Federica Mogherini, the European Union's high representative for foreign affairs, said member states have agreed to devise a new financial scheme that will allow countries to legally conduct business with Iran despite the risk of sanctions from the United States.
Mogherini told the 73rd United Nation General Assembly on Sept. 24 that France, Britain, Germany, Russia, and China - the remaining members of the Iran nuclear deal which is officially known as the Joint Comprehensive Plan of Action or JCPOA - agreed to set up the "special purpose vehicle" or SPV.
In a joint statement released with the five nations, Mogherini explained that the SPV would allow France, Britain, Germany, Russia, and China to establish a legal entity to facilitate legitimate financial transactions with Iran, particularly in the exportation and importation of Iranian products, most especially the oil. This step shall permit European companies to continue business with Iran within the bounds of the European Union Law. This legal entity could also be opened to other trade partners in the world.
It would be recalled that U.S. President Donald Trump pulled the United States out of the JCPOA. He alleged that Iran was not really being transparent on whether it has really limited its production of uranium which it could use in the suspected development of a weapon for mass destruction. The Iran nuclear deal was negotiated during the Obama administration and has faltered over Trump's regime.
After its withdrawal from the Iran nuclear deal, the Trump administration began re-impositions of trade sanctions on Iran. The United States restricted countries from doing businesses with Iran.
The sanctions saw Iran's aviation, automotive, metal, and gold sectors suffered but the worse is still to come as second rounds of penalties on its oil sector will take effect later this year. Oil makes up as much as 70 percent of Iran's export. The nation is in fact, the world's seventh-largest oil producer.
In its joint statement, the EU and the five remaining participants of the JCPOA asserted that Iran remained true to the agreement and that it effectively implement the needed actions with regard to its nuclear-related activities. The statement highlighted that Iran's compliance has also been confirmed by 12 consecutive reports published by the International Atomic Energy Agency.
The EU, France, Britain, Germany, Russia, and China wanted to protect free trade with the establishment of the SPV, the statement reiterated. This way, the nations could protect their economic freedom by normalizing their trade and economic ties with Iran.
