INSTEX Issues Time for EU Reckoning

EghtesadOnline: CEO of the Special Trade and Finance Institute, the newly created trade mechanism to reciprocate with the European Instrument in Support of Trade Exchange (INSTEX), says now it is up to Europe to operationalize its trade mechanism.

News ID: ۷۴۷۳۰۲

12 May 2019

Aliasagar Noori made the comment in response to a quote by a German official who had criticized Iran for delaying the setting up of its reciprocal entity.

He said Iran should not be blamed for what is essentially a European commitment (to guarantee Iran’s economic interest), undertaken as part of the nuclear agreement. “What Iran does is to help Europe fulfill its commitments and the agreement calls for no other action on Iran’s part. Therefore, blaming Iran is uncalled for because it is the other party that breached its commitments,” IRNA quoted him as saying.

German Foreign Ministry spokeswoman Maria Adebahr Friday urged Tehran to continue fully implementing the 2015 nuclear agreement, Finncial Tribune reported.

Pointing to the hurdles posed by US sanctions, she said the trade mechanism could not be implemented due to the complex nature of the problem and due to some expectations from the Iranian side.

“As you know INSTEX also needs a mirror structure in Iran, which must be realized by the Iranian side,” she told a news conference in Berlin.

Iran said it has developed its own trading mechanism and is ready to start trade with Europe. “If Europe is ready to start trading, there is no problem on our part,” the CEO said.

In April Iran officially registered a corresponding entity for INSTEX. The company should provide payment settlement services to legal and natural importers and exporters plus domestic and foreign banks. It will also work to build relations with European monetary channels in other countries.

France, Germany and the United Kingdom, three EU countries party to the landmark nuclear deal, announced in February the creation of a financial mechanism for non-dollar trade with Iran.

Despite the creation of INSTEX, the long-awaited European mechanism is not yet operational as had been expected by businesses in and outside Iran.

INSTEX is headquartered in Paris with a German chief executive officer. Germany, France and the UK are the shareholders.

In response to a question whether launching INSTEX is contingent upon ratifying Financial Action Task Force bills, Noori referred to European concerns about Iran’s abidance to international norms. Nonetheless, he rejected claims that Europe has set preconditions to operationlize its trade mechanism.

Passing anti-money laundering legislation has long been a demand of the Paris-based FTF, which wants Iran to strengthen its legal framework to guard against money laundering and financing terror.

Two of the four relevant bills have been approved by the Majlis, but the process has been slowed by those who oppose the legislation in the Expediency Council - a powerful body that resolves disputes between parliament and Guardian Council.