Europe Must Consider Consequences of SPV Failure

EghtesadOnline: As the main party to blame for the possible failure of efforts to set up a special financial mechanism for trading with Iran, Europe will have to ponder over the implications of its inaction, a senior foreign affairs official said.

News ID: ۷۴۶۴۲۹

07 January 2019

“Iran will hold Europe accountable for not establishing the SPV [Special Purpose Vehicle] … Iran has met all its obligations under the JCPOA [Joint Comprehensive Plan of Action, the formal name of Iran's nuclear deal] so far, but its patience has a limit,” Foreign Ministry Spokesman Bahram Qasemi said on Saturday, IRNA reported.

The European Union has proposed a financial system through which Iran would be able to continue its international trade despite the US restrictions placed on Tehran after US President Donald Trump abandoned the 2015 nuclear deal last May.

The payment channel, known as the Special Purpose Vehicle, is part of Europe’s pledges to compensate for the US sanctions to convince Iranian leaders to stay within the pact, according to Financial Tribune.

In spite of its full commitment to the terms of the nuclear accord, Iran has not yet benefited from Europe’s promised compensatory measures, including SPV.

Decisive Decision

“The time is coming for the EU to make a strategic decision on which path to take [supporting the deal or yielding to US pressure],” Qasemi said.

He said Europe proposed the mechanism in a spirit of goodwill and with a strong political determination, but is gradually appearing incapable of implementing the plan.

“During negotiations over the past months, the feeling that Europe is seriously incapable of activating SPV has become stronger,” he said.

According to Qasemi, the dominance of US dollar and the interconnection between Europe and US economies are main obstacles to the plan.

The spokesman described the three European parties supporting JCPOA as “captives” and “hostages” of the American economy, urging them to move toward independence.

“European countries must pay the price of their independence from the US because this important task will not be cost-free,” he said.

Irrelevant Issue

Qasemi also dismissed claims attributing SPV’s delay to Iran’s hesitation in passing laws for implementing the standards of Financial Action Task Force.

“It’s not right to link SPV to [FATF] bills,” he said.

FATF is an international group that monitors money laundering worldwide. Iran needs to make several legal reforms to bring itself in line with the organization’s guidelines but the process has been prolonged with the relevant bills shuttling between the parliament and Guardians Council, a vetting body that ensures draft laws do not contradict religious laws or Iran’s Constitution.

“The complexity of the issue and the difficulty of a task involving Iran and a number of EU countries with various approaches have slowed down the process,” he said, adding that the US is also hindering the plan with repeated threats against European governments and institutions.