The remaining participants in the Joint Comprehensive Plan of Action (‘JCPOA’) or ‘nuclear deal’ with Iran have proposed the setting up of payment channels using a special purpose vehicle (‘SPV’) with Iran to maintain economic dealings. The move follows the US withdrawal from the JCPOA on 8 May.
In the months following President Trump’s announcement, China, France, Germany, Russia, UK and the EU have repeatedly emphasised their continued commitment to the JCPOA, which allows Iran sanctions relief in exchange for a scaling back of its nuclear capabilities.
At a ministerial meeting held in New York on 24 September, a SPV was proposed ‘to facilitate payments related to Iran’s exports (including oil) and imports that will assist and reassure economic operators pursuing legitimate business with Iran.’
The proposal comes in advance of the re-imposition of the second batch of US sanctions on Iran on 5 November, which cover transactions involving petroleum or petroleum products, transactions by foreign financial institutions with the Central Bank of Iran and dealings with the energy, shipping and shipbuilding sectors.
The extraterritorial reach of US sanctions is a major concern for foreign businesses operating in Iran. The EU has already attempted to mitigate the impact of US sanctions by updating its Blocking Regulation, which came into force on 7 August. This allows EU operators to recover damages caused by US sanctions and nullifies the effect of relevant court rulings in the EU. It also forbids compliance with the sanctions, unless non-compliance would seriously damage the interests of that business or that of the EU.
The joint ministerial statement can be found here: