BERLIN (Dispatches) - Germany and its European partners are considering setting up a payment system with Iran that allows the continuation of business transactions with the Islamic Republic once U.S. sanctions kick in, an economy ministry spokeswoman said on Friday.
"As you know, it is a central goal of the EU and the German government to ensure that the processing of transactions is secured,” the spokeswoman said during a regular government news conference. "All options are being considered.”
The U.S. wants to force Europe to break business links with Iran. Along with other European partners, but the German government and other European states are determined to push back against American pressure.
Donald Trump’s administration isn’t even close to being done with Iran. In November, the second phase of American sanctions kicks in, directly targeting the country’s oil and gas industry.
So Berlin and other European capitals are scrambling for ways to mitigate the worst effects of Washington’s crackdown on Tehran.
The plan under review in Berlin and Brussels would involve establishing a kind of clearing house for all European trade with Iran. A form of commercial entity known as a "special purpose vehicle” would be established, with European governments as shareholders.
The new company would act as an intermediary for cross-border payments to and from Iran, with no involvement from European commercial or central banks, which are frightened of becoming the target of American counter-measures.
The clearinghouse is likely to be based in Luxemburg, but its capitalization remains unclear. The European Investment Bank and national development banks, like Germany’s KfW, may be involved, although here too there is genuine fear of American retribution.
A determined effort to get around U.S. sanctions would also encourage European businesses to stay the course in Iran. Although many international companies have pulled out of Iran, smaller German firms have significant investments in the country.
India, China and Turkey have pledged to maintain economic relations with Iran. European imports of oil from Iran have already fallen, not least because European-based oil tankers are no longer transporting Iranian oil.