John Irish, Riham Alkousaa — Reuters Jan 31, 2019
France, Germany and Britain have opened a new channel for non-dollar trade with Iran to avert U.S. sanctions, although diplomats say it is unlikely to allow for the big transactions that Tehran says it needs to keep a nuclear deal afloat.
Washington’s major European allies opposed last year’s decision by U.S. President Donald Trump to abandon the 2015 deal, under which international sanctions on Iran were lifted in return for Tehran accepting curbs on its nuclear program.
Iran has threatened to pull out of the deal unless the European powers enable it to receive economic benefits. The Europeans have promised to help companies do business with Iran as long as it abides by the deal.
“It is a political act,” French Foreign Minister Jean-Yves Le Drian told reporters after a meeting of EU counterparts in Bucharest. “It is a gesture to protect European companies.”
Washington says that, although Iran has met the terms, the accord was too generous, failing to rein in Iran’s ballistic missile program or curb its regional meddling.
New U.S. sanctions have largely succeeded in persuading European companies to abandon business with Iran, and Washington said on Thursday that it did not expect the EU effort, known as the Special Purpose Vehicle (SPV), to change that.
“We do not expect the SPV will in any way impact our maximum economic pressure campaign,” a U.S. State Department spokeswoman said.
The European trade vehicle was conceived as a way to help match Iranian oil and gas exports against purchases of EU goods. However, those ambitions have been toned down, with diplomats saying that, realistically, it will be used only for smaller trade, for example of humanitarian products or food.
“It won’t change things dramatically, but it’s an important political message to Iran to show that we are determined to save the JCPOA (Iran deal) and also to the United States to show we defend our interests despite their extraterritorial sanctions,” one European diplomat said.
The EU has spent months preparing the system and it will take several months more to become operational.
Britain’s Jeremy Hunt said the three countries were working closely with Tehran to finalize arrangements: “Registration is a big step, but there is still more work to be done,” Hunt said.