January 31, 2019

NIAC Statement on European Financial Channel

For Immediate Release: January 31, 2019
Contact: Mana Mostatabi | [email protected]

WASHINGTON, DC — France, Germany and the United Kingdom launched the long awaited Special Purpose Vehicle (SPV) today to sustain its sanctions relief commitments under the Joint Comprehensive Plan of Action (JCPOA).

Since the U.S. withdrawal from the landmark 2015 nuclear accord, the EU has prioritized efforts to ensure that Iran continues to reap the economic benefits that incentivized it to dismantle its nuclear weapon program. The mechanism, termed Instrument in Support of Trade Exchanges (ISTEX), will use a bartering method to keep the financial flows open between the EU and Iran—while minimizing the risks of EU firms running afoul of U.S. sanctions.

Initially, the mechanism will be used to facilitate the trade of “essential goods,” namely food, medicine, and medical devices. While humanitarian items are not sanctioned by the U.S., EU firms’ fears of running afoul of sanctions has caused a drop-off in Iran, which in turn has severely impacted the lives of everyday Iranians.

Jamal Abdi, President of the National Iranian American Council, a leading voice for the Iranian-American community and expert on U.S.-Iranian relations, issued the following statement in response to today’s launch of the EU’s Special Purpose Vehicle:

“Donald Trump’s efforts to bully our closest allies in Europe into violating a UN-backed deal that the U.S. negotiated has led to today’s announcement of a new, independent financial vehicle to counter U.S. extraterritorial sanctions as many predicted. Rather than continue to isolate itself, the U.S. must restore our diplomatic credibility with our former negotiating partners and Iran by returning to compliance with the JCPOA. Failing this, Europe will be compelled to bolster the vehicle to keep Iran in the nuclear accord to safeguard international security interests – including U.S. interests – and maintain its commitments to the UN Security Council.

“The Trump administration offered the Europeans little recourse, ignoring entreaties both from U.S. allies and Members of Congress to take steps to ensure that sorely needed humanitarian trade can flow to the Iranian people. That a new financial channel was needed to process payments for life-saving medicine and food is an indictment of the complex and counterproductive web of sanctions on Iran that routinely victimizes ordinary Iranians.

“What we are seeing from the Trump administration is an Iran strategy based on prejudice rather than intelligence that can only backfire on U.S. interests. This is not the recipe for a better deal or Iran submitting to U.S. demands, but it is fertile ground for hawks like John Bolton to make the case for military action. Lawmakers in Congress must check the administration’s bankrupt Iran policy before it is too late.”


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