Call for Broadening European Use of INSTEX

EghtesadOnline: Iran’s trade with the European Union through the special purpose vehicle, which is aimed at bypassing American sanctions, should not be restricted to the three founders of the mechanism and must be expanded to all EU states, a lawmaker said.

News ID: ۷۴۶۹۷۰

19 March 2019

“Many European countries are still hesitant about joining INSTEX [Instrument in Support of Trade Exchanges] … Only France, Germany and Britain [E3] are pursuing the activation of INSTEX,” Heshmatollah Falahatpisheh, chairman of Majlis National Security and Foreign Policy Commission, said in recent a talk to Mehr News Agency.

The financial payment channel, known as INSTEX, has been jointly set up by E3 to facilitate trade with Iran through a non-dollar system in order to circumvent the United States’ sanctions reimposed after Washington’s withdrawal from the 2015 nuclear deal (formally called the Joint Comprehensive Plan of Action) last year.

The mechanism was proposed by the EU as part of its commitment under JCPOA to safeguard Iran’s economic interests. However, its establishment faced challenges with EU states refusing to cooperate for fear of US penalties, according to Financial Tribune.

The E3 finally took joint responsibility and registered INSTEX in late January, but other EU states still seem to be unwilling to use it.

Falahatpisheh stressed that Iran’s total trade with Europe should not be confined to these three countries.

“Although France, Germany and Britain are the most powerful European states, we expect INSTEX to cover the whole EU and not just the European troika,” he said.

The E3 led the negotiations between Iran and the West over Tehran’s nuclear activities, which started in 2003.

“It has been 15 years since the troika’s leadership of nuclear talks between Iran and the West and under the present circumstances, all European states need to join the western interaction with Iran,” the lawmaker said.

For Iran, INSTEX is needed to facilitate its oil exports. This is while its major European clients, namely Italy, Greece and Spain, are showing great reluctance to use the channel, according to Falahatpisheh, who said he had recently held talks with representatives of several European countries about the issue.

“Although INSTEX does not fulfill all our expectations, any such step by Europe would be a blow to US unilateralism,” he said.