PSA Peugeot Citroen is to meet shortly to discuss implementing the next round of component bans to Iran Khodro (IKCO) as European Union (EU) sanctions continue to bite.

Iran is currently the target of severe economic sanctions that are threatening the future of PSA’s supply of parts to IKCO, which assembles the Peugeot 206 and 405 models.

PSA has been deciding on a monthly basis whether to discontinue its supply of parts – that make up the majority of the 206 and 405 vehicles – with the next meeting slated for mid-April.

“PSA has suspended [supply] of components to IKCO – the decision was taken for the month of March – just after the political decision about sanctions [concerning] sanctions to Iran,” a PSA spokeswoman told just-auto from Paris. “It is on a month by month basis.

“It depends on the political situation – it is because the banks can’t work any longer with Iran. This is a decision that has had to be taken because of European Union regulations.”

Although no precise date is yet available for the next PSA sanctions meeting, it appears likely it will be in mid-April to rubber stamp the move to continue suspending components to IKCO.

The move by PSA will come as a body blow to IKCO, which, although having a considerable number of suppliers, is reliant on the French automaker for the majority of its assembly work, which is shipped from France.

For PSA, the value of its business to Iran is around 1.5% of its annual EUR59bn (US$79bn) revenue.

“I guess we just accept the situation like we have always done,” said the PSA spokeswoman. “We have always respected the political decision.

PSA’s decision to comply with the EU sanctions diktat is likely to attract the attention of US automaker, General Motors , with whom it recently announced a proposed alliance.

The American government has traditionally adopted a hawkish approach to relations with Iran – a country with whom it has been engaged in countless disputes for the past 30 years.

Neither Iran Khodro in Tehran, the European Union in Brussels, or General Motors in Russelsheim was immediately available for comment.