The European Union said on Monday, September 24, it would set up a legal entity to preserve oil and other business with Iran, in a bid to evade US sanctions after President Donald Trump withdrew from a nuclear agreement.
They were determined to “protect the freedom of their economic operators to pursue legitimate business with Iran”, said the European Union and Iran, along with Russia and China, in a statement issued after high-level talks at the United Nations.
With the United States and the dollar dominating so much of global trade, the statement said the new mechanism would “facilitate payments related to Iran’s exports (including oil) and imports, which will assist and reassure economic operators pursuing legitimate business with Iran”.
European Union foreign policy chief Federica Mogherini, speaking at the United Nations alongside Iranian Foreign Minister Mohammad Javad Zarif, said the countries were still working out the technical details.
She told reporters, “In practical terms, this will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world”.
The agreement was sealed in 2015 in a signature achievement for then US president Barack Obama. Trump pulled out of the agreement in May, describing it as a “disaster” and quickly moving to reimpose sanctions on Iran.
Despite the protests of the European Union, a number of business including French energy giant Total and car-makers Peugeot and Renault as well as Germany’s Siemens and Daimler have already suspended operations in Iran for fear of triggering US sanctions.
The European Union move comes a day before Trump and Iranian President Hassan Rouhani separately address the UN General Assembly, with the US leader expected to take a hard line on Iran.