By Mohammad Ghaderi - Twitter: @ghaderi62 - Email:

The EU's purposeful delay in implementing the SPV

October 28, 2018 - 17:21

TEHRAN - Reuters has recently reported that a new European Union mechanism to facilitate payments for Iranian exports should be legally in place by Nov. 4, when the next phase of U.S. sanctions hit, but will not be operational until early next year, three diplomats said.

The mechanism, a so-called special purpose vehicle (SPV), is designed to circumvent the sanctions, under which Washington can cut off any bank that enables oil transactions with Iran.

The SPV, which could incorporate a barter system, aims to sidestep the U.S. financial system by using an EU intermediary to handle trade with Iran. It could ensure, for example, that Iranian oil bought by Europeans could be paid for with EU goods and services of the same value.

“We’re trying to put the SPV in place before Nov. 4 and are pretty confident we can do it,” one EU diplomat said. “It won’t be operational immediately. It will take time and the time that takes will be months.”

Accordingly, there are some points that should be taken into consideration. The fact is that the content of the nuclear agreement will not be in effect for at least two months. Previously, some Western sources mentioned that the EU needs to be committed to the Joint Comprehensive Plan of Action since it can be considered as kind of confrontation with the U.S. unilateralism in the international system. Meanwhile, the unilateralism of the Tramp government in the international system and measures such as his withdrawal from the nuclear deal with Iran , or pulling out of the Paris agreement, hurt the European allies of the United States. However, European authorities have not taken any real action since April (which will guarantee the implementation of the JCPOA).

This is while Federica Mogherini, the EU external affairs chief, had previously stated that the European Union, Iran, China and Russia have set out a plan to sidestep unilateral U.S. sanctions against Iran. Mogherini said that the SPV was designed to facilitate payments related to Iran’s exports – including oil – and imports, so long as the firms involved were carrying out legitimate business under EU law.

Anyhow, European officials seem to be buying time to "complete their game" against Iran and the JCPOA. In this regard, the European authorities have had specific negotiations with the American officials. Most of these talks took place between the White House and the Elysees Palace. Officials from both France (representing the European troika) and the United States have been negotiating with each other since Trump's withdrawal from the nuclear deal. It was not without a reason that the U.S. secretary of state, Mike Pompeo, explicitly announced his agreement to negotiate with the French, German and British Foreign Ministers on how to deal with the JCPOA after pulling out of the nuclear deal. In any case, the purposeful delay of European leaders on implementing the nuclear deal seems to be rooted in the negotiations and agreements reached between the United States and the European Union.

The European officials' silence in the face of Reuters's recent report indicate that they are "completing the puzzle of the JCPOA". Many international observers and analysts believe that after the withdrawal of the United States from the nuclear deal with Iran, the European Union could, within a short time (even within a two month timeframe), launch its operational plan to deal with sanctions imposed by the United States, particularly in the oil, banking and credit markets. However, European officials refused to take any step in this regard.

Finally, it seems that the European Union's deliberate delay over Iran's nuclear deal and the implementation of a specific operational strategy in this regard are rooted in parallel talks between the White House and the European Union. Without a doubt, we'll hear more about the hidden dimensions of these talks in the future.

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