States in Talks With Europe to Use INSTEX

EghtesadOnline: A number of countries are holding negotiations with Europe to use their newly-registered special financial mechanism to continue their non-dollar trade with Iran.

News ID: ۷۴۶۷۲۵

19 February 2019

Bahram Qasemi, the ministry’s spokesman, made the announcement to reporters during his regular press conference in Tehran on Monday, ISNA reported.

“[The mechanism] will begin with specific goods and countries, and if the progress is positive, it will be available for other countries to use,” he said.

The special purpose vehicle known as INSTEX (Instrument in Support of Trade Exchanges) is a mechanism for enabling legitimate European trade with Iran while the country is under strict American sanctions, according to Financial Tribune.

It is part of Europe’s measures to fulfill its commitment to safeguard Iran’s financial interests under the 2015 nuclear deal after the United States unilaterally withdrew from the agreement and reimposed the lifted sanctions.

After months of delay, the E3 (France, Germany and Britain) finally announced the system’s official registration in late January. It will initially open a channel between Iran and Europe, but aims to admit economic operators from third countries in the long run, according to the E3 statement.

India a Likely Applicant

It is very important for Iran to be able to use INSTEX for trade with major partners such as India, a top importer of Iranian oil.

Qasemi said India is most likely among those states that have begun talks with Europe to join the channel.

Despite these positive indications, the instrument is yet to become operational, with Iranian officials continuously urging Europe to activate it as soon as possible.

“What Europeans say signifies their will to implement the plan, but we have seen nothing except the channel’s registration,” Qasemi said, adding that what matters are their next steps.

He said Iran will continue to hold intensive expert-level negotiations with Europe, a round of which is expected to take place in the coming days.

Qasemi did not elaborate on the upcoming talks.

“We hope Europeans will agree to take more effective steps for such cooperation … We have announced that the patience and tolerance of [Iranian] people and government has a limit,” he said.

Mere Recommendation

Qasemi was also asked about a paragraph in the E3 statement, which calls on Tehran to bring itself into line with the standards of the Financial Action Task Force, the international body that monitors money laundering and terrorism financing worldwide.

The phrase has been interpreted by some groups as Europe’s precondition for the launch of its mechanism.

Qasemi said, “FATF has nothing to do with INSTEX and Iran is not a country that would accept preconditions.”

He added that the call is a mere recommendation.

FATF-related bills are currently being reviewed by relevant bodies in Iran, but the process has become prolonged.