France aims to lead the European Union (EU) efforts in defying U.S. sanctions on Iran, by supporting the creation of a payment mechanism to keep trade with Iran and making the euro more powerful, France’s Economy Minister Bruno Le Maire said in an interview with the Financial Times.
“Europe refuses to allow the US to be the trade policeman of the world,” Le Maire told FT, adding that the EU needs to "affirm its sovereignty" in the rift between the EU and the United States over the sanctions on Iran.
The EU has been trying to create a special purpose vehicle (SPV) that would allow the bloc to continue buying Iranian oil and keep trade in other products with Iran after the U.S. sanctions on Tehran return.
The idea behind the SPV is to have it act as a clearing house into which buyers of Iranian oil would pay, allowing the EU to trade oil with Iran without having to directly pay the Islamic Republic.
As the U.S. sanctions on Iran snapped back on Monday, the SPV hasn’t been operational and reports have had it that the undertaking is very complicated and politically sensitive. The bloc is also said to be struggling with the set-up, because no EU member is willing to host it for fear of angering the United States, the Financial Times reported recently, citing EU diplomats.
On Monday, the Belgium-based international financial messaging system SWIFT said that it would comply with the U.S. sanctions on Iran and would cut off sanctioned Iranian banks from its network. This was a blow to the EU’s attempts to defy the U.S. sanctions.
The decision by SWIFT highlights the need for an SPV, France’s Le Maire told FT, but he refused to name countries that could host such a special vehicle. Yet, there have been expressions of interest, he told FT.
Meanwhile, the United States has been dismissive of the idea of an SPV, and Brian Hook, U.S. Special Representative for Iran and Senior Policy Advisor to the Secretary of State, said in a press briefing with European reporters on Monday:
“We have not seen much, if any, demand for the Special Purpose Vehicle. I think if you take a look at the over 100 corporations that have decided to choose the United States market over the Iranian market, they’re not looking to avail themselves of any type of vehicle.”