TEHRAN – Foreign Minister Mohammad Javad Zarif said on Thursday that at least seven central banks have agreed to create a special financial mechanism to have relations with Iran.

Hailing Europeans’ efforts to provide Iran with a financial mechanism to save the Iran nuclear deal, Zarif said the proposed “Special Purpose Vehicle” will come into effect in the near future, IRIB news reported.

He stated that the financial mechanism aimed at easing trade with the Islamic Republic will come into force in the near future “but what they want is an institution that can work beyond Iran, which may take longer.”

Source: TEHRAN TIMES

Five world powers and Iran agree to set up legal entity to circumvent US sanctions after Trump pullout from 2015 deal.

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.

US President Donald Trump withdrew from a 2015 nuclear deal in May and re-imposed sanctions on the country.

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.

The EU, along with Russia and China, said in a joint statement that the so-called “Special Purpose Vehicle” will “assist and reassure economic operators pursuing legitimate business with Iran”.

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”.

2015 nuclear deal

Known formally as the Joint Comprehensive Plan of Action (JCPOA), the Iran nuclear deal ended a nearly 12-year standoff between Iran and Western powers in 2015.

It was spearheaded by the Obama administration and saw the lifting of international sanctions.

The nuclear agreement is meant to prevent Tehran from developing nuclear weapons, but Trump announced in May he was unilaterally pulling out because he felt it wasn’t strong enough and didn’t cover other issues of concern to the US and its allies, such as Iran’s military influence in the Middle East and its ballistic missile programme.

The US has also accused Iran of promoting international terrorism, a charge Tehran vehemently denies.

A second round of US sanctions is expected in November, aimed at putting a stranglehold on Iranian oil exports.

Meanwhile, the EU has vowed to stick with the deal and updated legislation to protect European companies from future sanctions.

The EU, US allies and the international nuclear watchdog IAEA maintain that Iran continues to abide by the terms of the agreement.

‘Last chance’

Mogherini said on Monday the decision to set up such a vehicle had already been taken and that technical experts would meet again to flesh out the details.

Al Jazeera’s Shihab Rattansi, reporting from the UN headquarters in New York, said the new entity will act as a “clearing house, a middleman, so to speak, between Europeans and Iranians as they try to do business.”

“If the Italians want to buy some Iranian oil, they will wire the money to this entity which will then handle the financial transactions from there and vice versa,” he said.

“There will be no involvement of commercial banks and central banks, both of whom are terrified at the prospect of US retribution if they are seen to be going against US sanctions.”

Rodger Shanahan, a research fellow at the Lowry Institute for International Policy, called the EU agreement “a poke in the eye for the US”.

“I think it reflects the kind of the attitude that the Europeans have had about the decision by President Trump,” he told Al Jazeera in an interview from Sydney, Australia.

“They have been quite upset about going against international norms of pulling out of the agreement. At the same time, all external auditors have found that Iran has been complying with the agreement.

“So the Europeans want to try and save the agreement and they’re seeing this as really the last chance.”

‘Math on Iran’s side’

The EU move came a day before Trump and Iranian President Hassan Rouhani separately address the UN General Assembly on Tuesday, with the US leader expected to take a hard line on Iran.

“Iranian leaders are likely to be seen pushing their partners – the four remaining signatories plus one – to try to save some of the economic benefits from the nuclear deal,” said Al Jazeera’s Zein Basravi, reporting from the Iranian capital, Tehran.

Despite opposition from the EU, a number of businesses including French energy giant Total and carmakers Peugeot and Renault as well as Germany’s Siemens and Daimler have already suspended operations in Iran for fear of triggering US sanctions.

But Iranian officials have told Al Jazeera that up until now oil sales have more or less remained the same, Basravi reported.

“International demand and market forces dictate that the math is on Iran’s side,” he said.

“So, unless the Trump administration and the White House are willing to accept a price hike, unless the international market is willing to see oil prices go up, then really the math will remain on Iran’s side and oil sales are not expected to fall.”

The International Court of Justice (ICJ) will rule on Iran’s lawsuit against the United States on October 3.

A public meeting will be held in the morning at the Peace Palace in The Hague, during which Judge Abdulqawi Ahmed Yusuf, president of the court, will read the court order.

