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EU to set up scheme to allow European companies trade with Iran despite US sanctions

Wednesday, 26 September, 2018 - 20:11

The EU is to create a specific entity to allow its members to continue to trade with Iran and avoid US sanctions, announced Monday, the bloc’s chief diplomat Federica Mogherini told the United Nations on Monday.

“This will allow European companies to continue to trade with Iran in accordance with European law and could be open to other partners around the world,” she said in a statement read together with the Iranian Foreign Minister Mohammad Javad Zarif.

Federica Mogherini was speaking at the end of a meeting devoted to safeguarding the 2015 nuclear agreement, after the US’s exit from the pact in May. The representatives of the six signatory countries still members of the agreement – France, United Kingdom, China, Russia, Germany and Iran – were present at this meeting, organised on the sidelines of the UN General Assembly.

According to European sources, this “special purpose vehicle” (SPV) could act as a trading exchange or a sophisticated barter system allowing companies to evade Washington sanctions.

US President Donald Trump withdrew from Iran’s international nuclear deal, which was supposed to prevent Tehran from acquiring weapons of mass destruction and pull the country out of economic isolation by ending sanctions against Tehran.

Washington has since reinstated a series of tough sanctions against foreign companies or countries that continue to do business with the Islamic Republic. Faced with this threat, many large companies with a significant presence in the United States have since ceased all activity with Iran for fear of US reprisals. On 4 November, a new wave of sanctions will directly hit Iran’s oil exports and banking operations, which has remained isolated from international financial channels since 2012.

The new payment channels must “reassure economic actors who have a legitimate trade with Iran,” Mogherini told reporters. It is about preserving the economic benefits expected by Tehran in exchange for maintaining in the agreement its renunciation of a military nuclear program, she explained.


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