Cuba closely following EU-Iran barter mechanism project

To circumvent new U.S. sanctions, the EU and Iran are discussing creation of a clearinghouse that would match oil purchases from Iran with European goods and service sales

CUBA STANDARD — A Cuban official said his country is closely following discussions between the European Union and Iran to create a payment mechanism that would help European companies circumvent renewed U.S. sanctions against Iran.

Details about a clearinghouse for payments, tentatively called “Special Purpose Vehice”, are currently being hashed out in talks between Brussels and Tehran. The SPV would allow Iran to keep selling oil to EU entities, and European companies to do business in Iran.

Rodolfo Reyes Rodríguez, Director General for Multilateral Issues and International Law of the Cuban Foreign Ministry, said during a visit to Brussels that Cuba was watching with interest the progress of discussions over the SPV.

“There was a mention of this instrument, and we of course also raised the interest that we would have in any solution of this kind that would allow European companies to become increasingly involved in foreign investment and bilateral trade with Cuba,” Reyes told afp.

Reyes Rodríguez led a Cuban delegation during talks with EU officials, aimed at increasing EU-Cuba coordination to counter U.S. sanctions.

EU and Cuban diplomats met in Brussels to discuss U.S. sanctions
EU and Cuban diplomats met in Brussels to discuss U.S. sanctions

Oil and gas sales are handled in US dollars worldwide, but the SPV with Iran would replace the use of dollars in purchasing Iranian oil through barter, by matching Iranian oil and gas exports with purchases of EU goods and services.

To be sure, while an SPV-style clearinghouse could help, it may not amount to much more than a symbolic gesture. Multinational corporations and banks are risk adverse when it comes to a novel and untested payment system, and even more so about directly challenging U.S. policies. Siemens AG, Airbus and other European corporations have already made clear they will not risk access to the U.S. market by engaging with Iran, after the Trump administration restored sanctions against the Middle Eastern nation this month.

Also, the SPV has reportedly made little progress since EU officials announced it in September. Austria declined to host the clearinghouse, apparently due to fear of secondary U.S. sanctions, and Germany and France have not offered themselves; EU leaders are now reportedly asking Luxembourg or Belgium to play host.



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