Fear of US repercussions has been keeping many European business from making deals with Iran, the New York Times reported Thursday - both due to continued US sanctions on the Islamic Republic and restrictions flagging visitors to the US who have been to Iran.
EU Foreign Policy chief Federica Mogherini flew to Tehran last week to reassure Iranian officials that the bloc is doing everything possible to boost trade between the two entities.
Yet EU banks still must follow US guidelines for financial disclosure - requiring them to report any accounts held by US citizens - and while there are several thousand dual Iranian-American citizens, Iranian banks are unlikely to follow the directive.
Violators of the requirement could see banks' assets seized, a risk many EU banks are reluctant to take.
"Europe is being taken hostage by American policy," Marietje Schaake, vice President for the EU's Delegation of Relations with the United States, stated to the newspaper. "We negotiated the nuclear deal together, but now the US is obstructing its execution."
While Europe has never had sanctions against Iran, the issue remains contentious in the US - where many, mainly Republican, lawmakers are already upset over limited lifting of sanctions since the 2015 Iran nuclear deal.
A recent report indicated that the Obama administration is considering easing financial restrictions that prohibit American dollars from being used in transactions with Iran, a move which sparked anger among lawmakers opposed to the nuclear deal with Iran.