Iran says not to wait forever for Europe’s special payment mechanism

Iran has warned that it cannot wait forever for the establishment of a payment mechanism the Europeans have promised to launch in order to maintain trade with Tehran.

“We’ve so far witnessed that the European countries have the political will [to maintain business relations with Iran], and have not seen any sign that proves otherwise,” Deputy Foreign Minister Abbas Araqchi said on Friday.

Europe has promised to establish the Special Purpose Vehicle (SPV), a mechanism which is supposed to bypass US sanctions against Tehran.

Araqchi said, “The Europeans have so far failed to introduce operational solutions required for securing Iran’s benefits under the deal, and we are not going to wait forever. We’ll take appropriate decisions in due time.”

“We are currently aware of the efforts being made [by Europe], and they regularly brief us on these efforts; therefore, we believe we should give them more time so that Europeans would be able to operationalize these solutions,” Araqchi said.

“We see that the US is exerting enormous pressures, and there are very serious technical and legal barriers to the establishment of the mechanism, which Europeans are trying to remove,” he told Iran’s official news agency IRNA during his visit to Algeria.

“But they should know the time is certainly not unlimited,” he added.

He also pointed to a report by the Wall Street Journal that Germany and France are going to host the SPV to keep trade with Iran in defiance of US sanctions, and said he cannot confirm it because of the “sensitivity of the issue”.

“The Americans are seeking to block all the paths, and have already started exerting pressure on the countries that try to establish the payment mechanism,” Araqchi said.

Luxembourg and Austria, under the US pressure, refused to host the SPV, with Luxembourg officials being warned that hosting the mechanism could damage the country’s place as a major financial center hosting many international investment funds, European diplomats said.

The Wall Street Journal reported on Monday that the European governments participating in the payment channel will directly manage the clearing house in order to prevent the US from putting direct sanctions on it.

According to the diplomats, British officials are also mulling over joining France and Germany in order to rescue the European attempt to circumvent the US sanctions and salvage the Iran nuclear deal following the US’ withdrawal in May.

The report said if France plays host to the SPV, Germany will take the helm, and vice versa.

According to the report, the mechanism is not finalized yet and finishing touches will be discussed on the sidelines of the 2018 G20 Buenos Aires summit, scheduled to begin on November 30.

Europe has been taking a range of measures to meet the Iranian demand for practical guarantees.

Iran and the European side have been discussing ways to conduct non-dollar trade in order to offset the US sanctions.

On September 24, Iran and its five partners released a joint statement announcing the setting up of the SPV to facilitate continued trade with Iran, bypass the US financial system, and avoid any impact of America’s secondary sanctions.