French shipping major CMA CGM has decided to pull out of Iran following the US government’s decision to renew sanctions on companies operating in the country, according to an official announcement by the company’s chief executive, during an economic conference in south France, on Saturday.
The decision by President Trump on 8th May, 2018 to cease the US participation in the JCPOA and to re-impose US nuclear-related sanctions which were lifted to implement the JCPOA, is likely to have significant consequences for maritime trade with Iran and the insurance of such trade, according to estimations by global experts.
Other shipping giants, such as Danish Maersk, have already revealed plans to halt business ahead of a reimposition of sanctions following the US decision to withdraw from the JCPOA Agreement.
JCPOA is an international agreement on the nuclear program of Iran reached in 2015, between Iran, the EU, and the P5+1 (the five permanent members of the UN Security Council – China, France, Russia, United Kingdom, United States – plus Germany).
Due to the Trump administration, we have decided to end our service for Iran. Our Chinese competitors are hesitating a little, so maybe they have a different relationship with Trump, but we apply the rules,
…Mr. Rodolphe Saade was quoted as saying by Reuters.
He added that his company’s cooperation agreement with local Iranian partner IRISL had been suspended and that the company did not want to fall foul of the rules given their large presence in the US.
He also said that the company had so far not seen an impact of trade tensions between China and the United States on shipping volumes, but was making preparations with a close eye on China and southeast Asia in case the situation deteriorated.
Following the announcement by CMA CGM, which operates the world’s third largest container shipping fleet with more than 11% of global capacity, Iran’s President Hassan Rouhani urged European countries to do more to offset the US measures and to keep alive an agreement with world powers to curb the country’s nuclear programme:
European countries have the political will to maintain economic ties with Iran based on the JCPOA (the nuclear deal), but they need to take practical measures within the time limit.
European powers, which still support the nuclear deal, say they will do more to encourage their businesses to remain engaged with Iran. But the prospect of being banned in the United States appears to be enough to persuade European companies to keep out, Reuters reported.