EU, China and Russia to Keep Trade Relations with Iran
- Rules & Regulation
The European Union, China and Russia plan to keep their trade relations with Iran despite the recent withdrawal of the United States from the nuclear deal.
Following a ministerial meeting of the E3/EU+2 and the Islamic Republic of Iran, held on September 24, 2018 in New York, signatories of the Joint Comprehensive Plan of Action (JCPOA) agreed to the full and effective implementation of the agreement in all its aspects.
The parties said that they were working on concrete measures to secure payment channels with Iran, and continue Iran’s export of oil and gas condensate, petroleum products and petrochemicals.
To that end, it has been proposed to establish a Special Purpose Vehicle, to facilitate payments related to Iran’s exports, including oil, and imports.
The goal is to keep Iran in the nuclear deal by helping to maintain its economy afloat, through enabling it to keep its renewed trade ties alive.
“The aim of the vehicle is to assist and reassure economic operators pursuing legitimate business with Iran,” a joint statement from the meeting reads.
“The decision to establish it has been taken, also following extensive exchanges we had since the Joint Commission Ministerial Meeting on 6 July. Now another meeting of technical experts from Member States will be convened to take this work forward and operationalise the Special Purpose Vehicle at the technical level,” High Representative/Vice-President Federica Mogherini, said.
In May this year the U.S. Government announced its plans to reimpose sanctions on Iran, in line with the decision of the country’s president Donald Trump to withdraw from the Iran Nuclear Deal.
Iranian companies that are facing the new wave of sanctions following the 180-day wind-down period ending on November 4, 2018 are the Islamic Republic of Iran Shipping Lines (IRISL), South Shipping Line Iran, or their affiliates.
Sanctions will also be imposed on petroleum-related transactions with the National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), and National Iranian Tanker Company (NITC), including the purchase of petroleum, petroleum products, or petrochemical products from Iran, the Treasury Office informed.
Iranian energy and financial sectors are also being targeted by the sanctions.
Companies that trade in U.S. dollars or have operations there cannot afford themselves to lose a share of the U.S. market, hence, they are likely to end their ties to Iran as a consequence.
As a result, shipping giants led by Maersk Line, MSC and CMA CGM started puling out from Iran.
In addition, Greek shipowners, that dominate Iranian exports, are most likely to be affected by the upcoming US sanctions on Iranian ports, shipping and energy sectors.
World Maritime News Staff