US delivers first shipments of medicine to Iran via Swiss channel

ZURICH/WASHINGTON - A humanitarian channel to bring food and medicine to Iran has started trial operations, the Swiss and US governments said on Thursday, helping supply Swiss goods to the struggling population without tripping over US sanctions.

The Swiss Humanitarian Trade Arrangement (SHTA) seeks to ensure that Swiss-based exporters and trading companies in the food, pharmaceutical and medical sectors have a secure payment channel with a Swiss bank through which payments for their exports to Iran are guaranteed, a government statement said.

Three shipments of cancer and transplant drugs have been sent to Iran through this channel and the transaction has been processed, US Special Representative Brian Hook told a press briefing.

"We are pleased to announce that we have completed the sale and delivery of cancer drugs and transplant drugs to Iran," Hook said, adding that more companies were interested in using the channel and he was in touch with them.

"We have created a very high standard of due diligence, but we have now already had one company that has met that," he said, adding that there were likely to be more similar transactions. "It’s the first one. There will be more to come."

Food, medicine and other humanitarian supplies are exempt from the sanctions that Washington reimposed on Tehran after President Donald Trump walked away from a 2015 international deal over Iran's nuclear programme.

But the US 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.

Alireza Miryousefi, spokesman for Iran's UN mission, said the opening of the channel was evidence of "false claims" that medicine and food were exempt from the sanctions. "If they were...then why require this special channel?" he tweeted. He accused Washington of waging "economic terrorism against the Iranian people."

Abdolnaser Hemmati, head of Iran’s central bank, was quoted as saying by Iran's Tasnim news agency that if Americans were sincere about supplying medicine, they must provide a banking mechanism. "Providing a Resources Transfer Mechanism and financing it is an important criterion for assessing the validity of their (US) claim."

Humanitarian exports

The project, in the works since 2018, kicked off with an initial payment for a shipment to Iran of cancer drugs and drugs required for organ transplants worth 2.3 million euros ($2.55 million), the government said.

Geneva-based bank BCP and drugmaker Novartis took part in the pilot deal, with the humanitarian channel expected to be fully operational within weeks, a spokeswoman for the State Secretariat for Economic Affairs said.

Swiss and US officials had told Reuters last month that the channel could be up and running within months.

Politically neutral Switzerland has been working with US and Iranian authorities and selected Swiss banks and Swiss companies on the plan. The US Treasury Department will provide banks involved with assurances that financial transactions can be processed without violating US law.

In return, exporters and banks will give the Swiss government detailed information about their business activities and partners in Iran. Bern will verify the information and share it with the US Treasury.

"The successful completion of these transactions provides a model for facilitating further humanitarian exports to Iran," the US Treasury said in a statement.