Skirting US sanctions, Europeans open new trade channel to Iran

Bucharest, January 31

Britain, France and Germany on Thursday launched a trade mechanism to bypass US sanctions on Iran, drawing praise from Tehran — and a warning from Washington.

Brussels hopes the long-awaited special payment system will help save the Iran nuclear deal by allowing Tehran to keep trading with EU companies despite Washington reimposing sanctions after Donald Trump abruptly quit the accord last year.

The three countries — the European signatories to the 2015 deal that curbed Tehran’s nuclear ambitions in return for sanctions relief — launched the device, which has been in preparation for months, at a meeting of EU foreign ministers in Bucharest.

Iran cautiously welcomed the news as a “first step” but US officials dismissed the idea that the new entity would have any impact on efforts to exert economic pressure on Tehran, and fired a fresh warning at anyone thinking of trading with the Islamic republic.

While the new institution, called INSTEX (Instrument in Support of Trade Exchanges) is a project of the three governments, it will receive endorsement of all 28 EU members. The company was registered in Paris on Tuesday with an initial 3,000 euros in capital and a supervisory board with members from France and Germany, and chaired by a Briton. — AFP

Yet to be operational 

• The Instrument in Support of Trade Exchanges (INSTEX) is not yet operational and needs Iran to set up a parallel structure of its own, something which may take some time to complete
• While it is aimed at small and medium-sized companies, it would send an important message to Iran about Europe’s commitment to keep the nuclear deal alive