Europe continues to work on creating a special financial channel with Iran, also known as the SPV, says the continent’s foreign policy chief.
“The work continues in 2019,” wrote Federica Mogherini in her latest blog post, titled 12 things to bring with us in 2019. She hasn’t set an exact date on when it will finally be functional.
Earlier, she had announced the channel will be ready by the end of 2018. It did not come through by that time, though.
She was referring to three European countries, Britain, France, Germany’s commitment to help Iran sell oil and use its money to buy vital commodities through the SPV which stands for Special Purpose Vehicle.
“In September – after a meeting with the Foreign Ministers of China, France, Germany, Russia, the United Kingdom and Iran, on the sidelines of the UN General Assembly – European countries have started preparations to create a mechanism to let our firms continue their legitimate business with Iran,” explains the European foreign policy chief.
Europe rushed to prevent Iran from scrapping the agreement after President Donald Trump’s Administration withdrew the US from the international deal signed in 2015 with the three European countries, also known as the E3, Russia, China and Germany. Washington also reinstated the economic sanctions that have been targeting Iran oil and banking sectors, that have caused huge damages to the flow of commodities to the country.
Earlier, Chair of the European Parliament's Delegation on Relations with Iran, Tarja Cronberg, predicted should the SPV start functioning, it will help Small and Medium-sized Enterprises (SMEs) to keep up trade with Iran.
Watch video: Tarja Cronberg: SPV to benefit SMEs, food and medicine trade
Iran Chamber Newsroom has reported how ordinary Iranian citizens are the ones paying high prices for the sanctions that were supposed to exempt humanitarian aid.
Switzerland, 60% of whose exports to Iran are made up of medicine and medical equipment, is also hard at work to install its own parallel payment channel to prevent disruption of cancer medicine and high-quality medical equipment to the country.
According to Sharif Nezm-Mafi, president of Iran-Swiss joint Chamber of Commerce, the mechanism is expected to be in place by mid-January.
Tehran is already in talks with regional powers, Russia, China and India to continue trade based on each country’s national currency. On Tuesday, New Delhi announced it’s allowing the clearance of Iran oil payments in rupee, removing the withholding tax.