European diplomats have convinced themselves that they must abide by the flawed 2015 nuclear deal with Iran to demonstrate their credibility. Their latest attempt to keep the deal alive despite U.S. opposition shows otherwise.

Behold the special-purpose vehicle, unveiled last week by the European Commission and Europe’s three signatories to the 2015 deal. The SPV, now christened the Instrument for Supporting Trade Exchange (Instex), is supposed to allow European Union companies to keep trading with Iran under the Joint Comprehensive...