France and Germany will likely host the Special Vehicle Purpose (SPV), a special payment channel created by Europe as part of its efforts to keep trade flowing with Iran in defiance of US sanctions, senior diplomats told the Wall Street Journal.
The report said the governments participating in the payment channel will directly manage the mechanism in order to prevent the US from putting direct sanctions on it.
According to the diplomats, British officials are also mulling over joining France and Germany in order to rescue the European attempt to circumvent the US sanctions and salvage the Iran nuclear deal following the US withdrawal in May.
The report said if France plays host to the SPV, Germany will take the helm, and vice versa.
According to the report, the mechanism is not finalized yet and finishing touches will be discussed on the sidelines of the 2018 G20 Buenos Aires summit, scheduled to begin on November 30.
Austria a Luxembourg Shy
The move comes after Luxembourg and Austria, under US pressure, refused to host the SPV, with Luxembourg officials being warned that hosting the mechanism could damage the country’s place as a major financial center hosting many international investment funds, European diplomats said.
The report was released during the visit of Iran’s nuclear chief Ali Akbar Salehi to Brussels, Belgium, where he attended the third seminar on peaceful nuclear cooperation between Tehran and the European Union.
The European Union hosted the AEOI chief at the seminar aimed at showing the bloc's continuing support for the Joint Comprehensive Plan of Action.
EU diplomats had told Reuters on Monday they could only do so much to urge firms to brave the risk of US penalties and do business with Iran.
“What we are doing now is a lot of symbolism,” said one EU diplomat involved in talks with Iran.
This is a hugely complex and unique undertaking, technical work has been advancing,” Europe’s Climate and Energy Commissioner Miguel Arias Canete said at a joint briefing with Salehi.
“Nobody should have any doubt on the level of political ambition and determination by the member states involved, in particular France, Germany and the United Kingdom to swiftly operationalize the SPV,” he added.
Governor of the Central bank of Iran Abdolnasser Hemmati told ILNA news agency on Tuesday that his bank is studying the SPV mechanism and will announce its views.
Iran and the Europeans have been discussing ways to conduct non-dollar trade in order to offset the US restrictions.
On September 24, Iran and its five partners released a joint statement announcing the setting up of the SPV.