Pompeo, making his first visit to Germany as secretary of state, said the US does not take issue with the development of the system known as INSTEX, so long as it deals with the trade of goods not subject to sanctions, as the Europeans contend it will, AP reported.
"We've been pretty clear about trade with Iran — there are items that are sanctioned and there are items that are not," Pompeo told reporters after meeting with German Foreign Minister Heiko Maas at a government villa in suburban Berlin.
"When we think about INSTEX, if it's aimed at facilitating the movement of goods that are authorized to move, it's unproblematic," he said.
Since withdrawing unilaterally from the landmark 2015 deal with Iran that offered economic incentives in exchange for curbs on its nuclear program, the US has been at odds with the other nations involved that have been trying to keep the deal alive — Germany, France, Britain, Russia and China.
As the US has increased sanctions and companies have been pulling business out of Iran, the Europeans have been developing INSTEX, a complicated barter-type system to skirt direct financial transactions with Iran and so evade possible US sanctions.
The system is not yet up and running, but they hope to have it functioning by this summer.
Maas emphasized that even though the US was no longer party to the Iran agreement, known as the Joint Comprehensive Plan of Action, or JCPOA, its goal was the same.
"We both agree that Iran must be prevented from obtaining nuclear weapons," Maas said. "It's no secret that we differ on how to achieve that."
Iran has always maintained that its nuclear program has not military dimensions and is only for civilian purposes including electivity generation.