EU and Iran agree on new payment system to skirt US sanctions

[left-of-center2012]

Source: Al Jazeera

In a major snub to the United States, the European Union has decided to set up a new mechanism to enable legal trade with Iran without encountering US sanctions.

The EU will create new payment channels to preserve oil and other business deals with Iran, Federica Mogherini, the bloc's foreign policy chief said late on Monday, in a bid to evade US punitive measures.

Mogherini's announcement came after a meeting with foreign ministers from Britain, France, Germany, Russia, China, and Iran on the sidelines of the United Nations General Assembly in New York.

"In practical terms this will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world," she told reporters after the closed-door meeting.

Read more: https://www.aljazeera.com/news/2018/09/eu-iran-agree-payment-system-skirt-sanctions-180925050920569.html

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The statement added that the six countries signatory to the 2015 nuclear agreement "reconfirmed their commitment to its full and effective implementation in good faith and in a constructive atmosphere".

[elmac]

1. EU would be wise to seperate themselves from fascist USA

as much as they can.

[Submariner]

2. Don the Con and Bibi are going to be pissed

They want to start a war with Iran and this is a good hint that NATO will not join them in that venture, as long as Iran keeps to the 2015 nuclear deal, and by all appearances they are complying.

[Eliot Rosewater]

3. Putin has ordered rump to destroy our economy, trade war is step one.

[roamer65]

4. Long term the dollar is toast.

Once this kicks in and starts working for all participants, the dollar will not be needed for international trade.

[roamer65]

5. Not one mention of this news on any of our media.

They are scared to run it.

[Takket]

6. Our influence in the world is diminishing.

[Sgent]

7. A Bloomberg article with more details

https://www.bloomberg.com/view/articles/2018-09-25/europe-finally-has-an-excuse-to-challenge-the-dollar

The new plan appears to focus on this third option. Mogherini indicated that Germany, France and the U.K. would set up a multinational state-backed financial intermediary that would deal with companies interested in Iran transactions and with Iranian counter-parties. Such transactions, presumably in euros and pounds sterling, would not be transparent to American authorities. European companies dealing with the state-owned intermediary technically might not even be in violation of the U.S. sanctions as currently written. The system would be likely be open to Russia and China as well.

Europe would thus provide an infrastructure for legal, secure sanctions-busting — and a guarantee that the transactions would not be reported to American regulators.

It would be pointless to sanction the special purpose vehicle because the U.S. would have no way of knowing who deals with it, and why. All the U.S. could do is sanction the participating countries’ central banks or SWIFT, the Brussels-based financial messaging system, for facilitating the transactions (if the special purpose vehicle uses SWIFT, rather than ad hoc messaging). That, Hellman and Batmanghelidj wrote, would be self-defeating: “There are two possible outcomes if these institutions proceed to work with Iran despite U.S. secondary sanctions. Either U.S. authorities fail to take enforcement action given the massive consequences for the operations and integrity of the American financial system, serving to “defang” the enforcement threats and reduce the risk of European self-sanctioning on the basis of fear, or U.S. authorities take such an enforcement action, a step that would only serve to accelerate European efforts to create a defensible banking architecture that goes beyond the Iran issue alone.”