In a significant move, France, Germany, and Great Britain have established a European mechanism to facilitate non-dollar trade with Iran, effectively bypassing US-imposed sanctions. This mechanism, known as the European Special Purpose Vehicle (SPV), is designed to enable monetary transfers between Iran and the European Union, with an initial focus on small, humanitarian transactions.
The development of this system has been a complex process, fraught with delays. It has been in the works for several months and is not expected to become operational until later in the year, as technical details are still being finalized. France and Germany have taken the lead in managing the system, which will be overseen by a German banker and based in France. Britain will also be a shareholder in the SPV, and it is hoped that other countries will join in due course.
However, the SPV will not cover transactions related to the oil sector, which has been one of the sectors most severely impacted by US sanctions. There are also concerns about whether the SPV will be able to achieve its initial short-term goal of enabling Tehran to import essential food and medicine at affordable prices.
This development comes in the wake of the 2015 deal that sought to restrict Iran’s nuclear ambitions in exchange for lifting sanctions on Iran’s economy. The establishment of the SPV represents a significant step in navigating the complexities of international trade and sanctions, and underscores the ongoing efforts of European countries to maintain economic ties with Iran amidst geopolitical tensions.
