Germany, France, and Britain have launched a mechanism to allow financial flows to be sent to Iran that would not violate U.S. sanctions in an attempt to keep alive the landmark 2015 nuclear deal.
The so-called special-purpose vehicle (known as INSTEX) will help European firms with legitimate business interests to use barter techniques to conduct business in Iran.
The plan, which had long been in the development stages, focuses on areas not targeted by U.S. sanctions and will in the beginning focus "on the sectors most essential to the Iranian population -- such as pharmaceutical, medical devices and agrifood goods" foreign ministers from the three countries said on January 31.
Germany, France, and Britain -- which signed the nuclear deal along with the United States, Russia, and China -- have been working hard to keep the accord alive after U.S. President Donald Trump announced in May he would withdraw from the deal and reimpose sanctions on Tehran.
The EU is backing INSTEX, which stands for the Instrument In Support of Trade Exchanges, but it is not directly involved, officials said.
The measures involved are designed to protect European firms from U.S. court action and allow them to recover any financial damages related to the sanctions.
"It is a political act," French Foreign Minister Jean-Yves Le Drian told reporters after a meeting of his European Union counterparts in Bucharest. "It is a gesture to protect European companies."
After negotiations with Iran, the three countries had planned to put INSTEX in place in November, but they struggled to find ways to minimize the risk of the U.S. sanctions for firms involved.
'A Big Step'
The goal is to ensure that the economic benefits provided to Iran under the 2015 deal remain sufficient for Tehran to keep abiding by the curbs placed on its nuclear program.
"Registration is a big step, but there is still more work to be done," British Foreign Secretary Jeremy Hunt said.
INSTEX has starting capital of 3,000 euros (3,447 dollars) and will be headquartered at the French Finance Ministry and headed by Per Fischer, a former manager at Germany's Commerzbank.
The company's formal objectives are to "support legitimate trade with Iran," according to the entry in Petites Affiches, a French journal for official corporate announcements.
The U.S. Embassy in Berlin said on January 31 that the United States did not expect the mechanism to affect its effort to apply maximum economic pressure on Tehran.
"Entities that continue to engage in sanctionable activity involving Iran risk severe consequences that could include losing access to the U.S. financial system and the ability to do business with the United States or U.S. companies," a spokesman for the mission said.
According to the UN nuclear watchdog, the International Atomic Energy Agency (IAEA), Tehran has so far abided by the terms of the deal in regard to nuclear development despite the U.S. withdrawal.
However, it has continued to test its ballistic missiles, which Washington and many in Europe say could eventually be fitted with nuclear weapons. Tehran insists the program is purely defensive.
Still, Europe is maintaining a tough line on Iran regarding the ballistic-missile program.
"It's essential we show our American colleagues that we are going in the same direction as them on a series of issues such as ballistic missiles and Iran's regional activities," Belgian Foreign Minister Didier Reynders said as he arrived for the EU meeting in Bucharest.
On January 25, France said it was ready to impose new sanctions on Tehran if talks on its missile program make no progress.