EU struggles to find host for Iran trade mechanism

BRUSSELS/PARIS: The European Union has so far failed to find a country to host a special mechanism to trade with Iran and beat newly reimposed US sanctions, three diplomats said, as governments fear being targeted by US countermeasures.

Voicing opposition to US policy on the day Washington announced a new raft of sanctions on Iran, the European Union yesterday reissued its November 2 statement saying it was still setting up the socalled special purpose vehicle (SPV).

The European Union had hoped to ready its SPV, which is designed to circumvent the US sanctions, by the time of the sanctions announcement by the US yesterday.

No EU nation has so far volunteered to host the entity, the EU diplomats said. Several states have been asked by EU foreign policy chief Federica Mogherini to consider being the headquarters, as the bloc tries to uphold the arms control accord, which US President Donald Trump withdrew from in May.

While the European Commission declined to comment yesterday, European Economic Affairs Commissioner Pierre Moscovici said ‘‘the European Union does not approve of’’ the reimposition of US sanctions lifted under the 2015 nuclear deal.

Brian Hook, Washington’s special representative for Iran, underscored the risks for European companies, warning that any EU country hosting the SPV could potentially be sanctioned.

‘‘The United States will not hesitate to sanction any sanctionable activity in connection with our Iran sanctions regime,’’ Hook said in a telephone call with European reporters when asked about the vehicle.

The SPV, which could incorporate a barter system, aims to sidestep the US financial system by using an EU intermediary to handle trade with Iran. It could ensure, for example, that Iranian oil bought by Europeans could be paid for with EU goods and services of the same value.

A senior French diplomat said Paris was confident the mechanism would be legally in place soon, but things needed to be fully cemented first. — Reuters