The UK, Germany and France have created a new payments system to allow European businesses to trade with Iran without falling foul of US sanctions.
All three opposed last year’s decision by President Donald Trump to abandon a 2015 deal under which international sanctions on Iran were lifted.
Some of the US sanctions make it difficult for European banks to make direct payments to Iran.
The US said sanctionable activity with Iran risked “severe consequences”.
By creating a new payment channel, based in Paris, and managed by a German banker, the UK, France and Germany hope to enable companies to continue to trade with Iran.
Many other existing payment channels have links to the US, which means making payments to Iran is difficult.
For now the new payment system is expected to only apply to food and medical products which are not subject to sanctions. Oil, Iran’s main source of foreign exchange, will not be covered.
In a statement, the US Embassy in Berlin said: “As the President has made clear, entities that continue to engage in sanctionable activity involving Iran risk severe consequences that could include losing access to the US financial system and the ability to do business with the United States or US companies.”
However, it added it did not expect the new payments system, called the Instrument In Support Of Trade Exchanges (INSTEX), would “in any way impact our maximum economic pressure campaign” against Iran.
In 2015, Iran accepted curbs on its nuclear programme in return for the lifting of sanctions. However, last November the US reinstated all its sanctions on Iran. The White House said it was “the toughest sanctions regime ever imposed” on Tehran, targeting Iran and states that trade with it.
The EU tried to save the nuclear deal with Iran. However, earlier this month it announced fresh sanctions on a unit of the Iranian intelligence agency and two individuals over alleged assassination plots.
The EU accused them of attempting, or carrying out, attacks within several European countries.
Source : BBC