The European Union has delayed the launch of a mechanism with Iran which would bypass US sanctions for non-dollar trade in oil and other goods and commodities.
The European Commission was scheduled to approve the Special Purpose Vehicle on Monday, linking the activation to expressions of concern about Iran’s ballistic missile program and its role in regional tensions.
An EU diplomat said Spain objected to an article about Europe’s talks with Tehran over the Iranian role in Yemen’s civil war. Madrid has not been represented in the meetings, which included Germany, France, UK, and Italy.
The Europeans may also have faced US sanctions if they proceeded. A “senior official said on Friday that the Trump Administration was prepared to “fully enforce its sanctions” against the Islamic Republic and “hold individuals and entities accountable for undermining them”.
Senator Tom Cotton, an Administration ally, warned, “The choice is whether to do business with Iran or the United States….I hope our European allies choose wisely.”
The Administration withdrew in May from the 2015 nuclear agreement, and imposed comprehensive sanctions — including on Iran’s energy and financial sectors — on November 5.
In September, the SPV was approved in principle between Iranian Foreign Minister Mohammad Javad Zarif and the EU’s foreign policy head Federica Mogherini. However, implementation stalled over which Euorpoean country would host the SPV, given the possibility of US retaliatory sanctions.
Last week European officials, including French Foreign Minister Jean-Yves Le Drian, said the launch was imminent.
However, the Iranian regime — which earlier this month indicated it had given up on the SPV — remained sceptical. The head of the Nuclear Energy Organization, Ali Akbar Salehi, said on Saturday, “Before it is too late, Europeans, in particular, should fulfill what they have promised beforehand; otherwise, I am afraid that the future developments will not be conducive.”
Iranian Foreign Office spokesman Bahram Qassemi said, “We have heard many promises during recent weeks, but we will wait for the official announcement.”
In recent weeks, the Rouhani Government’s emphasis on European links to counter US sanctions has been replaced with talk of a turn to China, India, and Russia. However, it is unclear if this would buffer an Iranian economy faced with a 60% drop in oil exports and long-term problems with production, investment, trade, and a weakened currency.
Protests and strikes have persisted throughout the country, with Iranian authorities cracking down on labor activists and detaining them.