In a talk with the news website of Iran Chamber of Commerce, Industries, Mines and Agriculture, Ali Asghar Nouri said a pilot import undertaking has been coordinated with INSTEX, but its payment settlement is contingent on either selling Iran’s crude oil or opening a credit line that should be repaid using Iran’s oil revenues.
As for the pilot export undertaking, the CEO said they have approached export companies with direct trade relations with Europeans to participate in the mechanism.
Nouri pointed to the myriad obstacles, especially banking ones, facing export companies, and said both entities have engaged in talks over finding a bank to handle such transactions, Financial Tribune reported.
“At present, we are asking the Europeans to introduce a bank to act as mediator between Iranian and European traders. Efforts have been made in this regard, but the bank has not been introduced to us formally,” he said.
Set up by France, Britain and Germany, INSTEX is a barter trade mechanism aimed at facilitating trade between EU state members and Iran under the shadow of harsh American sanctions reimposed on various sectors of Iran’s economy after US President Donald Trump pulled out of a 2015 nuclear accord between Tehran and world powers last year.
Five month after INSTEX was created, the remaining signatories to the nuclear deal announced in late June that the EU mechanism is up and running and it is processing the first transactions.
The system will initially only deal with products such as pharmaceuticals and foods that are not subject to US sanctions.
In April, Iran officially registered STFI to correspond with INSTEX. The former should provide payment settlement services to legal and natural importers and exporters, as well as domestic and foreign banks. It will also help forge relations with European monetary channels in other countries.
Observes ascribe European procrastination to start commercial transactions with Iran through INSTEX to their fears of the US wrath.
Nouri said INSTEX has emerged from the nuclear deal between Iran and the remaining signatories, so it has nothing to do with US sanctions.
“If INSTEX is to be subjected to US sanctions, why did Europeans create it in the first place?” he asked.
The CEO of STFI reiterated that INSTEX should be financed more by Iranian oil export revenues than non-oil exports.
“They have to buy our oil. The earnings should be deposited into INSTEX to be used for settling import payments,” he said.
Asked if purchasing Iran’s oil would not expose EU countries to sanctions, Nouri said, “This is their problem. INSTEX needs capital to work. Our stance is clear: They have created a mechanism and they must find solutions to make it operational.”
French Finance Minister Bruno Le Maire said on Thursday that INSTEX will complete a first limited transaction in the coming days.