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Will EU’s ‘SPV’ be able to sustain Iran trade, investment?

While a welcomed step, the SPV mechanism that Iran and the EU are working on is only the starting point of a process that needs to be further consolidated in order to enable trade and investment between the two sides.
European Union High Representative for Foreign Affairs and Security Policy Federica Mogherini talks to the media as she arrives for the informal meeting of European Union leaders ahead of the EU summit, in Salzburg, Austria, September 19, 2018. REUTERS/Lisi Niesner - RC1BCA4F9070

On the sidelines of the UN General Assembly in New York, European Union foreign policy chief Federica Mogherini announced that the European bloc would create a "special purpose vehicle" (SPV) to sustain Iran-EU trade despite the reimposition of US secondary sanctions. While details are being worked out, the SPV will act as a new payment mechanism between the two sides and will probably mainly rely on a bartering system with a minimum flow of funds. According to Mogherini, the SPV will aim to "assist and reassure economic operators pursuing legitimate business with Iran."

But what is the feasibility of this plan, and what does it mean for Iranian and European companies?

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