Mubasher: European banks and companies that take part in a special European Union (EU) initiative to maintain trade with Iran would be at risk from the re-instated US sanctions, the US special envoy for Iran warned.

It does not come as a “surprise” that the EU push for establishing what is known as Special Purpose Vehicle (SPV) for non-dollar trade with Iran was floundering over worries that it would bring about US punishment, Special Representative Brian Hook told reporters.

“Any major European company will always choose the American market over the Iranian market,” Hook said.

Hook criticised the EU’s push to circumvent US sanctions, warning that this conveyed “the wrong signal, at the wrong time.”

 “We have looked at [sanctions waivers granted for eight of Iran’s largest buyers] on a case by case basis, taking into account the unique needs of friends and partners, and also ensuring that as we impose sanctions on Iran’s oil sector that we do not lift the price of oil,” Hook said.

The SPV represented the linchpin of EU efforts to save the 2015 nuclear accord with Iran. President Donald Trump pulled the US out of the agreement last May.

Iran warned that it could cancel the deal, under which it agreed to limit its nuclear programme in return for sanctions relief, if the EU could not preserve the accord’s economic benefits.

The SPV could serve as a clearing house that could help match Iranian oil and gas shipments against purchases of EU goods, circumventing US sanctions based on global use of the US dollar for oil sales.

Although Brussels looked to have the SPV established by this month, no state offered to host it, six diplomats told Thomson Reuters.