Britain, France and Germany will launch a special payment mechanism Thursday that the EU hopes will help save the Iran nuclear deal by bypassing US sanctions, European sources told AFP.
The entity, to be registered in France with German governance and finance from all three countries, will allow Iran to trade with EU companies despite Washington reimposing sanctions after US President Donald Trump pulled out of the 2015 accord.
The three countries — the European signatories to the landmark deal that curbed Tehran’s nuclear ambitions in return for sanctions relief — are expected to issue a joint communique launching the project, which has been in preparation for months.
While the new institution, called INSTEX — short for Instrument in Support of Trade Exchanges — is a project of the three governments, it will receive the formal endorsement of all 28 EU members.
The announcement may come on the sidelines of a meeting of EU foreign ministers in Bucharest.
Washington has warned the EU against trying to sidestep its sanctions on Tehran, while the Europeans — along with the deal’s other signatories Russia and China — say Iran has not broken its side of the deal and should be allowed to trade.
The EU has growing concerns about Tehran’s ballistic missile program, as well as its human rights record, its interference in Middle East conflicts and recent attempted attacks against opposition groups in Europe.
Washington has warned it will vigorously pursue any company breaching its sanctions against the Islamic republic, and a number of major international corporations have already pulled out.
The new European scheme was originally intended to allow Iran to sell oil to the EU on a barter basis but, with Europe now buying very little Iranian oil, it is now aimed at small and medium-sized companies.
“We’ll have to wait and see who uses it,” a European source said.
Iran’s economic crisis has led to sporadic protests against the government in the past year.
The protests have seen unusual scenes of demonstrators chanting against continued Iranian spending of billions of dollars on regional proxy wars and support for terrorist groups, which many say has meant less investment in the struggling economy at home.
In recent years, Iran has provided financial aid to Palestinian terror groups Hamas and Islamic Jihad, Lebanon’s Hezbollah, Yemen’s Houthi rebels, and Shiite militias in Iraq. Since the start of the Syrian civil war in 2011, Tehran has poured a reported $6 billion into propping up president Bashar Assad’s government.
Rouhani has blamed the spontaneous demonstrations on “foreign media propaganda,” and has accused the US of waging “an economic war” against Tehran.
Iran regularly holds exercises to display its military preparedness and has vowed to respond strongly to any attack by Israel or the United States, both of which view it as a regional menace.