To counter the impact of USA sanctions, the commission began work Friday to update the so-called blocking statute - legislation that forbids European Union companies from complying with the sanctions and allows them to recover any damages suffered.
The European Union has relaunched an old law to try to protect European businesses at risk of U.S. sanctions if they continue to trade with Iran.
The EU's blocking statute bans any EU company from complying with USA sanctions and does not recognize any court rulings that enforce American penalties.
The European Commission said on Friday that it had "launched the formal process to activate the Blocking Statute by updating the list of U.S. sanctions on Iran falling within its scope".
The European Commission said on Friday the measure would come into force within two months, unless the European Parliament and EU governments formally rejected it. The measure potentially could put European companies in a bind, as they could be forced to choose between compliance with the EU measure and US secondary sanctions against Iran.
In a Friday statement, the Commission also said it "will continue and strengthen the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector and with regard to small and medium-sized companies".
US President Donald Trump last week controversially pulled Washington out of the 2015 global deal with Iran that placed limits on its nuclear programme in return for easing economic sanctions.
"But the American sanctions will not be without effect".
In addition, Jean-Claude Juncker noted that EU leaders had "also made a decision to allow the European Investment Bank to facilitate European companies' investment in Iran" and that the European Commission would continue to cooperate with Iran.
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. The EU will remain committed to the Iran nuclear deal, the European Commission said on Friday.
European investments in Iran, mainly from Germany, France, and Italy, have jumped by more than 20 billion euros since 2016.