UK, France, Germany create payments system to thwart US sanctions and continue business with Iran
The UK, Germany, and France have created a new payments system to allow European businesses to trade with Iran despite US sanctions.
“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,” said German Foreign Minister Heiko Maas, speaking after a meeting with the French and British foreign ministers in Bucharest.
The payment channel allows for European countries to continue trade with Iran but could put them on a collision course with Washington.
In a statement, the US Embassy in Berlin said: “As the President has made clear, entities that continue to engage in sanctionable activity involving Iran risk severe consequences that could include losing access to the US financial system and the ability to do business with the United States or US companies.”
However, it added it did not expect the new payments system, called the Instrument In Support Of Trade Exchanges (INSTEX), would “in any way impact our maximum economic pressure campaign” against Iran.
President 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 the Islamic Republic of Iran has not broken its side of the deal and should be allowed to trade.
Earlier this month the German government revoked Iranian airline Mahan’s right to operate in Germany over Iran’s illegal activities in Europe, including the discovery of a spy working as a translator for the country’s armed forces.
The airline, which has been on a United States sanctions list since 2011, is used for military purposes by Iran’s Revolutionary Guards as well as for terrorist activities.
Several European Union countries accuse Iran of carrying out spying operations or planning terror attacks on the continent. The Netherlands accused Iran of two killings on its soil and joined France and Denmark in alleging Tehran plotted other attacks in Europe.