EU: Financial mechanism with Iran 'to be implemented soon'
January 19, 2019 - A European Union’s spokesperson said the bloc will soon launch a long-awaited financial mechanism, known as special purpose vehicle (SPV), to keep business ties with Iran.
“The EU is committed to have continued financial ties with Iran,” the spokesperson told IRNA under the condition of anonymity.
The source said that the bloc has already updated its Blocking Statute, adding that it has also facilitated trade with the Islamic Republic via the European Investment Bank.
The Blocking Statute allows EU operators to recover damages arising from US extraterritorial sanctions from the persons causing them and nullifies the effect in the EU of any foreign court rulings based on them.
EU delays
Meanwhile, a senior Iranian official said the EU’s repeated delays to implement a financial mechanism with Iran would have a negative effect on the bloc’s interests in the long run.
“Iran’s public opinion’s view towards the Europe’s approach (after the US withdrawal from the Iran nuclear deal) has become more negative,” said Kamal Kharrazi, the head of Iran’s Strategic Council on Foreign Relations.
“Today, EU’s interests require the bloc to take practical steps to save the JCPOA,” he added.
He was referring to the formal name of the 2015 Iran nuclear deal – the Joint Comprehensive Plan of Action – with world powers, which the US abandoned in May.
Kharrazi made the remarks during a meeting with a delegation from the Institute of International Affair (IAI), an Italian think tank, in Tehran on Saturday.
European states have been scrambling to ensure Iran gets enough economic benefits to persuade it to stay in the deal.
The remaining EU members, Britain, France and Germany, to set up the SPV with Iran to avoid the agreement’s collapse are struggling as Washington has said any firms dealing with Teheran will be barred from doing business in the United States.
EU approach ‘unacceptable’
Kharrazi slammed the repeated delays of the EU in implementing the long-promised financial mechanism.
“That the European Union countries cannot support and direct their companies to cooperate with Iran is not tenable and acceptable,” Kharrazi said.
“This means that one cannot trust the signature of European countries.
“If the European governments did not have any sway over their companies, why did they negotiate with Iran in the first place?”
The SPV, which could incorporate a barter system, aims to sidestep the US financial system by using an EU intermediary to handle trade with Iran. It could ensure, for example, that Iranian oil bought by Europeans could be paid for with EU goods and services of the same value.
EU diplomats have said the SPV would not be enough to preserve all trade. The aim is to convince Iran to keep its commitments under its nuclear agreement with world powers.
Kharrazi called on the European Union not to bow to the US demands to let the deal collapse, saying in case the bloc caves in to such demands “Europe’s security will also be overshadowed by the collapse of the deal.”
The Italian delegation, for its part, said the bloc does not agree with the US withdrawal from the JCPOA, adding that Iran-EU’s scope of cooperation is more than just the nuclear deal.
Acknowledging the US violation in abandoning the deal, the members of the delegation, however, said the bloc’s relations with the US “is deeply intertwined and that the EU is heavily relying on the US.”