA; and Renault.
Peugeot is understood to have signed production deals worth €700 million ($1.2b) and Renault has ramped up its investment in the country in order to produce about 350,000 cars a year.
Siemens, the German engineering company, signed a deal in October 2016 to upgrade Iran's rail network.
Companies with commercial deals in Iran have either 90 or 180 days to wind down their activities depending on the sector. It is possible that certain waivers can be negotiated. But so far the US has not provided any information on which goods might qualify.
Matthew Kroenig, a former CIA and Department of defence official, said the US government had sent a clear signal to international companies.
"European governments have said they will uphold the [nuclear] deal but their businesses aren't going to be able to do business with Iran so they're going to have very little choice but to get on board," he said.
"The Trump Administration has a grace period to give foreign companies time to wind down their business but yes after that point they will be subject to sanctions."
Ambassador Robert Joseph, a former member of the National Security Council, said: "The imposition of sanctions is immediate in the sense that no new contracts in these commercial periods will be permitted. There will be a wind-down period depending on the specific contract."
While European countries may be happy for their companies to continue doing business with Iran, the size of the US market and America's control of the mostly dollar-denominated global financial system means that companies with global operations cannot afford to anger it.
Some European politicians have raised the prospect of using a "blocking regulation" to counteract US sanctions. However, trade experts have warned that this would be largely symbolic and may have little practical use.
