The European Union announced on Friday June 28th that it was launching an alternative financial mechanism to facilitate international commerce with Tehran and thus getting round sanctions.
INSTEX will be part of Europe’s attempt to save the US-abandoned Joint Comprehensive Plan of Action (JCPOA). That deal, signed four years ago entailed Iran ceasing work on its nuclear programme in exchange for a lifting of international sanctions against the country.
The US withdrew unilaterally from the agreement last year, reimposing strict sanctions on Iran’s oil exports and effectively closing off Iranian access to Western financial markets.
International observers have said that Iran has complied with its part of the nuclear deal so far. However, it has threatened to exceed the agreement’s limits on uranium enrichment if Europe does not do enough to offset the effects of American sanctions.
“INSTEX now operational, first transactions being processed and more EU Members States to join,” said Secretary General of the European External Action Service (EEAS) Helga Schmid in a Tweet on Friday.
INSTEX is targeted at trade in essential goods – food, medicine, humanitarian aid – but is not expected to handle payments for Iranian oil.
“It is still not enough, and it is still not meeting Iran’s expectations. I would certainly report back to Tehran that developments which took place in this meeting, the progresses we made in this meeting, and the final decision obviously would be by Tehran to take,” Iran’s Deputy Foreign Minister Abbas Araghchi said on Friday.
The US opposes INSTEX. US special representative for Iran, Brian Hook, said Friday that European nations could not do business with the US and Iran at the same time. Indeed, the EU’s pride in the move is somewhat dented by the common knowledge that, not matter what member governments say, few Europe-based multinational corporations were expected to renew business ties with Iran using INSTEX. 0