European governments are locked in negotiations over a special purpose vehicle to safeguard trade with Iran as they prepare for a long-awaited US crackdown on Tehran’s oil and finance sectors to come into force.

Hours before Monday’s launch of a US squeeze on Iran’s energy industry and central bank, European diplomats said a planned special channel to safeguard non-US trade with Iran would not be ready in time. Agreement has yet to be reached on crucial details, including where to locate it as countries fear triggering a political and economic backlash from Washington if they play host. European states have not put a formal deadline on when the launch will be, but some diplomats had hoped to have the channel ready in time for the reimposed US sanctions.

The Trump administration will add more Iranian banks to its sanctions list later on Monday, forcing international financial messaging system Swift to choose whether to fall in line with the US and cut the institutions from its global cross-border payment network. The Belgium-based company, which declined to comment on Sunday, could face possible punishment under new EU rules if it complies with US orders.