France and Germany create payments channel to circumvent Iran sanctions?

France and Germany create payments channel to circumvent Iran sanctions?

France and Germany have joined forces to rescue a European effort to create a payments channel to keep trade flowing with Iran, defying U.S. attempts to take the air out of the plan,  the Wall Street Journal reported with reference to senior diplomats.

France or Germany will host the corporation that would handle the payments channel. The payments channel, known as a special purpose vehicle (SPV) would use a system of credits to facilitate compensation for goods traded between Iran and Europe, allowing some trade to proceed without the need for European commercial banks to make or receive payments to Iran.

The goal of these steps is to help European companies continue some business activity with Iran despite sweeping new U.S. sanctions on the country and any company that does business with it.

U.S. Ambassador to Germany Richard Grenell said that European efforts to work around the sanctions would not be smart. "The U.S. will consider sanctions on those entities participating in these tactics," he said.

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