EU foreign affairs chief Federica Mogherini speaks at an Asean-EU meeting in Manila in August 2017. Photo: Reuters / Dondi Tawatao

The European Union is moving forward with the creation of a “legal entity” to protect Iran’s ability to export oil and import European goods, its foreign policy chief Federica Mogherini announced on the eve of the UN General Assembly.

“EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue trade with Iran,” Mogherini said on Monday night. She spoke while alongside Iranian Foreign Minister Javad Zarif.

The mechanism will initially be geared toward European companies, but could be extended to cover third parties seeking legal protection from US sanctions, she said following a ministerial meeting with fellow Iran deal signatories: Russia, China, the UK, Germany and France.

The United States pulled out of the Joint Comprehensive Plan of Action, better known as the Iran nuclear deal, in May. An initial tranche of sanctions was reimposed in August, and a second round is coming in November.

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.

“It’s put on hold,” chief executive Nicolas Dufourcq was quoted by Reuters as saying. “Conditions are not met […] sanctions are punitive for companies,” he added.

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