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Much to Europe's displeasure, foreign companies doing business with Iran are also at the crosshairs of the US sanctions.

To counter the impact of United States sanctions, the commission began work Friday to update the so-called blocking statute - legislation that forbids European Union companies from complying with the sanctions and allows them to recover any damages suffered.

Earlier this month, President Donald Trump opted to withdraw the United States from a joint nuclear agreement with Iran, and chose to reinstate all sanctions that had previously been imposed on Iran, but were waived when the deal was signed in 2015.

UK review after tower block fire sparks controversy
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"We now need to act and this is why we are launching the process to activate the "blocking statute" from 1996", Juncker said during Thursday's meeting of European Union foreign ministers in Sofia, Bulgaria.

We now need to act and this is why we are launching the process of to activate the "blocking statute" from 1996. Trump vowed to reinstate the previous sanctions and introduce new restrictions should Tehran carry out its nuclear ambitions.

The EU launched formal steps Friday aimed at sparing European firms fallout from USA sanctions on Iran as part of efforts to preserve the nuclear deal with Tehran.

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The Commission said the EU measure would come into force within two months, unless the European Parliament and EU governments formally rejected it, but that it could also be activated sooner if there was strong political support.

It further pledged to continue energy sector cooperation, with EU Energy Commissioner Miguel Arias Canete due to visit Tehran at the weekend.

"But the American sanctions will not be without effect".

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European companies that invested in Iran after the deal are already taking fright, with French energy giant Total warning it could pull out, and Danish shipping giant Maersk and German insurer Allianz also saying they plan to wind down activities there.

The talks in Tehran come a day after the European Commission president Jean-Claude Juncker deepened Europe's war of words with the USA over Donald Trump's decision to withdraw from the Iran nuclear deal and proposed tariffs on European goods. "We will have to see whether those remaining in the JCPOA can deliver those benefits to Iran", he said in the Belgian capital on Tuesday. The measures include continuing to sell Iran's oil and gas products, maintaining effective banking transactions and protecting European investments in Iran.

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