Five world powers and Iran agree to set up legal entity to circumvent US sanctions after Trump pullout from 2015 deal.

The EU has vowed to stick to the 2015 nuclear agreement with Iran [File: Stephanie Lecocq/AP]

The EU has vowed to stick to the 2015 nuclear agreement with Iran [File: Stephanie Lecocq/AP]

In a major snub to the United States, the European Union has decided to set up a new mechanism to enable legal trade with Iran without encountering US sanctions.

The EU will create new payment channels to preserve oil and other business deals with Iran, Federica Mogherini, the bloc’s foreign policy chief said late on Monday, in a bid to evade US punitive measures.

US President Donald Trump withdrew from a 2015 nuclear deal in May and re-imposed sanctions on the country.

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