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Cuba Eyes EU's Planned Iran Sanctions-Busting System

Iranian Foreign Minister Mohammad Javad Zarif, left, is welcomed by Cuban Foreign Minister Bruno Rodriguez, in Havana, Cuba, Monday, Aug. 22, 2016. Iran’s foreign minister begun a Latin American tour in Cuba, declaring Iran and Cuba united by their histor
Brussels, Nov 19, 2018 (AFP)

Cuba hopes a special payment system the EU is creating to get round US sanctions on Iran will help it sidestep its own Washington-imposed trade embargo, a senior official told AFP on Monday.

Brussels is working on a "special purpose vehicle" (SPV) -- a system for clearing payments to Iran -- as it seeks to keep trade flowing despite Washington reimposing sanctions after ditching the 2015 nuclear deal with Tehran.

The EU is desperate to keep the nuclear deal alive and hopes the SPV will persuade Tehran to stay on board by giving companies a way of trading with Iran without fear of US sanctions.

Infographic: Mechanism Of EU's Special Purpose Vehicle
Infographic: Mechanism Of EU's Special Purpose Vehicle

The SPV was announced in September but has made little headway, with several countries saying they will not host it, fearful of repercussions from the administration of US President Donald Trump.

Nevertheless, senior Cuban foreign ministry official Rodolfo Reyes told AFP after talks with EU officials that Havana was interested in the project.

"There was a mention of this instrument and we of course also raised the interest that we would have in any solution of this kind that would allow European companies to become increasingly involved in foreign investment and bilateral trade with Cuba," Reyes told AFP.

Despite a thawing of ties under Trump's predecessor Barack Obama, the US still has a sweeping economic embargo in force against Cuba that dates back to the 1960s.

The SPV would in theory allow Iran to keep selling oil and European companies to continue doing business in the country despite the US sanctions.

But it has proved difficult to get the project moving and some analysts doubt it would prove to be effective in any event.

Many major international companies have announced they are pulling out of Iran, and earlier this month the US announced a fresh set of sanctions aimed at cutting off Iran's banks from international finance and significantly cutting its oil exports.