INSTEX Chief to Visit Iran

EghtesadOnline: Michael Bock, head of Iran-EU trade channel, known as the Instrument In Support of Trade Exchange (INSTEX), will visit Iran on January 12 to discuss the latest developments on the long-delayed mechanism.

News ID: ۷۴۹۲۰۸

17 December 2019

This was announced by the head of Iran-Germany Joint Chamber of Commerce (AHK), Abbasali Qazaee, IBENA reported on Monday.

In his tour Bock is expected to attend a meeting of AHK representatives to which senior political and economic officials are invited.

Assessing Bock’s agenda, Qazaee said the visit would help accelerate the operation of INSTEX. He hoped Bock would “pursue a goal different from his visit in September, according to Financial Tribune.

“In his last visit Mr. Bock stressed that he was assessing the situation and getting familiar with the issues. But there is reason to believe that things have turned for the better and he is talking with a promising tone,” Qazaee said.

“However, this does not mean all problems are solved,” he added, underscoring the narrow scope of INSTEX, especially in the initial phases of implementation.

“If the mechanism is helpful, it would cover pharmaceuticals and medical equipment in the first phase and later maybe food,” he said, adding “we can’t expect more from INSTEX”.

INSTEX is a mechanism set up in January by France, Germany and the UK (E3) with the aim to enable companies in Iran and Europe maintain trade in defiance of the US sanctions, by offering a payment channel that would not be subject to US penalties.

After a meeting of the Joint Commission of the Iranian nuclear deal in June, the E3 said that the mechanism had become operational. However, Tehran has officially complained that the mechanism is a name and so far has done nothing to deliver or help bilateral and multilateral trade.

Donald Trump unilaterally abandoned the nuclear deal, officially known as Joint Comprehensive Plan of Action (JCPOA), in 2018 and imposed tough economic sanctions on Iran.

Nothing Tangible

The move was not supported by other signatories to the deal, and the EU announced that it would do everything possible to save the JCPOA. But its persistent pronouncements and support for the landmark agreement has produced nothing tangible for Iran.

Apart from E3, six European countries, namely Belgium, Denmark, Finland, the Netherlands, Norway and Sweden announced in a joint statement in November their intent to join INSTEX.

While INSTEX would initially only deal with food and medical supplies, Tehran insists that INSTEX include oil export or provide substantial credit facilities for it to be beneficial.

Asked if he has any numbers on the possible value of transactions within INSTEX, Qazaee said that for restoring trade [with EU], “we need billion-dollar figures and small figures would not help.”

In similar statements, Iran’s deputy foreign minister, Abbas Araqchi, told IRNA on Monday that INSTEX and its Iranian counterpart (the Special Trade and Finance Institute) are at the highest level of interaction, expressing the hope that the two sides would make  the first deals in the coming days.

Iran officially created a corresponding entity for INSTEX in March to function as a go-between for trade with Europe.

Bock took office after his compatriot, Bernd Erbel, resigned in early August. Bock travelled to Tehran in September to assess the dynamics of conducting trade within the mechanism and got acquainted with potential businesses able and willing to join INSTEX.