The European Union is creating an alternative system to continue economic cooperation with Iran beyond the US sanctions

The European Union announced the creation of a swap system to continue their trade with Iran and escape US sanctions in a decision to strike Washington on the eve of President Donald Trump’s speech at the UN General Assembly aimed at mobilizing against Iran.

The initiative is aimed at rescuing Iran’s nuclear deal, which took place in 2015 despite the US withdrawal from the text in May.

“In practice, the EU member states will establish a legal entity to facilitate legitimate financial transactions with Iran”, said EU Foreign Minister Federica Mogherini.

“This system will allow European companies to continue to trade with Iran in accordance with European law, and other partners in the world could join it”, she said.

Representatives of the six signatories to the nuclear deal – France, Britain, China, Russia, Germany and Iran – attended the meeting in New York on the sidelines of the UN General Assembly.

European sources said the so-called “target mechanism” (SPB) would act as a stock exchange or a sophisticated swap system based on the sale of Iranian oil, the country’s first source of imports.

If Iran sells oil to Spain and Germany sells equipment to Tehran, the proceeds from the shipment are used to pay the amount owed to the German company.

“There will be a clearing house that will verify that the value of exported and imported goods by Iran are compensated”, a French diplomatic source said.

This mechanism has “stifled” buyers and sellers by avoiding dollar deals that could open the door to US sanctions.

“Oil is the only one that Iran can provide”, the source said.

“The mechanism allows the use of oil revenues to import goods”.

The nuclear deal, signed in 2015, aims to prevent Iran from acquiring an atomic weapon and at the same time removing it from its economic isolation by lifting sanctions that stifle it.

But when he came out of the deal, Trump re-imposed tough sanctions targeting companies and foreign countries that continue to trade with Tehran.

Under the threat of sanctions, large groups (French Total, Germany Daimler) have had extensive activities in the United States, all activities in Iran for fear of retaliation by the United States.

A fourth batch of sanctions will come into force on November 4 and will directly involve Iranian oil exports and banking operations with the country, which will be de facto terminated by the international financial community.

Federica Mogherini told reporters that the new payment channels are supposed to reassure “economic actors”.

The aim is to protect the economic gains that Iran expects in return for remaining in the agreement and abandoning a military nuclear program, she said.

Iranian President Hassan Rouhani told the NBC television network on Monday that his country had chosen to remain in the nuclear deal.

Iran has the world’s fourth proven oil reserves, while a number of countries, particularly in Asia, need Iranian crude, especially as its refineries are specifically designed to treat this type of oil, and not others.

The Europeans are determined to salvage the nuclear deal to avoid a resumption of the Iranian program, which could once again unleash the race for atomic weapons in the region.

They are wary of any weakness for President Rouhani, who is fiercely defending the nuclear deal, but has yet to reap the economic gains he has relied on to counter the more radical currents in the regime.

“Protecting the agreement is in the interest of the international community”, Mogherini said.

Ali Akbar Velayati, advisor to the Iranian leader on international relations, said his country would go beyond US economic sanctions on Iran by working with China, Russia and Turkey.

“We are at the beginning of the problems, but we will overcome them by working with China, Russia, Turkey and other friendly countries”, Velayati was quoted as saying by the ISNA news agency on Tuesday.

He pointed out that it is not possible to prevent US pressure to export Iranian oil, stressing that his country does not conduct any negotiations with the United States.

On May 8, US President Donald Trump announced a withdrawal from an agreement restricting Iran’s nuclear program for peaceful uses.

Trump decided to reinstate economic sanctions on Tehran and the companies and entities it deals with.

The second package of US sanctions on Tehran, which will restrict the country’s oil industry, is expected to begin on November 6 after a package of first economic sanctions imposed in August.