Later today, France, Germany, and the U.K. are finally expected to unveil the “special purpose vehicle” (SPV) they have created to get around the Trump administration’s Iran sanctions:
Three key European Union nations are set to make good on a pledge to help their companies trade with Iran despite U.S. sanctions, a move that could help to salvage a nuclear deal with the Islamic Republic but may have more political symbolism than economic impact.
The announcement of the so-called special purpose vehicle could come as soon as Monday, two diplomats familiar with the matter said, asking not to be identified as last-minute negotiations on the wording of the EU statement continued. The mechanism is key to the EU’s effort to keep Iran from quitting the 2015 accord to constrain its nuclear activities in exchange for sanctions relief. The U.S. pulled out of the deal in May and has since reimposed sanctions.
A draft EU statement seen by Bloomberg welcomes the initiative by U.K, France and Germany as providing “a positive impact on trade and economic relations with Iran, but most importantly on the lives of Iranian people.” The statement is going to be discussed by EU government envoys in Brussels on Monday morning and may be released soon after, if all 28 member states approve.
The creation of the European SPV is the most significant measure that our allies have taken to shore up the JCPOA following Trump’s decision last year to renege on the agreement. It has been several months since the sanctions-evading mechanism was first presented, and at times it seemed that it would never materialize. In the end, European support for the nuclear deal and their desire to be able to set their own foreign policy course free of U.S. interference were both strong enough to convince our allies to ignore the administration’s threats. If the EU also issues a statement in support of the “special purpose vehicle,” it will send a strong message of European unity on this issue and it will represent a total rejection of the Trump administration’s efforts to pit our allies against one another. The announcement of the SPV will also deliver a much-needed signal of reassurance to Iran’s government that European claims of support for the nuclear deal are not just so much hot air. Our allies could have folded under U.S. pressure months ago or abandoned their plan when it ran into difficulties, but they persevered and made clear that they won’t allow the U.S. to dictate their policies to them on such an important issue.
The article describes the European action as “defying Trump,” and that’s true, but the more important thing here is that this action shows that European governments are prepared to back up their commitments under the JCPOA and won’t be bullied into giving up on a major nonproliferation agreement. The current administration won’t appreciate it, but our allies are doing the U.S. a tremendous favor by fighting to keep the nuclear deal alive. The current U.S.-European rift over Iran continues to grow, but the only reason that the rift exists is an irrational decision by this president that the next administration can reverse. The “special purpose vehicle” isn’t a panacea, and U.S. sanctions are still going to hurt the Iranian people severely, but the nuclear deal has a better chance of surviving now than it did six months ago.