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PARIS / BRUSSELS (Reuters) – A new EU mechanism to facilitate the payment of Iranian exports should be legally in place by November 4, when the next phase of US sanctions will be effective. but it will only be operational at the beginning of next year, three diplomats told me.
FILE PHOTO: The Iranian national flags are visible on a square in Tehran on February 10, 2012, a day before the anniversary of the Islamic Revolution. REUTERS / Morteza Nikoubazl / Photo File
This mechanism, called "special vehicle", is designed to circumvent the sanctions, under which Washington can remove any bank facilitating oil transactions with Iran.
The SPV would operate as a barter system, avoiding the US financial system by using an EU middleman to manage trade with Iran. This would ensure that Iranian oil bought by Europeans could be paid for with EU goods and services of the same value.
"We are trying to set up the SPV before 4 November and are confident we can do it," said an EU diplomat. "It will not be operational immediately. It will take time and it will take months. "
The physical location of the headquarters and other problems still need to be solved, added the diplomat.
A second diplomat said that everything was in place to organize a symbolic date to show Tehran that the EU was keeping its promises. Federica Mogherini, head of the bloc's foreign policy, announced the plan at the United Nations General Assembly in New York in September.
The EU, with the support of China and Russia, hopes to keep Tehran in a 2015 nuclear arms control agreement by allowing trade to flow despite sanctions imposed by the United States.
"We must show the Iranians that we are working to enforce the (nuclear) agreement against US sanctions, to keep them in power, but also to say that we can only advance so far, so fast," he said. a third diplomat. .
EU diplomats said the SPV would not be enough to preserve all trade. The goal was to convince Iran to honor its commitments under the Iranian nuclear deal signed by the world powers in Vienna, which US President Trump took part in May.
The SPV will follow several other EU initiatives to protect European companies with Iran from US sanctions that Trump re-imposes, as he seeks to punish Tehran for what the West sees as the role of the EU. Iran in the war in Syria and Yemen.
The EU agrees with Washington that Iran has failed to contain its arsenal of ballistic missiles and supports attorneys across the Middle East. But France, Britain and Germany say the 2015 nuclear deal is separate and should be maintained as it prevents Iran from developing a nuclear bomb.
"This is an important signal and they can see that we are doing it," said the first diplomat, highlighting the blocking status and other efforts. comply with US sanctions.
