Europe’s financial mechanism for continuing trade with Iran has not been activated yet, because every European bank that steps forward to cooperate faces the United States’ threats, a lawmaker said.
“American authorities have … warned that they [the banks’ officials] would not even be allowed to enter the US if they cooperate with Iranian banks,” Morteza Saffari Natanzi, a member of Majlis National Security and Foreign Policy Commission, added.
According to Saffari, the European Central Bank, which had been urged to become involved as a solution, was also dissuaded by the US, ICANA reported.
“Unfortunately, the US constantly sabotages the efforts,” he said.
After withdrawing from the 2015 nuclear agreement with Iran in May, the US reimposed its sanctions with the purpose of disrupting the country’s trade with the world.
Other parties to the agreement have refused to abandon the deal, with the European Union taking the lead to salvage the accord by countering the effects of US restrictions on Tehran.
Updates to the Blocking Statute and the European Investment Bank’s external lending mandate to make Iran eligible were among the EU’s initial moves.
The statute bans any EU company from complying with the US sanctions against firms investing in or doing business with Iran and does not recognize any court rulings that enforce American penalties.
The second decision brings Iran within the remit of EIB’s external lending mandate by adding it to the list of countries outside the EU, which are eligible for EIB lending.
Essential Component
The EU’s most essential measure, however, is a financial mechanism, known as the Special Purpose Vehicle, which is aimed at maintaining trade with Iran through a non-dollar system so as to circumvent the US restrictions.
The system was set to be legally in place by November, when the strictest sanctions affecting the oil and banking sectors came into effect, and become operational by early 2019.
However, challenges have delayed its establishment.
The first trouble was where to establish the SPV, as no European country would agree to host it until France and Germany finally agreed to jointly take responsibility for the mechanism.
Cooperation on the part of European banks is now required to finally implement the system.
According to Saffari, a bank that has no dollar-based interaction with the US should come forward.
“A bank operating in Europe with no link to the dollar and reliance on the US [financial system] would be able to work with Iran,” Saffari said, adding that the Foreign Ministry is seriously pursuing the issue.
