Renault CEO says will stay in Iran despite US sanctions

French carmaker Renault says it will maintain its presence in Iran despite the risk of penalties for violating US sanctions re-imposed on Tehran after Washington’s move to withdraw from the 2015 multilateral nuclear agreement.

“We will not abandon it, even if we have to downsize very strongly,” CEO Carlos Ghosn told shareholders at the annual shareholders’ meeting in Paris on Friday.

He added that such presence in Iran would give the company an advantage “when the market reopens”.

US President Donald Trump announced on May 8 that Washington was walking away from the nuclear agreement, officially known as the Joint Comprehensive Plan of Action (JCPOA), which was reached between Iran and the five permanent members of the UN Security Council – the United States, Britain, France, Russia and China – plus Germany.

Trump also said he would reinstate US nuclear sanctions on Iran and impose “the highest level” of economic bans on the Islamic Republic.

Under the JCPOA, Iran undertook to put limits on its nuclear program in exchange for the removal of nuclear-related sanctions imposed against Tehran.

PSA, the maker of Peugeot and Citroen cars, has suspended its joint venture activities in Iran, despite having promised to stand its ground in the face of sanctions.

A statement attributed to the carmaker said PSA “began the process of suspending the activities of its JVs, in order to comply with US law by August 6, 2018” when the sanctions are about to snap-back into place.

PSA and its French rival Renault were among the first European companies which rushed to Iran to tap into a pent-up demand for new automobiles after sanctions were lifted on the country in 2016.

Both Renault and Peugeot withdrew from Iran in 2012 when the country came under the Western sanctions.