‘Swiss payment channel with Iran could be in place by mid-January’

European countries have been trying to create a legal financial mechanism to keep up trade with Iran after Donald Trump Administration withdrew the US from the 2015 nuclear deal in May.

24 December 2018
ID : 1719
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A Swiss payment channel for the export of food, medicine and medical devices to Iran could be finalised by mid January, says president of Iran-Switzerland Joint Chamber of Commerce.

“[The payment channel could be in place] probably in the first half of January”, said President of Iran-Switzerland Joint Chamber of Commerce, Sharif Nezam Mafi in an interview with Iran Chamber Newsroom. “Don’t take me on that, but I’m assuming”, he immediately cautioned against high expectations that such a mechanism would be functional soon. He was speaking ahead of a seminar on Grain and Food Trade Association (GAFTA) arbitration for Iranian private companies held at the headquarters of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) in Tehran.   

Bern has been in rush to create its own financial channel that will help the humanitarian commodities such as food, medicine and medical devices flow as normally as possible into Iran after the US renewed its unilateral sanctions on Tehran that took effect 5th November.

“Switzerland is working on establishing a payment channel for the export of food, medicine and medical devices to Iran,” the Swiss State Secretariat for Economic Affairs said in a statement on December 9, adding that the country is “striving to make this channel operational as soon as possible,” according to Bloomberg. 

“It’s a direct Swiss initiative where the Swiss officials are directly negotiating with their American and Iranian counterparts to put together a system where this flow could continue and not be interrupted even in the future where things could get severe,” Nezam Mafi said.

The Swiss initiative will run parallel to the European financial channel, also known as the Special Purpose Vehicle (SPV), aimed at letting Iran to be able to sell oil in exchange for the vital goods it needs to import. EU foreign policy chief, Federica Mogherini, said a few weeks ago that system could come into effect by the year’s end. “I would expect this instrument to be established in the coming weeks so before the end of the year as a way to protect and promote legitimate business with Iran.”, Mogherini told reporters in Brussels on December 10.

“It’s a government initiative”, Nezam Mafi said referring to the Swiss plans to explore a working channel between Iran and Switzerland. “We are not aware of its details yet but we know that it’s going to include humanitarian products, mainly commodities, medicine and medical equipment”, he added.

The President of Iran-Switzerland Joint Chamber of Commerce stressed that although the mechanism will work in parallel to the European SPV, “its basic idea is very similar, that is, they should be able to ultimately use the deposits of the Iranian oil money for imports”.

Asked about why Switzerland took the initiative to launch the payment channel, the Iranian businessman told the Iran Chamber Newsroom that almost 60% of Switzerland's exports to Iran are commodities, medicine and medical equipment. “So Switzerland has a critical role in this area where it concerns humanitarian goods under the sanctions regime,” Nezam Mafi said.

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