01182019Fri

Iran’s Impatient over Implementation of European Special Purpose Vehicle

Iran’s Impatient over Implementation of European Special Purpose Vehicle

Iran Focus

London, 10 Jan - The EU is committed to ensuring that EU-Iran trade and economic relations continue to benefit from the positive impact of the sanctions lifted JCPOA. The EU has introduced measures to alleviate the effects of US sanctions on European firms, and announced the creation of a new mechanism, a special purpose vehicle (SPV), to facilitate financial transactions with Iran.

However, spokesperson for the Iranian foreign ministry, Bahram Qassemi, complained last week that the SPV has yet not become operational. He said, “For their own independence and the continuation of their own independent existence, the European countries need to make the necessary decision and if there is a price that they have to pay to become independent from the U.S. economy then they have to pay [this price]. There is no doubt that without costs, they won’t be able to do anything of importance and we consider Europe the responsible party for the financial mechanism not becoming operational. Finally, they will be to blame, and they should think about its consequences. Iran’s patience is not unlimited.”

Iranian President Rouhani and his allies want the SPV to become operational, but Supreme Leader Ali Khamenei considers the SPV to be something that will lead to the destruction of Iran’s economic independence.

Mehdi Mohammadi, an analyst allied with Khamenei, said in an interview on Iranian state-run television, “Do you know what the SPV means, at least according to the documents that the Europeans have published? It means that gradually, all money will be cleared from Iran’s economy. All currencies will be cleared [from Iran’s economy]. Gradually, you won’t have any money anymore. Your money will be in blocked accounts and the money will be used for trade and transactions that the other party allows. One of the strategic goals of the U.S. for this new round of sanctions… is that we can’t access our own money and can’t use our financial resources freely where we want.”

It may be that the two factions in Iranian establishment are more concerned about whether to keep the JCPOA. While Rouhani’s faction argues that leaving the JCPOA will be catastrophic, the opposing faction considers the JCPOA itself catastrophic.

Still, an analyst allied with Rouhani says, “Leaving the JCPOA entirely will never serve Iran’s interests, especially now when the regional and international situation is not very good. It will result in an international consensus against Iran. In this regard, it may be that in addition to the EU, US, and some Arabic countries in the Persian Gulf, even China and Russia join Iran’s adversaries.”

The analyst suggests a halfway solution, “To make the European SPV operational and escape this situation, we need to select a halfway measure. It means not to leave the JCPOA completely and not to continue the current political immobility. Because the current situation isn’t in Iran’s favor at all.”

According to Iran’s foreign ministry’s spokesperson, “[The Europeans] should think about [the] consequences [of the SPV not becoming operational]. Iran’s patience is not unlimited.”

Iran has not received substantial support from Europe, China, or Russia, despite its commitment to the JCPOA. This is likely because the EU, Russia, and China understand that their interest in Iranian petrodollars can’t measure up to the billions of dollars that is available to them from trade with the US.

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