Germany's VW to leave Iran, says US official

Just over one year since it re-entered the Iranian market, Volkswagen agreed to cease nearly all of its business operations in Iran, US news agency Bloomberg reports. VW would maintain some business with Iran "under a humanitarian exception," according to the report.

Although VW's Iran operations are small and contribute little to its turnover, the move would be a significant victory for the US administration as it is trying to convince companies to cease business with Iran, which it sees as a destabilizing force in the Middle East that needs to be reined in.

Without confirming or denying a potential move out of Iran, VW said its position had not changed in recent months. A spokesman said the carmaker is holding to its position that it "obeys all national and international laws as well as export regulations."

"We are also taking into account possible effects related to the reintroduction of US sanctions," the spokesman said.

According to the report, US Ambassador to Germany Richard Grenell persuaded Germany's biggest carmaker to comply with US sanctions on Iran, which were reimposed after US President Donald Trump decided to withdraw from the 2015 international Joint Comprehensive Plan of Action (JCPOA), known as the Iran nuclear deal, in May.

"We are pleased with this decision because Iran diverts its economic resources away from its people to spread violence and instability across the globe," Grenell is quoted by Bloomberg as saying.

Trump applying pressure

The US has repeatedly warned European and other countries that they had to choose between doing business in the United States — a key market for Germany's carmakers — or in Iran, where VW had started to rebuild operations in 2017, after a 17-year hiatus.

Read more: Siemens turns its back on Iran

The Iran nuclear deal, hammered out after years of talks by Iran and the United States, Germany, Britain, China, Russia and France (known as the P5+1) as well as the European Union, agreed to lift crippling international sanctions related to Iran's nuclear program in exchange for Tehran dismantling it.

Trump called the deal the "worst ever" as he fears it could help strengthen what the US sees as Iran's detrimental influence in the Middle East. The EU is currently in talks with Iran to keep the deal alive.