European banks and firms who engage in a special EU initiative to protect trade with Iran will be at risk from newly re-imposed US sanctions, US special envoy for Iran Brian Hook warned on Thursday.

It is “no surprise” that EU efforts to establish the Special Purpose Vehicle (SPV) were floundering over fear in EU capitals that hosting it would incur US punishment, the US special representative said. “European banks and European companies know that we will vigorously enforce sanctions against this brutal and violent regime,” he said.

“Any major European company will always choose the American market over the Iranian market,” Reuters quoted him as saying. Brussels had wanted to have the SPV legally in place by this month though not operational until next year. No country has offered to host it, diplomats told Reuters.