Treasury Official Doubts EU Can Sidestep U.S. Sanctions on Iran

(Bloomberg) -- The U.S. Treasury Department’s top sanctions official brushed aside European threats to build a workaround to evade President Donald Trump’s penalties on Iran’s oil and banking sectors.

Sigal Mandelker, Treasury’s undersecretary for terrorism and financial intelligence, kicked off a swing through European capitals to drum up support for the Iran sanctions by casting doubt on European efforts to develop a “special purpose vehicle,” or SPV, to keep funds flowing to Iran without using the U.S. financial system.

“I’m not concerned about the SPV actually at all, and I do believe that we’re going to find additional mechanisms by which we can work together,” Mandelker told reporters in London. “I very strongly believe that we have a common picture with our European allies” concerning threats coming out of Iran, she said.

The European Union last week said it “has accelerated” efforts on the workaround after Trump reimposed sanctions. The administration has pointed out that hundreds of companies have canceled plans for deals in Iran, a sign that firms are not waiting for a workaround.

Mandelker, who will meet with counterparts and private-sector figures in Berlin, Paris and Rome, said she will deliver a clear message that the U.S. won’t tolerate efforts to evade the sanctions Trump imposed.

“We are laser-focused on shutting off all of the revenue streams that the Iranian regime uses to fund its de-stabilizing activities across the world,” she said.

Mandelker said she hoped to build common ground with European leaders who face a “clear and present danger ” from the Tehran government, including Iranian involvement in assassination plots in France and Germany in recent years.

Trump’s decision to drop out of an international nuclear deal between Iran and six great powers to pursue “maximum pressure” to halt Iran’s support for terrorism in the Middle East has widened a rift between the U.S. and its European allies. The other nations that joined the accord -- France, Germany, the U.K., Russia and China -- all have vowed to stand by the agreement, which traded restrictions on Iran’s nuclear program for sanctions relief.

The International Atomic Energy Agency said Iran is continuing to abide by limits on its nuclear program it agreed to under the July 2015 deal, according to a 5-page restricted report published Monday and seen by Bloomberg News.

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