How France, Germany and UK Bypass US Sanctions on Iran

By Nawal Sayed

CAIRO, Feb. 3 (SEE) – Three European

countries have established a new system so their companies can continue trading

with Iran without incurring U.S. sanctions.

The barter-type system set up by France,

Germany and Britain is designed to allow businesses to skirt direct financial

transactions with Iran and thereby evade possible U.S. sanctions, setting up a

potential collision with President Donald Trump's hard-line policies on Tehran,

media reports said on Thursday.

Once the process is up and running, a

financial institution, known as an "Instrument in Support of Trade

Exchanges" or INSTEX, would run a payment channel, brokering Iranian

imports in and European exports out, while insulating the companies involved,

according to a statement posted on the official website of the French foreign

ministry.

The statement was accompanied by a video

illustrating how the INSTEX mechanism works.

In a joint statement, the foreign ministers

of Germany, Britain and France sought to allay Washington's possible fears.

"INSTEX will function under the

highest international standards with regards to anti-money laundering,

combating the financing of terrorism and EU and U.N. sanctions

compliance," their statement said.

The three nations have been working on the

plan for months. It follows Trump's decision last year to unilaterally withdraw

from the international accord aimed at preventing Tehran from developing

nuclear weapons in exchange for economic incentives. His administration also

introduced new sanctions on Iran.

U.S. President Donald Trump holds up a proclamation declaring his intention to withdraw from the JCPOA Iran nuclear agreement after signing it in the Diplomatic Room at the White House in Washington, U.S. May 8, 2018. REUTERS/Jonathan Ernst

The other parties to the 2015 agreement —

France, Britain, Germany, Russia and China — have been scrambling to keep the

deal alive.

In recent months, Iranian officials

threatened to resume enriching uranium to higher purities than allowed under

the deal, putting pressure on the Europeans to find a way around the sanctions.

The European Union's foreign policy chief,

Federica Mogherini, who helped negotiate the 2015 accord with Tehran, said the

new system would be "essential for the continued full implementation of

the nuclear deal with Iran."

INSTEX is to be headquartered in Paris and

overseen by a German banker.

The three foreign ministers said a parallel

structure would have to be set up in Iran and other work needs to be done to

"address all the technical and legal aspects required to make this vehicle

operational."