French shipping firm drops Iran over US sanctions threat

French shipping firm drops Iran over US sanctions threat
A French-owned shipping container group said it will pull out from Iran over the threat of US sanctions.
2 min read
07 July, 2018
CMA CGM is the world's third largest shipping container group [Getty]

The world's third largest shipping container group, the French-owned CMA CGM, has decided to withdraw from Iran over the threat of US sanctions, its chief executive said on Saturday.

"Because of the Trump administration, we have decided to end our service to Iran," Rodolphe Saade told an economic conference in Aix-en-Provence in southern France.

"Our Chinese competitors are hesitating a bit, so they may have different relationships with the Trump administration."

In 2016 the company signed a memorandum of understanding with the Islamic Republic of Iran Shipping Lines allowing it to lease spaces for vessels, operate joint shipping lines and cooperate on the use of port terminals. 

The move came after US President Donald Trump announced in early May the unilateral withdrawal of the US from the landmark Iran nuclear deal and the reinstatement of sanctions against the country, as well as against foreign companies who do business with it. 

Washington said the sanctions would be immediate for new contracts and gave companies already working there up to 180 days to cease trading.

Iran has faced mounting economic woes since the US pulled out of the historic nuclear accord that lifted international sanctions in exchange for a scaling back of the Islamic republic's atomic programme.

Last week, Tehran urged foreign firms working in Iran to resist US "threats" of sanctions, noting it was in talks with French car makers about staying on in the country.

"All (foreign) companies working in Iran should not be intimidated by US threats and should continue their activities in Iran," Industry Minister Mohammad Shariatmadari told a news conference in Tehran.

"All those who do not do this, we will replace them. There are others who will invest in Iran," he said.

When asked specifically about the case of French vehicle manufacturers PSA - maker of Peugeot, Citroen and DS - and Renault, Shariatmadari said: "Until now, they have not told us that they are not continuing" their business in Iran.

"They are continuing their cooperation. So far, we are talking (with these groups) and there is nothing new," he said.