"We will not negotiate with the sword of Damocles hanging over our heads", Mr. Juncker said.
"As the European Commission we have the duty to protect European companies".
The "blocking statute" is a 1996 regulation originally created to get around Washington's trade embargo on Cuba.
U.S. sanctions must be reinstated within 90 to 180 days.
Following our discussion of Europe's angry response to Trump's unilateral Iran sanctions, in which European Union budget commissioner, Guenther Oettinger made it clear that Europe will not be viewed as a vassal state of the USA, stating that "Trump despises weaklings".
Why does the European Union want to do this?
The 2015 nuclear deal opened Iran to global investments after four decades of sanctions.
It comes after the US President pulled out of the Iran nuclear accord and gave businesses around the world notice to end their dealings with Tehran.More news: Laurel or Yanny? What we heard from the experts
US President Donald Trump last week controversially pulled Washington out of the 2015 global deal with Iran that placed limits on its nuclear program in return for easing economic sanctions.
The Commission said the EU measure would come into force within two months, unless the European Parliament and EU governments formally rejected it, but that it could also be activated sooner if there was strong political support.
"The American sanctions will not be without effect".
The EU executive said on Friday it "launched the formal process to activate the Blocking Statute by updating the list of USA sanctions on Iran falling within its scope".
Some of Europe's biggest firms had rushed to do business with Iran after the nuclear deal took effect.
Danish shipping giant Maersk and German insurer Allianz said Thursday they plan to wind down activities in Iran.
Where do Europe's leaders stand?
President Donald Trump has repeatedly threatened to pull out of the JCPOA unless Congress and America's European allies "fix" it with a follow-up accord.
German Chancellor Angela Merkel said on Thursday that it might be possible to compensate small and medium-sized firms, but not all businesses, from USA sanctions.