FRANKFURT AM MAIN (AFP) -

Germany, France and Britain are mulling setting up a new financial institution to allow EU trade with Iran to continue despite American sanctions renewed by US President Donald Trump, German media reported Friday.

The three countries could set up a "Special Purpose Vehicle" (SPV) -- a firm resembling a clearing house that would cut Tehran out of the financial loop while still allowing trade, news weekly Der Spiegel and business daily Handelsblatt reported.

For example, Iran could ship oil to a Spanish firm, accumulating credit that could be used to pay a German machine-tool manufacturer for goods going the other way -- without any money passing through Iranian hands.

Spokespeople for the German economy and finance ministries told AFP the scheme was one of several options capitals are discussing with the European Commission to create "independent payment channels" to Tehran.

European Commission spokeswoman Maja Kocijancic said Brussels wants "to make sure the effects of the sanctions are minimized for companies that want to do legitimate business with and in Iran and they can still have access to necessary finance," adding that "currently the work is ongoing".

Trump's decision in May to withdraw Washington from a 2015 deal with Iran, under which the country agreed to freeze its nuclear weapons program in exchange for slackening of economic sanctions, dismayed diplomats across Europe.

Since then EU chiefs have been scrambling to find a way for their firms to continue trading with the Islamic republic.

Banks that usually execute the payments in international deals fear themselves falling foul of American reprisals if they continue to enable business with Iran.

While Berlin, London and Paris are driving the scheme, Der Spiegel reported it would be open to other EU member states if it is set up.

Italy is reportedly also interested in participating.