Brussels had announced in previous occasions that it’s working hard on the non-dollar financial channel and that it would become operational soon. This time it seems that the EU is closer and more exact in its timetable.
The European Commission said it’s seeking to launch “very soon” a special purpose vehicle to help European companies bypass U.S. sanctions on Iran, with three European diplomats saying the official unveiling could come as early as Monday, according to a Bloomberg report.
Progress has been slow in developing the SPV, a key element of the European Union’s effort to keep Iran from quitting the Joint Comprehensive Plan of Action, the 2015 accord to constrain the nation’s nuclear activities in exchange for sanctions relief. The U.S. pulled out of the deal in May and has since reimposed sanctions.
The EU, led by France, Germany and the U.K., has struggled to find a government willing to host the vehicle, which risks drawing criticism from the American administration. Still, EU foreign policy chief Federica Mogherini had said in December that the SPV would be established by the start of 2019.
Mogherini’s spokeswoman on Thursday indicated that work remains to be done.
“The SPV preparations have progressed; they are at an advanced stage,” the spokeswoman, Maja Kocijancic, told reporters in Brussels. “I hope that we can announce the launch very soon.”
The Trump administration has considered such efforts an attempt to evade its “maximum pressure” campaign on Iran. The U.S. will fully enforce its sanctions and hold accountable any individuals or entities that undermine them, according to an administration official who spoke on condition of anonymity.
The four EU diplomats who commented on the timetable all declined to be named because of the sensitivity of the matter. One of them cautioned that while the official launch had been set for Jan. 28, outstanding issues meant there could be a short delay. EU member states have agreed the SPV should be finalized by the end of the month, the diplomat said. Another diplomat said that while Jan. 28 was in play, the date had been pushed back before.
Officials representing the bloc’s 28 governments are set to discuss a draft text welcoming the agreement on the SPV at a meeting in Brussels on Friday, according to a person familiar with the process. The governments could then formally adopt it at their next regular meeting, which would be on Monday, the person said.
The EU has been considering a plan for Germany, France and Britain to share responsibilities for the special vehicle, two people familiar with the discussions told Bloomberg in December. Under that proposal, the entity could be based in France and led by a German, with the U.K. also playing a role, according to one of the people.
“We’re working on it together with the member states responsible,” Kocijancic said on Thursday without providing further details.
On Wednesday, French Foreign Minister Jean-Yves Le Drian said the European-backed trade mechanism aimed at facilitating non-dollar business with Iran in the face of US sanctions should be established in the coming days. He didn't announce an exact timetable, according to a Reuters report.