Debates Surrounding the Special European Mechanism for Trade with Iran

As the 'symbolic implementation' of the European Union's special mechanism for trade with Iran approaches, two sources within the EU told Radio Free Europe/Radio Liberty that the mechanism still lacks a 'clear management structure' and there is 'no consensus' among EU members regarding it. Reuters reported on Wednesday, citing Western diplomats, that the new EU mechanism, aimed at helping Iran receive payment for its exports, will 'symbolically' begin on November 4, corresponding to Aban 13. This date marks the deadline set by the United States for foreign companies to align themselves with the second phase of U.S. sanctions against Iran, which will reimpose sanctions targeting Iran's oil industry and aim to reduce its exports to zero. Now, on the verge of the 'symbolic implementation' of the European special mechanism, an EU source told Radio Free Europe/Radio Liberty that although European countries have made closed efforts to establish a special mechanism to facilitate payments related to Iran, 'neither a host for establishing this office has been found nor has its legal and managerial structure been defined yet.' Another EU source mentioned that this issue has not been raised in any of the working sessions of the European Council. This European source noted that the 'special mechanism' is not a common mechanism in the EU and added that, in their view, the 'European External Action Service' is convinced that no consensus will be reached among the 28 countries on this matter and that a different solution must be sought. The implementation of the so-called special mechanism to maintain economic relations with Iran was announced a month ago following a meeting related to the JCPOA in New York by Federica Mogherini, the head of the EU's External Action Service, and Mohammad Javad Zarif, Iran's Foreign Minister, and speculation about this special mechanism has been ongoing since then. Washington also reacted at that time to such a decision by its former partners in the nuclear deal with Iran, calling it a wrong message at the wrong time to Iran. The United States is determined to implement a comprehensive maximum economic pressure campaign on Tehran. Tehran has warned the remaining countries in the JCPOA, especially the European parties, that they will either benefit from the advantages of remaining in the agreement or leave it. Therefore, the EU is continuously trying to find a way to keep Iran in the JCPOA. According to an unnamed European source who spoke with Radio Free Europe/Radio Liberty, the EU's special mechanism to facilitate payments related to oil exports and imports from Iran has 'followed a closed process and has been mainly driven by large countries that have economic relations with Iran, such as Germany, Italy, and France.' This special mechanism is expected to be utilized from Aban 14, when the biting oil and banking sanctions of the U.S. come into effect. However, it seems that the path ahead for the EU, which consists of 28 countries, is not simple. A financial office or some form of a bank must be established for this mechanism to carry out financial transactions, and like any such entity, its legal regime and management must be organized precisely. An EU source who discussed this with Radio Free Europe/Radio Liberty described organizing these matters as obstacles in the way of the EU's progress. This issue is likely why some Western diplomats describe the start of this mechanism on Aban 13 as 'symbolic.' These diplomats told Reuters that the EU's special mechanism will not take on a practical form until early next year. Meanwhile, observers in this field believe that even if this special mechanism is fully implemented, the extent of Iran's benefit from it, especially considering the breadth of U.S. sanctions, remains uncertain.