December 11, 2019 / 4:23 PM / 8 months ago

Exclusive: Swiss humanitarian channel to Iran seen within months - Swiss, U.S. officials

BERN (Reuters) - A humanitarian channel to bring food and medicine to Iran could be up and running within months, senior Swiss and U.S. officials told Reuters, helping supply Swiss goods to the struggling population without tripping over U.S. sanctions.

U.S. Ambassador to Switzerland and Liechtenstein Edward McMullen gestures during an interview with Reuters in Bern, Switzerland December 10, 2019. Picture taken December 10, 2019. REUTERS/Arnd Wiegmann

Food, medicine and other humanitarian supplies are exempt from sanctions that Washington reimposed last year after U.S. President Donald Trump walked away from a 2015 international deal over Iran’s nuclear program.

But the U.S. measures targeting everything from oil sales to shipping and financial activities have deterred several foreign banks from doing business with the Islamic Republic - including humanitarian deals - just as Iran grapples with major protests.

Pascale Baeriswyl, Swiss state secretary for foreign affairs, and U.S. Ambassador Edward McMullen spoke in separate interviews in the Swiss capital late on Tuesday, days after a rare Swiss-brokered prisoner swap by arch foes Iran and the United States.

“Our role is really to be able to provide food and health goods to the Iranian people. And therefore we are working hard on establishing that humanitarian channel,” Baeriswyl said.

U.S. clarifications announced in October on how to verify and certify such deals - bypassing Iran’s central bank and ensuring that no payments are transferred to Iran - helped advance the project so as to safeguard Swiss exporters.

“Ultimately that depends on companies and banks wanting to participate....We have made progress recently,” Baeriswyl said.

Asked whether the mechanism could be operational in the first half of 2020, she replied: “I hope so, but it is very difficult to predict since it is not entirely in our hands.”

McMullen was also upbeat. “Fortunately, I think we are at that point now where we are working with Switzerland on the final details. And hopefully we’ll be seeing some kind of finality to that conversation in the near future,” he said.

To be sure, big Swiss companies like Nestle and drugmakers Roche and Novartis already produce in Iran. The new channel could encourage smaller players to export food and medicine to Iran.

France has led efforts for more than a year to set up a separate European trade mechanism for humanitarian and food goods with Iran, which has stalled.

Baeriswyl said: “If this (Swiss) model works it would be great if others could follow... It’s not a competing instrument, just a slightly different approach.”

January marks the 40th anniversary of Switzerland’s taking on a mandate of a neutral “protecting power”, representing U.S. diplomatic interests in Iran since Washington and Tehran cut ties shortly after the 1979 Islamic revolution.

Baeriswyl, who held talks in Geneva with Iranian Foreign Minister Mohammad Javad Zarif in October that were revealed in Twitter posts, met him again in Zurich last weekend for the handover of U.S. and Iranian prisoners.

“We stand ready - if both parties ask us to - to facilitate more (exchanges), of course,” she said.

Reporting by Michael Shields and Stephanie Nebehay; Editing by Nick Macfie

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