News ID: 220255
Published: 0412 GMT August 23, 2018

EU allocates 18 million euros to help offset US sanctions impact

EU allocates 18 million euros to help offset US sanctions impact

Economic Desk

Italy's banks to work with Iran to bypass US sanctions

India seeks to continue importing Iran oil

The European Union agreed 18 million euros ($20.6 mln) in aid for Iran on Thursday, including for the private sector, to help offset the impact of US sanctions imposed after its withdrawal from the nuclear 2015 deal. 

EU foreign policy chief Federica Mogherini said in a statement the bloc was committed to cooperation with Iran.

“This new package will widen economic and sectoral relations in areas that are of direct benefit to our citizens,” she said.

The announcement is of a wider package of 50 million euros earmarked for Iran in the EU budget and the bloc’s high-profile efforts to support the nuclear accord that US President Donald Trump abandoned in May.

The bloc will spend 8 million euros on the Islamic Republic’s private sector, including assistance for small and medium-sized enterprises and Iran’s Trade Promotion Organization.

A further 8 million euros will go to environmental projects and 2 million euros to fighting harm caused by drugs.

The EU is working to maintain trade with Iran, which has threatened to stop complying with the nuclear agreement if it fails to see the economic benefits of relief from sanctions.

Thursday's move is the latest in a series of measures taken by the EU to meet Iran's demand for Europe's "practical strides" in support of the deal.

On August 6 – the same day the first batch of US bans snapped back in place against Iran – the EU activated an updated version of its Blocking Statute, which prohibits European companies from complying with US sanctions on Iran.

The sanctions targeted financial transactions that involve dollars, Iran's automotive sector, the purchase of commercial planes and metals including gold. The second batch of US sanctions targeting Iran's oil sector and central bank are to be reimposed in early November. Trump has warned that those who do not wind down their economic ties with Iran would "risk severe consequences."

The EU, however, has warned that it could impose its own sanctions against the companies that stop doing business with Iran in compliance with US bans.

The European Union has been planning to open bank accounts for Iran to facilitate direct transactions with the country and non-reliance on the American financial system.

Earlier this week, Germany said the European countries need to adopt payment systems independent of the US if they seek to keep the nuclear deal in place.

 

Italy-Iran banking cooperation

An Iranian official said Italy has allowed a number of its banks to work with Iran using euro instead of US dollar to skirt sanctions from the United States.

Ahmad Pourfallah, the chairman of Iran-Italy Joint Chamber of Commerce, said that Italian banking authorities decided to reengage the second and third-class banks by giving permission for them to cooperate with Iran on the basis of euro.

Instead of cooperating with big European companies that use dollars and are afraid of the US sanctions over cooperation with Tehran, Iran is better to work with Italy's small and medium-sized businesses that use euros for their banking transactions, Pourfallah said.

 

India wants Iran oil

Meanwhile, with India seeking ways to maintain its bilateral ties with Iran in the face of US sanctions, a London-based international law firm said that Iran's major energy consumers like India and China have indicated they intend to find a way to go around the US sanctions and keep the Iran oil lines open.

According to official sources, India is discussing with European Union (EU) members to find a way out, apart from trying to convince the US that its economic sanctions on Iran will have negative implications for the Indian economy.

"As the US continues to mount pressure on its allies to prescribe unilateral sanctions on Iran, Iran's major energy customers, including China and India, have indicated their defiance to the US's request," law firm Zaiwalla and Company Managing Partner said in a statement.

"India currently has a competitive agreement with Iran for oil supplies – the shipping costs from the Persian Gulf are minimal in comparison to the US, and Iran also offers a longer credit repayment period."

Iran has become the third-largest oil supplier for India, which imports more than 80 per cent of its energy needs.

"Therefore, these cost differences are lucrative in the long run," Reddy said.

"With countries including China and India unwilling to completely cut Iranian oil imports, and with the EU also refusing to endorse the withdrawal from Iran nuclear deal, the US finds itself in a compromising position to negotiate with Iran's customers to reduce oil imports," the statement added.

India is likely to take up the issue with US Secretary of State Mike Pompeo and Defence Secretary James Mattis when they come to New Delhi next month on official visits.

Reuters, Tasnim, Xinhua, Press TV and IANS contributed to this story.

   
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