Several European countries have registered a transaction channel with Iran in order to facilitate trade despite US sanctions, German diplomats confirmed to DW on Thursday.
The channel, set up by Germany, France and the UK (E3), is called INSTEX - short for "Instrument in Support of Trade Exchanges."
Speaking while on a trip to Bucharest, Rumania, German Foreign Minister Heiko Maas said, "This step makes it clear that we are also going our way in a determined and united way within the European Union - even if others take a different view."
Earlier, the US State Department released a statement that said it does not expect the European Special Purpose Vehicle (SPV) designed to facilitate trade with Iran "will in any way impact our maximum economic pressure campaign.'
The payment channel allows for European countries to continue trade with Iran but could put them on a collision course with Washington.
What is INSTEX:
- A "Special Purpose Vehicle" that will allow European businesses to trade with Iran, despite strict US sanctions.
- According to media reports, INSTEX will be based in Paris and be managed by German banking expert Per Fischer, a former manager at Commerzbank. The UK will head the supervisory board.
- The European side intends to use the channel initially only to sell food, medicine and medical devices in Iran. However, it will be possible to expand it in the future.
Comment: It's likely intended for much larger transactions than merely food and medicine.
'Shared concerns'
"This is an important step and a political signal by E3, who feel duty bound to uphold the Iran nuclear deal as long as Iran fulfills all its obligations as set out in the treaty," German government sources told DW. "The E3 have emphasized their aim of facilitating legitimate trade relations with Iran."
Iranian Deputy Foreign Minister Abbas Araghchi told state television it was "a first step taken by the European side ... We hope it will cover all goods and items."
Belgian Foreign Minister Didier Reynders said that Europe did share US concerns about Iran but "at the end of the day it will be companies that decide whether or not they want to work in Iran, bearing in mind the risk of American sanctions."
Comment: Considering how selective the US has been in applying their unilaterally concocted rules up till now, any penalties will be based on power plays and allegiance rather than any strict code of conduct: Japan and 9 other countries importing Iranian oil after being 'granted' waiver from US sanctions
The US Embassy in Berlin said Washington did not expect the payment system to reduce economic pressure on Iran. An embassy spokesperson repeated US President Donald Trump's threat that all who continue to do business with Iran will be subject to US sanctions. The embassy spokesperson warned this could mean losing access to the US financial system and the ability to do business with US companies.
Attempt to save Iran nuclear deal: The Trump administration has warned the European Union against trying to sidestep sanctions on Iran. Trump pulled the US out of the 2015 Iran nuclear deal and reimposed sanctions last year. Along with fellow signatories Russia and China, the EU maintains that Iran has not broken its side of the deal and should be allowed to trade.
EU-Iran relations tested: Although Europe has been willing to show good faith since the US left the nuclear deal, relations with Tehran have recently worsened. The EU imposed sanctions this month over Iran's missile tests and alleged assassination plots on European soil.
Announcement scheduled at EU meeting: Further details about INSTEX are due to be revealed later on Thursday at a meeting of EU defense and foreign ministers in Bucharest.
Comment: See also: