Austria Refuses to Host Europe's Special Financial Mechanism for Iran

Austria announced on Tuesday that it will not host the institution that Europe plans to establish for financial communications with Iran during the period of U.S. sanctions. Peter Guslbauer, spokesman for the Austrian Foreign Ministry, stated that they were asked whether Austria was ready to initially host this special mechanism. He added that the Austrian government concluded after serious considerations that it is not in a position to accept hosting this institution at this time. According to this Austrian official, there are many technical issues that remain unanswered; otherwise, Vienna supports the principle of this mechanism. Previously, Bloomberg reported that Luxembourg and Belgium had rejected the proposal to host the special financial mechanism before Austria. "The EU's failure" to establish a special trade mechanism with Iran coincides with the re-imposition of sanctions following the U.S. withdrawal from the nuclear agreement known as the JCPOA on May 8 of this year, when all sanctions that the United States had suspended under this agreement against Iran were reactivated. U.S. officials say the goal of the new sanctions and pressure on the Iranian government is to change its behavior and regional policy, and for this reason, they will seek to reduce Iran's oil exports to zero. Since the U.S. withdrawal from the JCPOA, the remaining countries in this agreement have been trying to somehow preserve it and encourage Iran to fulfill its commitments under the agreement. In this context, the remaining countries in the JCPOA announced about two months ago that they would implement a special financial mechanism known as "SPV" to serve as a channel for continuing financial and banking transactions with Iran. European countries say that by using this mechanism, trading partners with Iran will not need to use the American financial system. It is still unclear when this mechanism will be implemented. The three countries, Britain, France, and Germany, had previously symbolically announced the launch of this program on November 4. In this regard, Abbas Araghchi, Iran's Deputy Foreign Minister, had previously pointed to the dominance of the dollar and the American financial system over European institutions and the complexities of this mechanism as reasons for the delay in launching the European special financial mechanism. Abbas Araghchi stated, "Unfortunately, due to the dominance that the dollar and the American financial system have over European institutions, creating a mechanism that does not deal with this dollar dominance and that Americans cannot place under their sanctions is not easy." He also emphasized that the European parties are working on how to implement this special financial mechanism known as SPV. Meanwhile, Gordon Sondland, the U.S. ambassador to the European Union, stated last month that the European special mechanism for preserving the JCPOA would not be effective as international companies and institutions would not cooperate with it.