The Iran Project

Iran-EU ties in danger over implementing trade mechanism

January 15, The Iran Project – Tehran has criticized the EU for a delay in the implementation of the SPV financial mechanism, warning that the bloc should account for the “consequences” of the holdup.

The EU repeatedly claimed that it is working on a mechanism called the SPV to save the 2015 Iran nuclear deal. This was meant to skirt American sanctions on trade and financial transactions with Iran.

The European Union’s long-stalled SPV was supposed to have been functional by August 2018 when the first batch of US sanctions started. So far, the SPV has not been set up. The Europeans have postponed its implementation on two occasions. Many are asking if this is a delaying tactic by the EU.

Member of Iranian Parliament National Security and Foreign Policy Commission Alaeddin Boroujerdi said that any delay in the implementation of Europe’s trade mechanism will help Iran to strengthen its ties with China and Russia.

Shireen Tahmaasb Hunter, a professor of Political Science at Georgetown University, told the Tehran Times that “it was clear from the beginning that establishing a special and separate channel for commercial dealings between Iran and Europe would not be easy.”

“Not all EU members favor such measures. Many of them believe that pressure on Iran would lead to the desired result in other areas beyond JCPOA (Joint Comprehensive Plan of Action), although they still pay lip service to the agreement,” Hunter stated.

She noted that “I think Iran relied too much on Federica Mogherini’s assurances, but her influence is limited.”

Meanwhile, speaking to German magazine “Der Spiegel”, German Foreign Minister Heiko Maas said that Germany is pursuing the final requirements for implementation of Special Purpose Vehicle (SPV) for trade, adding that identifying a country to host the mentioned mechanism is among these requirements.

Also, addressing an oil exporters union conference, Deputy Oil Minister Amir Zamaninia announce that despite US pressure, the EU’s payment system will be set up soon.

He said that Europeans are making daily contacts for the establishment of a trade mechanism independent of the dollar to bypass the US sanctions, adding “despite the US pressure, none of the European officials have ever said setting up the payment system would be impossible, and it won’t be long before these efforts bear fruit.”

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