Sanctions

Europe, Russia and China join forces with a new mechanism to dodge Iran sanctions

In the latest sign of the growing divide between Washington and its allies, the European Union's foreign policy chief announced Monday that the bloc was creating a new payment mechanism to allow countries to transact with Iran while avoiding U.S. sanctions.

Called the "special purpose vehicle" (SPV), this mechanism would aim to "assist and reassure economic operators pursuing legitimate business with Iran," according to a joint statement released by the remaining members of the Iran nuclear deal — France, Britain, Germany, Russia and China.

"This will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world," Federica Mogherini, the EU's high representative for foreign affairs, told the UN General Assembly on Tuesday.