Addition of Six European States to INSTEX Inconsequential

EghtesadOnline: A decision by six more European countries to join the EU financial mechanism set up to facilitate trade with Iran is aimed at creating optimism and will unlikely be effective, a former diplomat says.

News ID: ۷۸۵۱۰۳

07 December 2019

"I do not think the addition of these countries to the INSTEX would have a serious and strong impact on the current situation," Mohsen Pak-Ayeen, who has served as Iran’s envoy to several countries, told ISNA in a recent interview, in reference to the Instrument in Support of Trade Exchanges—a special mechanism aimed at bypassing US sanctions against Tehran.

Belgium, Denmark, Finland, the Netherlands, Norway and Sweden said in a joint statement that they would begin the process of joining the financial system.

INSTEX was established in January by France, Britain and Germany—key European countries who signed a nuclear deal with Iran in 2015—to salvage the accord between Iran and major powers after US President Donald Trump withdrew his country from the agreement, Financial Tribune reported.

Pak-Ayeen, an expert on international affairs, says the latest move by Europe is only designed to "buy time".

"JCPOA is an international document and considered an achievement for the Europeans so they do not want to see its collapse. But, on the other hand, they do not want to fulfill their obligations," he said, using the abbreviation for the UN-backed nuclear accord's full name—the Joint Comprehensive Plan of Action.

He added that Europe's policy is to "prolong" the current process so that they would not have to offer any concessions to Iran.

"The fact that six more European countries have joined INSTEX is meant to create an environment of optimism so that Iran would stay in the agreement while a solution is sought."

European Failure

Pak-Ayeen said the European signatories were well aware that INSTEX was supposed to include oil sales but they failed to meet Iran's demands.

The arrangement will initially focus on essential goods not subject to the sanctions, such as humanitarian, medical and agricultural products.

"It is really important that measures possible within the INSTEX framework be clarified for Iran. In the past year, the Europeans failed to do anything to secure Tehran's economic benefits under the deal. That is why a sense of pessimism about Europe's moves prevails in Iran now," he said.

The analyst noted that Iran's decision to reduce its compliance with the nuclear pact was "logical".

In response to sweeping US sanctions intended to prevent Iran's international sales of crude oil and Europe's inaction, Tehran began to scale back its nuclear commitments in phases.

It has so far exceeded the deal's limits on nuclear enrichment purity and stockpiles of enriched uranium as well as research and development, including on the advancement of centrifuges used to enrich uranium.

In the latest move, it resumed uranium enrichment at its underground Fordow nuclear plant. However, Iranian authorities say these measures are "reversible" when the European signatories fulfill their JCPOA commitments and ensure Iran benefits from the international nuclear deal.