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U.S. Warns European Businesses Against Using Iran-EU Trade Mechanism

German head of The Instrument in Support of Trade Exchanges (INSTEX), Per Fischer (second from right) poses with the envoys of Britain, France and Germany in Iran, March 11, 2019.

The United States on May 8 warned European banks, investors and businesses against engaging with the so-called special purpose vehicle called INSTEX, a Europe-backed system to facilitate non-dollar trade with Iran and circumvent U.S. sanctions.

"If you are a bank, an investor, an insurer or other business in Europe you should know that getting involved in the … Special Purpose Vehicle is a very poor business decision," Tim Morrison, Special Assistant to the President and Senior Director for Weapons of Mass Destruction and Biodefense told a conference.

He has also called Iran's move to scale back some curbs to its program "nothing less than nuclear blackmail of Europe".

U.S. Secretary of State Mike Pompeo, who met with UK’s foreign secretary May 8 said Iran is blackmailing Europe by its recent move concerning JCPOA. Pompeo added Iran’s decision today was a return to weapons grade enrichment. He said Iran’s letter was vague, but the U.S. will wait and see.

Morrison also said the United States is planning to impose further sanctions on Iran 'very soon', a senior White House official said on Wednesday, as Tehran announced it was scaling back some curbs to its nuclear program.

Reporting by Reuters