EU to launch financial mechanism with Iran by year-end

The move is aimed at bypassing the US sanctions against Teheran and save the nuclear deal

Photo: EPA EU Foreign Minister Federica Mogherini

The European Union will establish a mechanism to facilitate non-dollar transactions with Iran in the near future in an attempt to circumvent sanctions imposed by the United States against Tehran, EU Foreign Policy Chief Federica Mogherini announced.

"I will expect this instrument to be established in the coming weeks before the end of the year as a way to protect and promote legitimate business,” Mogherini told reporters in Brussels on Monday.
The top EU diplomat did not offer any other details following a meeting of the bloc's foreign ministers in Brussels, but said work on creating the mechanism was "advancing well."

Under the so-called Joint Comprehensive Plan of Action (JCPOA), reached between Iran and six major powers - the US, Britain, France, Germany, Russia and China - Tehran agreed to put limits on its nuclear program in exchange for the removal of nuclear-related sanctions. Early in November, however, the Trump administration announced he would re-impose the “toughest” sanctions ever against Iran's banking and energy sectors with the aim of cutting off the country's oil sales and crucial exports. With this move the US administration hoped to get the other parties to the deal with Iran to likewise scrap the deal, but instead, they stressed that not only would they stick to the agreement, but they would also work to sustain it in the face of increased US pressure.

In a result, Iran and the 28-nation bloc have been discussing various ways to continue doing business with Iran and bypass US sanctions. Thus, they decided to introduce the Special Purpose Vehicle (SPV) to help preserve the economic benefits for Iran deriving from the curbs it placed on its nuclear program under a 2015 deal. EU diplomats had hoped to have the SPV in place by now but ran into delays as member states balked at hosting it for fear of being targeted by the revived US sanctions regime against Iran.

Late in November, however, Head of the Atomic Energy Organization of Iran (AEOI) Ali Akbar Salehi warned that Tehran's patience is running out over the failure of the European Union's economic pledges to deliver any "tangible results." He said the EU's efforts were encouraging but added: "We have not yet seen any tangible results."

"So, they [Europeans] are promising us that they are doing their best to be able to translate all that they have said in political terms and to turn it into realization, in other words, to materialize what they have said," Salehi said.

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