Iran Trade Promotion Plan
Three European Powers U.K., France and Germany are set to announce a plan to help companies trading to Iran to defy the sanctions on Iran.
US sanctions on Iran
US President Trump had unilaterally walked out of the Joint comprehensive plan of action (JCPOA) agreement and reimposed the sanctions on Iran. Under the JCPOA agreement, Iran had agreed to curb its nuclear activities in return for the lifting of sanctions that had been imposed by the UN, US and EU.
This unilateral action of US created a lot of resentment and other parties to agreement China, Russia, U.K., France and Germany reiterated their commitment to the deal. The sanctions would bar the companies with a presence in Iran to use the dollar as a medium of exchange.
Iran trade promotion plan
Iran trade promotion plan has been proposed by the U.K., France and Germany as part of their commitment to save the nuclear deal with Iran.
This plan proposes a special purpose vehicle to accept payments from companies that want to trade with Iran, either by receiving waivers for oil imports or permissible trade in goods like food and medicine. With no direct transfer of funds between Iran and European companies, it would theoretically insulate firms from U.S. penalties.
This plan would shield European companies keen to do business with Iran from U.S. sanctions that could result from dollar-based transactions.