The action from Washington followed President Donald Trump’s decision to pull out of a landmark deal that sought to curb Iran’s nuclear programme.
French Foreign Minister Jean-Yves Le Drian said European companies should not have to pay for the US decision.
The US says firms have six months to halt business and cannot enter into new contracts or they will face sanctions.
In an interview with Le Parisien, the foreign minister said: “We feel that the extraterritoriality of their sanction measures are unacceptable. The Europeans should not have to pay for the withdrawal from an agreement by the United States, to which they had themselves contributed.”
He said the new sanctions regime would also affect the US and that Europeans would “put in place the necessary measures to protect the interests of our companies and start negotiations with Washington” on the matter.
Mr Le Drian said the commitment of other partners to the Iran deal should be respected.
He said the effects of the US move were already being felt in rising oil costs and an increase in political uncertainty in the Middle East.
France, Britain and Germany have all said they will work with Iran to try to salvage the agreement.
German Economy Minister Peter Altmaier said he would work with affected companies to try to “minimise the negative consequences” of the US move, adding: “That means, it is concretely about damage limitation.”
A number of French firms have have signed billion dollar agreements with Iran since the nuclear accord was signed in 2015.
They include Airbus, the oil giant Total and the car makers Renault and Peugeot.
They would have to wind up investments by November or face US sanctions.What Iran really wants in Syria