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Germany and most of the EU members declared that they are against the US-sanctions targeting Iran. I wonder how and why all trades with Iran are involving US credit institutes and why trades in Euro seem impossible for the EU. Fear against US sanctions alone targeting EU companies cannot explain this. Moreover, Iran would be willing to accept Euro.

Sources:

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    Mm. Can you, please, give some sources? Heard about oppposite situation.
    – user2501323
    Nov 7, 2018 at 10:48
  • I am 100% sure you don't. There is no single source stating the opposite.
    – user16984
    Nov 7, 2018 at 11:08
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    Until a few years ago the US was the only major single market, i.e. Foreign Exchange Reserves (FER) were mostly in US dollars. More recently the EU has assembled a cohesive single market, the Chinese economy developed a lot, and Japan continues to be a very strong economy. As so the world % of FER in dollars has been dropping. As for your question, your assumption is incorrect. After the US left the nuclear deal, Iran switched to euro for its reporting currency, the EU put in march a SPV plan to deal with US-Iran sanctions, and is now considering switching to euro for oil trade with Iran.
    – armatita
    Nov 7, 2018 at 12:31
  • @dgrat, see your comment and sources, that is VERY interesting question.
    – user2501323
    Nov 7, 2018 at 12:38
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    @armatita it appears that the change of reporting currencies happened at the beginning of 2017, way before the USA left the nuclear deal (of course at that time Trump had already threatened to do so). More than current sanctions, I interpret it as a way to avoid the change of value of the € vs. $ making it complicated to assess Iran's assets (which are mostly in € and Yuan). financialtribune.com/articles/economy-business-and-markets/…
    – SJuan76
    Nov 7, 2018 at 16:19

2 Answers 2

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As far back as 2009, Iran's president order replacement of the US dollar by the euro in foreign exchange. Several of the articles now cited in the question confirm that use of US dollars in Iran's international trade was already "negligible" by the time (February 2018) the Iranian government actually banned the practice of pricing transactions in dollars. So it seems that using euros to trade with Iran isn't new, and that some sources might be emphasizing the currency aspect of things with political intent.

The thing that IS new is the EU's attempt to invent protections (from US Sanctions) for European firms trading with Iran. To do this they want to bypass SWIFT, a banking communications network. SWIFT is subject to US sanctions. There have been discussions of a Special Purpose Vehicle (SPV) to do this, but exactly what such a SPV might be still seems unclear. Iran is unhappy with the lack of progress, but European interests are still concerned that US sanctions might still adversely impact any country which decides to "host" the SPV.

The US Secretary State has harshly criticized attempts to bypass sanctions through any mechanism. The US administration may adjust the sanctions protocol to counter the SPV if and when it becomes better defined. But for obvious reasons its proponents are reluctant to better define or implement it.

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Because world finance system is a very complex system, and if you want to change it, you need time. Yes, for now, all EU transactions are done by SWIFT - US-pressured processing system.

Sources about very high pressure on SWIFT from US (not fully controlling, but possiblities to block transactions in any time - it is a strong synonym of controlling):

Its flaws are obvious - each and every transaction can be blocked by US controller. But recently EU presented its own system, SPV (special purpose vehicle):

So, situation may change rapidly. Also, SPV may be used not only for transactions with Iran, but for transactions with every country, despite of US sanctions.

For now it is decided, where to place SPV - in France or Germany. Heard about scheme, when if SPV is registered in France, it will be German-controlled, and mirror: if it will be placed in Germany, it will be France-controlled.

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    Are you sure SWIFT is under US control? Wikipedia says it's an independent and international organisation situated in Belgium.
    – Philipp ♦
    Nov 30, 2018 at 12:42
  • Absolutely sure. Will find links now and attach to answer
    – user2501323
    Nov 30, 2018 at 12:44
  • Done. Maybe not fully controlling, but using for transactions blocking, as a financial weapon.
    – user2501323
    Nov 30, 2018 at 12:48
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    The sources you posted do not clearly demonstrate that the claim that SWIFT is "US controlled" is correct. The first article merely shows that the US tries to pressure SWIFT, but with varying degree of success. The second and fourth are about something completely different: The NSA spying on SWIFT transfers, not preventing them. The 3rd is just a political blog with a very small audience. I therefor believe that your claim that SWIFT is "US-controlled" is exaggerated.
    – Philipp ♦
    Nov 30, 2018 at 13:28
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    Hmm. Okay, re-formulate.
    – user2501323
    Nov 30, 2018 at 13:30

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