Iran, major powers labor to keep nuclear deal afloat

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The first round of anti-Iranian penalties, which came into force in early August, are aimed at areas such as the vehicle industry, carpets, metals trading and access to U.S. banknotes.

European Union foreign policy chief Federica Mogherini announced the plan after talks at the United Nations with the remaining members of the accord - Britain, China, France, Germany, Russia.

The remaining members in the Iranian nuclear deal say they will set up a new payment system to maintain business with Iran and bypass U.S. sanctions.

Trump reimposed strict economic sanctions to pressure Iran into talks, including measures to limit the Islamic Republic's oil exports.

Appearing alongside Iranian Foreign Minister Mohammad Javad Zarif at the UN, European Union foreign policy chief Federica Mogherini read out a joint ministerial statement following a meeting with the foreign ministers of France, Germany, Britain, China and Russian Federation.

Several European diplomats told Reuters that the SPV idea was to create a barter system, similar to one used by the Soviet Union during the Cold War, to exchange Iranian oil for European goods without money changing hands.

FILE PHOTO: An Iranian flag flutters in front of the International Atomic Energy Agency (IAEA) headquarters in Vienna, Austria, January 15, 2016.

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"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 to trade with Iran in accordance with European Union law and could be open to other partners in the world", she told reporters.

Some analysts, however, fear that the United States could amend its sanctions laws to ban such barter transactions.

Regarding negotiations with European nations to keep the nuclear deal alive, Velayati said that despite the difficulties Iran expects the Europeans to "comply with their obligations".

In sharp contrast, the five other world powers who signed the nuclear deal remain strongly committed to it, and the new financial facility is nearly certain to anger the Trump administration.

The EU announcement comes a day after French state-owned bank Bpifrance said it was suspending a plan to support companies seeking to do business with Iran. "If (U.S. President Donald) Trump wants to talk to Iran, then he first should return to the (2015) nuclear deal first", the ISNA news agency quoted Rouhani as saying in a meeting with senior editors of foreign media in NY.

Over the past few months, Iran's economy has faltered, and its currency, the rial, hit a new low this week against the USA dollar on the unofficial exchange rate.

The White House promised Monday to keep exerting "maximum pressure" on Iran and said new sanctions were in the pipeline while insisting that the USA was not seeking the overthrow of Tehran's clerical regime. The rial has lost about two-thirds of its value this year, hitting a record low against the USA dollar this month.