Iran filed a lawsuit filed with the ICJ, also known as the World Court, saying the US sanctions, which are damaging its economy, violate terms of a little-known 1955 Treaty of Amity between the two countries, Mehr News Agency reported.

The ICJ is the United Nations tribunal for resolving international disputes. Its rulings are binding, but it has no power to enforce them and on rare occasions they have been ignored by some countries, including the United States.

The ICJ has so far ruled that the 1955 treaty is still valid, even though it was signed long before the 1979 Islamic Revolution that triggered decades of hostile relations with Washington, CNBC reported.

US President Donald Trump pulled out of a 2015 pact between Iran and major world powers under which sanctions were lifted in return for Tehran accepting curbs on its nuclear program. The Trump administration then announced unilateral plans to restore sanctions against Tehran.

Although Washington’s European allies protested against Trump’s move, most western companies intend to adhere to the sanctions, preferring to lose business in Iran than be punished by the United States or barred from doing business there.

Source: FINANCIAL TRIBUNE

European powers try to keep Iran nuclear deal alive amid US sanctions

WASHINGTON/PARIS: Nations that struck the 2015 Iran nuclear deal, except for the United States, meet on Monday in what many diplomats fear may prove a quixotic effort to keep the agreement alive after US sanctions targeting Iranian oil exports resume in November.

Ministers from Britain, China, France, Germany, Russia and Iran will gather in New York at 8 PM EDT on Monday (0000 GMT Tuesday) to grapple with US President Donald Trump’s May 8 decision to withdraw from the deal and restore the full force of US sanctions on Iran.

Their delicate, and perhaps unrealistic, task is to build a case for Tehran to respect the deal’s limits on its nuclear program even though Washington has pulled out, depriving Iran of many of the economic benefits it was promised.

Iranian President Hassan Rouhani “needs arguments to defend the deal in the face of the radicals. He needs us to give him ammunition,” said a senior European diplomat, referring to Iranian hard-liners who oppose the agreement.

“We are trying to give him ammunition, but what we can do, to be honest, is limited,” the diplomat added.

The crux of the deal, negotiated over almost two years by the Obama administration, was that Iran would restrain its nuclear program in return for the relaxation of sanctions that had crippled its economy.

Trump considered it flawed because it did not include curbs on ballistic missiles or regional activity.

The United States began reimposing economic sanctions this summer and the most draconian measures, which seek to force Iran’s major customers to stop buying its oil, resume November 5.

Their impending return has contributed to a slide in Iran’s currency.

The rial has lost about two-thirds of its value this year, hitting a record low against the US dollar this month.

The European Union has implemented a law to shield European companies from US sanctions. Still, there are limits to what it can do to counter the oil sanctions, under which Washington can cut off from the US financial system any bank that facilitates an oil transaction with Iran.

“Hirt them more than us”

Many European companies are withdrawing or have withdrawn from Iran because of US sanctions that could cut them off from the American market if they stay.

Iran believes the United States acted in bad faith by withdrawing from the deal even as Tehran has adhered to its terms and has rejected US overtures to meet.

The most recent confidential report by the International Atomic Energy Agency, the Vienna-based UN watchdog, found Iran had stayed within the main limitations imposed under the deal, whose formal name is the Joint Comprehensive Plan of Action (JCPOA).

In recent weeks, Iranian officials have begun arguing that if the Europeans cannot preserve trade with Iran, perhaps Tehran should reduce, but not eliminate, its compliance with the accord.

On Saturday, Iranian Foreign Minister Mohammed Javad Zarif was quoted as telling Germany’s Der Spiegel magazine that Iran could “reduce its implementation” and possibly increase uranium enrichment activities if the deal was jeopardized by “the actions of the Americans and the passivity of the Europeans.”

European diplomats wish to avoid this.

Hoping to keep Iran’s nuclear program in check, they have told Tehran that if it stops carrying out the deal to the letter, they will have no choice but to restore their own sanctions.

“They keep telling us the situation is horrible, they are going to leave the accord or just keep partially implementing the deal. It’s the same old music, but for now they continue to implement the JCPOA,” said a second senior European diplomat.

“We (are) warning them that if they were to pull out it would hurt them more than us,” he added.

Source: INDIAN EXPRESS

Opec chief says cartel must stick together amid sanctions on Iran