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EU Official Says Special Trade Mechanism Is Not Ready Yet

EU foreign policy chief Federica Mogherini (left) and Iranian Foreign Minister Mohammad Javad Zarif attend a ministerial meeting of the P5+1 countries and Iran held on the sidelines of the of the UN General Assembly, Sept 2018. File photo
EU foreign policy chief Federica Mogherini (left) and Iranian Foreign Minister Mohammad Javad Zarif attend a ministerial meeting of the P5+1 countries and Iran held on the sidelines of the of the UN General Assembly, Sept 2018. File photo

A European Union official in Brussels denied an Iranian media report on Thursday that the special EU trade mechanism proposed to help Iran is ready to be activated.

Earlier, the official news agency IRNA had quoted an "EU spokesperson" as having said "on the condition of anonymity" that the Special Purpose Vehicle (SVP) for trade with Iran "is about to become operational."

Later Thursday, RFE/RL's correspondent in Brussels reported that a senior EU official told reporters the SVP is not ready yet and added that the trade issue is part of of a larger bundle of issues related to Iran.

The official spoke at a briefing on the condition of anonymity. He added that the SPV "is not ready" yet.

After this statement, it remains unclear why Iran's official news agency made the claim that EU is ready to launch the SVP.

The Iranian government has been under pressure by hardliners as EU did not meet the promise it made to facilitate Iran's international trade after the United States withdrew from the deal and imposed sanctions on Iran and vowed to punish foreign companies that would continue trading with Iran.

EU Foreign Policy Chief Federica Mogherini had said on December 10 that "a system to facilitate non-dollar trade with Iran and circumvent U.S. sanctions could be in place by year’s end."

The system has been provisionally called a Special Purpose Vehicle, which is supposed to facilitate trade with Iran, practically circumventing U.S. sanctions. However, this has not materialized, at least as of mid-January.

IRNA had quoted the anonymous spokesperson as having said that "EU has firm solutions for saving the JCPOA (Joint Comprehensive Plan of Action)," the official name for the nuclear deal with Iran.

Adding that "The SPV is currently at the last stages before becoming operational," IRNA's alleged source added, "We have updated the European Investment Bank's regulations, and European parties to the JCPOA, France, Germany and the UK are committed to preserve effective financial transactions with Iran especially via the SPV."

The comment came on the same day that Ayatollah Ahmad Jannati, the hardline secretary of the extremely influential Guardian Council, harshly criticized Iranian officials for “not burning” the JCPOA after the U.S. pulled out of the deal.

Jannati criticized EU for delaying the SVP, adding that like America, "Europe was also Iran's enemy and will not do anything to help Iran."

Iranian officials have repeatedly criticized the EU for delaying the SVP. Earlier this week Iranian nuclear chief Ali Akbar Salehi warned that Iran might be prepared to resume Uranium enrichment at the 20 percent level within a few days.

Salehi had said earlier that SPV would be operational by the beginning of 2019.

Iranian Supreme Leader Ayatollah Ali Khamenei told Iranian officials in January not to pin their hope on what Europe had promised to do.

Also, Iran warned on Wednesday that it might put an end to its cooperation with EU in the areas of immigration and anti-narcotics efforts.

In the meantime, no European country has accepted to host the financial mechanism to help Iran, fearing US secondary sanctions. Iranian Foreign Ministry officials had said earlier that European countries were taking secret measures to further the SVP.

The EU is against Iran's missile program and has already condemned and punished Tehran for its "terrorist activities" in Europe. However, it has remained committed to its obligations under JCPOA.

This week Iran did not help its case by launching a ballistic missile carrying a satellite into orbit. The satellite failed, but Washington says that these launches violate UN resolution 2231, which calls upon Iran from experimenting with missile technology, which can be potentially used to carry nuclear warheads.

France has joined in the criticism and has warned Iran not to launch ballistic missiles.

Following US withdrawal from the JCPOA, while criticizing Europe for its inaction, Iran's President Hassan Rouhani has been trying to convince his critics and political rivals that differences between the U.S. and EU over the nuclear deal with Iran might provide opportunities for Tehran.