The EU, China and Russia have backed a mechanism to allow "legitimate" business to continue with Iran, with a plan aimed at sidestepping American sanctions and allowing international trade to continue unimpeded as US President Donald Trump pursues his 'America First' agenda.

The move, announced by EU foreign affairs chief Federica Mogherini in New York, reflects growing calls from the likes of France and Germany for the EU to adopt tools that will allow it to pursue its foreign-policy goals with less recourse to the US. The chief catalyst was the US U-turn on the Iran nuclear deal.

"In practical terms this will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran, and this will allow European companies to continue trade with Iran," Ms Mogherini said after meeting representatives of the other signatories: the UK, France, Germany, Russia, China and Iran. This will be "in accordance with European Union law, and could be opened to other partners in the world", she said.

Mr Trump reimposed the sanctions after quitting the Iran accord in May, and called on US allies to comply. European companies including Daimler and Total have halted activity or backtracked on investment plans to avoid US punishment, but France and Germany have repeatedly said that they support the Iran deal and want business to continue.

Bloomberg

Irish Independent