EU’s special Iran payment channel could take effect before November: Mogherini

EU foreign policy chief Federica Mogherini says the bloc’s initiative to facilitate payment to/from Iran as part of efforts to save the 2015 nuclear deal could be in place before November, when the US is to re-impose the second batch of its anti-Iran sanctions.

Mogherini said Wednesday she believes the “Special Purpose Vehicle (SPV)”, which is aimed at keeping trade with Tehran flowing while the US sanctions are in place, will be established before November even though it is still at an initial stage now.

The plan to create the special payment channel was first announced in a joint statement by Mogherini and Iranian Foreign Minister Mohammad Javad Zarif on Monday, after a ministerial meeting of Iran and the remaining parties to the nuclear agreement, officially known as the Joint Comprehensive Plan of Action (JCPOA).

“Mindful of the urgency and the need for tangible results, the participants [of the Monday meeting] welcomed practical proposals to maintain and develop payment channels, notably the initiative to establish a Special Purpose Vehicle to facilitate payments related to Iran’s exports, including oil, and imports, which will assist and reassure economic operators pursuing legitimate business with Iran,” the statement read.

“The participants reaffirmed their strong will to support further work aimed at the operationalization of such a Special Purpose Vehicle as well as continued engagement with regional and international partners,” it added.

The statement also said the remaining parties to the JCPOA were determined to “protect the freedom of their economic operators to pursue legitimate business with Iran.”

Mogherini’s remarks come as the EU’s SPV plan has outraged the US officials. Secretary of State Mike Pompeo told a gathering of the so-called “United Against Nuclear Iran” in New York that he was “deeply disappointed” that the remaining countries in the nuclear deal plan to set up a special payment system with Iran to bypass US sanctions.

He also condemned the plan as “one of the most counterproductive measures imaginable”.

US-EU rift deepens over Iran sanctions

Tensions have escalated between the US and European Union countries over their plan to preserve business with Iran and avoid renewed American sanctions.

In an address to the same meeting, US National Security Adviser John Bolton also blasted the EU plan, and pressed the SWIFT global payments messaging system to reconsider dealing with the Islamic Republic.

He said his country would not allow the EU or anyone else to undermine the “aggressive and unwavering” enforcement of US sanctions on Iran.

“The European Union is strong on rhetoric and weak on follow-through. We will be watching the development of this structure (SPV) that doesn’t exist yet and has no target date to be created. We do not intend to allow our sanctions to be evaded by Europe or anybody else,” Bolton said.

Earlier, the EU also promised to protect firms against the impact of US sanctions for doing business with Iran.