U.S. Ambassador to the European Union Gordon Sondland has warned companies not to use the trade mechanism Europe has set up to facilitate limited trade with Iran, according to Bloomberg.
“Anyone actually using it to trade on anything other than humanitarian activity is going to be sanctioned by the United States,” Sondland said in a Feb. 7 interview. “We’ll find them and sanction them and they won’t be doing any business with the United States.”
When the United States withdrew from the Iran nuclear deal last May, Europe disagreed with the decision and pledged to do its best to entice Iran economically to stay in the agreement. After months of delays finally France, Germany and United Kingdom announced the trade mechanism called INSTEX - Instrument In Support Of Trade Exchanges on January 31.
Iran has cautiously welcomed the move but has reminded Europe that this is good only as a first step, as trade will be limited. However, it is mainly up to companies to decide if they want to do business with Iran and larger corporation will be reluctant if they have business interests in the U.S.
U.S. sanctions only allow humanitarian trade with Iran, such as selling the country food and medicines.
Sondland dismissed INSTEX saying, it “will sit there and will be little used,” adding that it’s a “fig leaf” the European Union offered to the Islamic Republic.