ZURICH (Reuters) – Switzerland is holding talks with the United States and Iran about launching a humanitarian payment channel to help ensure food and drugs keep flowing to the Islamic Republic amid tightened U.S. sanctions, the government said.
Restored U.S. sanctions are part of a wider effort by U.S. President Donald Trump to force Iran to curb its nuclear and missile programs as well as its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East.
Iran has taken a defiant line. It will sell its oil and break U.S. sanctions on its vital energy and banking sectors, Iranian President Hassan Rouhani said.
“Switzerland is committed to safeguarding Swiss economic interests and closely follows the development of the situation. The authorities are in direct contact with the competent authorities of the United States, the EU and Iran,” the State Secretariat for Economic Affairs (SECO) said in an emailed statement on Monday.
“Particularly in the humanitarian field, the federal government is committed to ensuring that food and pharmaceutical products can continue to be supplied from Switzerland,” it said, adding it was in touch with U.S. authorities, Iran and unnamed Swiss companies on developing a humanitarian payment channel. A SECO spokesman would not elaborate on the plan.
Switzerland, which represents U.S. diplomatic interests in Iran, was not involved in separate European Union discussions on setting up a special purpose vehicle to continue trade with Iran, but was following the talks closely, SECO said.
The Swiss were also not involved in developing alternative mechanisms to SWIFT in the area of secure messaging and payment transactions.
Switzerland in August encouraged Swiss companies to pursue business ties with Iran prudently and expressed regret at the poor sanctions situation.
Swiss-based Nestle, the world’s biggest food company which produces infant formula and cereals as well as bottled water in Iran, said in August it saw no direct fallout from renewed U.S. sanctions on the country.
But Swiss lender Banque de Commerce et de Placements (BCP) in May suspended new transactions with Iran and started winding down Iran-related business. Founded in 1963, BCP had been among the players active in Iran-related trade finance in commodities, finance sources say.
Overall Swiss exports to Iran rose 7.6 percent in 2017 to 536 million Swiss francs ($534 million) while imports rose 300 percent to 85 million francs. In the first nine months of this year, exports fell to 311.2 million while imports hit 17.2 million, provisional trade data show.
($1 = 1.0046 Swiss francs)
Additional reporting by Jonathan Saul; Editing by Robin Pomeroy, Richard Balmforth