LONDON (Reuters) - Russian aluminum giant Rusal has activated a contingency plan asking customers to pay in euros instead of dollars to try to skirt round U.S. sanctions, a source close to the matter said.

FILE PHOTO: The logo of Russian aluminium producer Rusal is seen on a board at the St. Petersburg International Economic Forum 2017 (SPIEF 2017) in St. Petersburg, Russia, June 1, 2017. Picture taken June 1, 2017. REUTERS/Sergei Karpukhin

The plan follows the example of Iran, which a few years ago opted to use gold, oil and the Japanese yen to pay for goods that would typically be priced in dollars.

“Rusal has triggered an Iran-like defense plan,” a top executive at one of Rusal’s shareholders said, declining to name the banks that would process the transactions.

Rusal declined to comment.

Last week, the U.S. Treasury imposed sanctions on seven Russian oligarchs and 12 companies they own or control, saying they were profiting from a Russian state engaged in “malign activities” around the world.

This included Oleg Deripaska and his Hong Kong-listed company Rusal, which CRU analysts say accounts for 14 percent of aluminum supplies outside of top producer China.

The sanctions explicitly bar U.S. entities from doing business with the named individuals and companies, making it difficult for them to conduct business in dollars.

“There are a number of banks in Europe that can deal with payment in euros. Some of Rusal’s customers have begun switching payments, but it is taking time,” the top executive said.

Shares in Rusal, the world’s second-biggest aluminum producer, were 1 percent higher in Moscow after losing more than 34 percent of their value in two trading days.

A source with a major U.S. bank which used to deal with Rusal said all payments were currently going to an escrow account, complicating the completion of payments between buyers and sellers.

Financial sanctions imposed on Iran in 2012 to punish the country over its nuclear program played havoc with its ability to import key food items, forcing Tehran to find alternative ways to pay for its needs.

Banks involved in metals are likely to be extremely cautious after French bank BNP Paribas in 2015 paid $8.9 billion to settle claims it violated U.S. sanctions against Sudan, Cuba and Iran.

European banks are technically not banned from processing Iranian oil transactions in euros, but they too have been wary, worried they could be hit with so-called “secondary sanctions” by the United States for aiding a blacklisted entity.

Iran resorted to buying grains using gold and oil as payment and used the Japanese yen to pay for a large volume of wheat.

The London Metal Exchange (LME) said on Tuesday it would temporarily suspend Rusal’s aluminum from its list of approved brands from April 17 after some members raised concerns about settling LME contracts with sanctioned companies.