The "blocking statute" is a 1996 regulation originally created to get around Washington's trade embargo on Cuba, which prohibits EU companies and courts from complying with specific foreign sanction laws, and says no foreign court judgments based on these laws have any effect in the European Union.
The EU's blocking statute bans any EU company from complying with US sanctions and does not recognize any court rulings that enforce American penalties. Trump vowed to reinstate the previous sanctions and introduce new restrictions should Tehran carry out its nuclear ambitions.
The Commission said it would also keep aid money flowing to Iran, part of its efforts to uphold Europe's side of the 2015 nuclear deal, which offers sanctions relief in return for Tehran shutting down its capacity, under strict surveillance by the United Nations nuclear watchdog, to stockpile enriched uranium for a possible atomic bomb.
The European Commission will launch the process of activating a law that bans European companies and courts from complying with United States sanctions against Iran, after Washington pulled out of the landmark 2015 nuclear deal.
The measures announced in Brussels will come into force within two months unless the European Parliament or the EU governments formally reject them.
"But the American sanctions will not be without effect".
Indonesian family that bombed churches well off, friendly
Co-ordinated suicide bombings at three churches were carried out Sunday by a family of six that included girls aged eight and 12. Its leaders were killed in police raids and hundreds of militants were arrested.
The EU executive's announcement is in line with the decision made by heads of state and government at their informal summit in Bulgaria on Thursday in response to the reinstatement of US sanctions related to the withdrawal of the US July 2015 on the Iranian nuclear program, announced on May 8 by Donald Trump.
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.
Earlier this year, the European Commission said it was looking to open talks with Iran regarding gas supply to the continent through the Southern Gas Corridor (SGC), a huge pipeline under construction.
In the same year, European Union investment in Iran was valued at €20bn.
The EU's blocking statute bans any EU company from complying with US sanctions and does not recognise any court rulings that enforce American penalties.
It further pledged to continue energy sector cooperation, with EU Energy Commissioner Miguel Arias Canete due to visit Tehran at the weekend.