Iran's ECA Moves to Help Trade With Europe

EghtesadOnline: In a series of tweeter posts head of the Export Guarantee Fund of Iran said memorandums of understanding will be signed soon with European countries to facilitate trade.

News ID: ۷۴۷۴۴۳

28 May 2019

“In line with efforts to facilitate trade with Europe, a MOU will soon be signed between EGFI and some European countries,” Afrooz Bahrami wrote.

In another tweet she said the focus of MOUs will be on “sharing information between Iranian and European companies, cooperation to collect debts, promoting reinsurance or [creating] mutual insurance and boosting technical and educational collaboration.”

In an another tweet, she pointed to the much touted trade mechanism, known as the Instrument in Support of Trade Exchanges  (INSTEX), reiterating that the MOUs will create new capacities for two-way trade under INSTEX auspices, Financial Tribune reported.

INSTEX is aimed at facilitating trade with Iran by circumventing sanctions reimposed by the United States after it pulled out of the 2015 nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA), last year.

Despite the creation of INSTEX in February, the mechanism is still struggling to become operational due to mounting US pressures and threats against countries and companies wanting to trade with Iran.

The instrument is aimed at enabling legitimate trade, essentially in food and medical products, between Iran and the European Union in the first phase before expanding to incorporate third parties.

Iran has set up a corresponding channel, dubbed as the Special Trade and Finance Instrument (STFI), to reciprocate INSTEX.

EGFI was established in 1973, as the first export credit agency in Middle East and North Africa region. The state-owned body, affiliated to the Ministry of Industries, Mining and Trade, promotes Iran’s non-oil export by providing local companies export guarantees and insurance to cover risks in and emanating from export.

The fund is capable of providing cover for export risk to the tune of $2.3 billion  -- accounting for 5% of Iran’s $40 billion non-oil export market.