The United States says a newly created, Swiss-based humanitarian trade channel has become fully functional to allow companies to send food, medicine, and other critical goods to Iran without violating U.S. sanctions.

Treasury Secretary Steven Mnuchin on February 27 said in a statement that “the Swiss Humanitarian Trade Arrangement (SHTA) will help ensure that humanitarian goods continue to reach the Iranian people without diversion by the regime."

The first SHTA trades were conducted as a test in late January. Mnuchin said that a license has now been granted for trade activity, meaning the system is fully operational.

The system ensures no revenue or payment is transferred to Iran, which Washington accuses of misusing such channels for corruption and the promotion of terrorism -- allegations Tehran denies.

The humanitarian channel was announced on October 25 and restricts the Central Bank of Iran's (CBI) role in facilitating humanitarian trade because the "CBI and its senior officials have facilitated significant funds transfers to terrorist organizations," according to the Treasury Department.



The SHTA mechanism allows items that are exempt from existing Iranian sanctions to be exported, including agricultural commodities, food, medicine, and medical devices.

U.S. sanctions were reimposed after President Donald Trump in May 2018 unilaterally withdrew from a 2015 international deal over Iran's nuclear program.

Iran has faced severe shortages goods since them, leading to street protests and violent unrest.

Medical and other humanitarian goods were exempted from the sanctions, but many foreign banks avoided any dealings with Tehran amid fears they would find themselves subject to the punitive measures.



Brian Hook, the U.S. special representative for Iran, last week reported strong interest from food and drug companies in using the system.

Switzerland, which is politically neutral, has been working with U.S. and Iranian authorities and has designated Swiss banks and Swiss companies to operate within the plan.

The Swiss Economic Ministry confirmed in a statement on February 27 that the “payment mechanism to enable humanitarian goods to be delivered to Iran, came into effect.”

With reporting by Reuters, AP, AFP, and dpa