SHTA Seen as Secure Channel to Pay for Import of Vaccines

EghtesadOnline: Head of the Iran-Switzerland Chamber of Commerce says the Swiss trade channel, known as the Swiss Humanitarian Trade Agreement (SHTA) can be used to remove hurdles to import vaccines to fight Covid-19.

News ID: ۷۵۱۷۴۸

29 December 2020

Sharif Nezam-Mafi pointed to restrictions due to Iran's inclusion in the blacklist of the international anti-money laundering watchdog, the Financial Action Task Force, saying that SHTA was in fact created to eliminate such limits.

SHTA become operational a year ago with the aim to help import food, medicine and Swiss goods without falling foul of the tough US sanctions that many say have taken the form of an economic siege.

On the merits of SHTA, Nezam-Mafi said it is not susceptible to restrictions announced by the FATF. In recent weeks delays in buying the much-needed vaccine have become a major source of concern. Virtual campaigns have been launched demanding the government to import the vaccines sooner rather than later while senior officials say doing so is difficult mainly due to US hostility and its economic siege.

The news website of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) quoted Nezam-Mafi as saying that "the purchase is in progress via SHTA".

"With Iran on the FATF blacklist, buying vaccine through channels other than SHTA will hit snag. The Swiss channel is designed for this purpose," he said.

SHTA was created after the US Treasury Department granted waivers for using a portion of the Central Bank of Iran’s overseas resources to import basic goods and pharmaceuticals.

Unlike INSTEX

Drawing parallels between SHTA and a similar channel (known as INSTEX) designed by three European countries who are members to the Iran nuclear deal, Sharif Nezam-Mafi said "SHTA is not like INSTEX. It is like a bank designed for such needs.” INSTEX, or the Instrument in Support of Trade Exchange, was never fully operational.

He recalled that BCP bank of Switzerland is authorized to handle SHTA transactions. Two Iranian banks are also involved, namely Saman Bank and Middle East Bank.

Last week, the government spokesman Ali Rabi'ie confirmed that being on FATF blacklist has hampered efforts to import the vaccines. He said several efforts to transfer money for the vaccines failed due to the FATF restrictions and US penalties.

Later, the Governor of Central Bank of Iran Abdolnasser Hemmati announced the bank had found a way to pay for importing it. He said the bank had ordered payment of €200 million to purchase 16.8 million doses of the vaccine soon after receiving approval from a South Korean bank to transfer the money.

Two banks in Turkey and Europe and one in Iran have helped transfer of funds from South Korea to the Swiss bank processing the Covax payment.

Covax is global initiative operating under WHO which brings together governments and manufacturers to ensure eventual Covid-19 vaccines reach those in greatest need. The initiative strives for fair and equitable distribution of vaccine doses. Iran announced in October that it had joined the Covax initiative.

Last February FATF lifted the suspension of counter-measures on Iran and called on its members and all jurisdictions to apply effective counter-measures against the country.

The Expediency Council, the top legislative body in Iran, is working on the two remaining bills mandated by the FATF.

Debate over the Palermo (convention against transnational organized crime) and terrorist financing conventions (CFT) bills is underway at the EC on the request of the Rouhani administration.