Switzerland is close to launching an initiative to let companies sell food, medicine and medical devices to Iran using a payments channel that would be the first such mechanism to win Washington’s approval since it reimposed sanctions against Tehran.

Bern’s humanitarian supplies plan, which is the subject of delicate ongoing talks with the US and Iran, comes as leading EU powers hope within weeks to set up a much-touted mechanism to finance broader trade with Tehran.

The simultaneous efforts highlight the transatlantic schism since President Donald Trump pulled out of a landmark international nuclear deal with Iran in May.

While Switzerland’s work is consistent with Washington’s insistence that it will continue to allow humanitarian trade with Tehran, US officials have denounced the EU for its efforts to defy reimposed US sanctions on industries ranging from oil to finance.

The Swiss economic affairs department told the Financial Times it was “striving” to set up the humanitarian payments channel “as soon as possible” but could not give a start date. “Discussions are still ongoing with US authorities, Iran and Swiss companies,” it said.

Switzerland, which is not an EU member and has a large pharmaceuticals sector and a tradition of neutral diplomacy, has strong credentials to be a base for the mechanism.

Roche, the Swiss pharmaceuticals company, said it was aware of “discussions on a potential alternative financing channel for humanitarian purposes” but could not comment further. “To our knowledge no concrete proposals have been made,” it said.

The US state department signalled that it was comfortable with the Swiss channel: “We understand the importance of this activity since it helps the Iranian people. It has never been, nor is it now, US policy to target this trade.”

It added: “The United States maintains broad authorisations that allow for the sale of agricultural commodities, food, medicine, and medical devices by US persons or from the United States to Iran.

“In addition, US sanctions laws provide similar exemptions for sales of food, agricultural commodities, medicine, and medical devices by non-US persons to non-designated persons in Iran.”

Brian Hook, US special representative for Iran, warned last month that Tehran would have to “create a financial sector that is open and transparent” to facilitate the humanitarian imports and ensure they were not diverted to “regime elites”.

The Iranian rial has depreciated by about 50 per cent this year, pushing up prices of food and medicine. Central bank figures show a 60 per cent year-on-year rise in food prices in November.

While Iran’s government says there is no severe shortage of pharmaceuticals, people complain that treatments for acute conditions such as cancer have soared as much as threefold — if they can be found at all.

The EU hopes its payments channel for non-dollar denominated Iran trade could be in place as soon as the end of this month, Federica Mogherini, the bloc’s foreign policy chief, said last week.

The initiative — led by France, Germany and the UK — has struggled to make headway because of technical and political problems, notably a reluctance by countries to host it because of a possible US backlash.

EU diplomats say it is likely France and Germany will shoulder the biggest burden, including hosting the channel. US officials have alternated between condemning the effort and dismissing it as a paper tiger, as international companies with American links are likely to shun it due to worries it could open them up to US sanctions.

Additional reporting by Aime Williams in Washington.

Copyright The Financial Times Limited . All rights reserved. Please don't copy articles from FT.com and redistribute by email or post to the web.