Britain, France and Germany on Thursday launched a trade mechanism that would bypass US sanctions on Iran, AFP reported.
Brussels hopes the long-awaited special payment system will help save the 2015 Iran nuclear deal by allowing Tehran to keep trading with EU companies despite Washington reimposing sanctions after President Donald Trump quit the accord last year.
The three countries -- the European signatories to the 2015 deal that curbed Tehran's nuclear ambitions in return for sanctions relief -- launched the device, which has been in preparation for months, at a meeting of EU foreign ministers in Bucharest.
Iran's Foreign Minister Mohammad Javad Zarif welcomed the news as a "long overdue first step".
"We remain ready for constructive engagement with Europe on equal footing & with mutual respect," he tweeted.
The White House has been warning the Europeans that they could face stiff fines and penalties should they try to circumvent the sanctions.
On Thursday US officials dismissed the idea that the new entity would have any impact on efforts to exert economic pressure on Tehran, and fired a fresh warning at anyone thinking of trading with the Islamic Republic, according to the AFP report.
While the new institution, called INSTEX -- short for Instrument in Support of Trade Exchanges -- is a project of the three governments, it will receive the formal endorsement of all 28 EU members.
The company was registered in Paris on Tuesday with an initial 3,000 euros in capital and a supervisory board with members from France and Germany, and chaired by a Briton.
"INSTEX will support legitimate European trade with Iran, focusing initially on the sectors most essential to the Iranian population -- such as pharmaceutical, medical devices and agri-food goods," the foreign ministers of Britain, Germany and France -- Jeremy Hunt, Heiko Maas and Jean-Yves Le Drian -- said in a joint statement.
In the longer term, INSTEX aims to be open to third countries wanting to trade with Iran, the statement said -- an ambition unlikely to please Washington.
Hunt said the move was "a clear, practical demonstration" of Europe's commitment to continuing the nuclear deal, but insisted it "does not in any way preclude us from addressing Iran's hostile and destabilizing activities".
Iran's deputy foreign minister Abbas Araghchi welcomed the move but said that to be of any value it must allow trading of sanctioned goods.
Joseph Giordono-Scholz, spokesman for the US embassy in Berlin, insisted INSTEX would not undermine America's economic campaign against Tehran.
"Entities that continue to engage in sanctionable activity involving Iran risk severe consequences that could include losing access to the US financial system and the ability to do business with the United States or US companies," he was quoted as having said.
The launch of INSTEX comes with EU countries growing increasingly concerned about Tehran's ballistic missile program, as well as its human rights record, its interference in Middle East conflicts and recent attempted attacks against opposition groups in Europe.
France has in the past expressed concerns over Iran’s ballistic missile program and has suggested that Iran could be sanctioned over it, though it has rejected the idea that these sanctions be tied to the 2015 nuclear agreement with Iran.
Iran recently attempted to launch a satellite but was unsuccessful, saying the satellite failed to reach the “necessary speed” required to go into orbit.
Iranian President Hassan Rouhani later stated that Iran will be ready for a new satellite launch in a few months' time.