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Russia, China, EU to agree special payments system for Iran

Russia, China, EU to agree special payments system for Iran

While Russia, China and EU agree on special payments system for Iran, the Russian diplomats suggest the new mechanism is not a perfect one and can trample down by the United States.

The White House will hit Iran with a second batch of measures — targeting its oil exports and payments from its central bank — next month. In a joint statement on Tuesday, the foreign ministers of China, Russia, Germany, the UK and France agreed to “assist and reassure economic operators pursuing legitimate business with Iran” including its oil exports. The five countries remain signatories to a 2015 Iran nuclear deal which Donald Trump withdrew from earlier this year after calling it the “worst deal ever”.

The EU’s three biggest member states have agreed a deal with Russia and China to set up a special payments system to facilitate trade with Iran as global powers step up measures to protect a nuclear deal with Tehran after the US reimposed sanctions. The co-ordinated move is the latest step by the five powers to protect the foundering nuclear deal by circumventing US sanctions.

Federica Mogherini, the EU’s top diplomat, said the financial tool — known as a “special purpose vehicle” — would allow for legitimate financial transfers between European and Iranian companies. She added technical teams from EU governments would work on how the tool would work in the coming weeks.

The SPV would “allow European companies to trade with Iran in accordance with EU law and could be open to other partners in the world”, Ms Mogherini told the UN general assembly on Tuesday.

Moscow heralded the agreement but warned that Washington would seek to “trample” on the initiative.

“Everything that Ms Mogherini has said is extremely positive,”

Vladimir Yermakov, head of the department for non-proliferation and arms control at the Russian foreign ministry, told the press.

The Russian diplomat added that a question is whether SPV will work because of the US’ colossal pressure on the European Union. Thus, Washington can easily trample down any mechanism, said Mr Yermakov.

“Everything depends on how far the Americans want to go and how far our European colleagues will allow them to go,”

he added.