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The German Federal Foreign Office confirmed that the first transactions between Europe and Iran has successfully been concluded through the Instrument in Support of Trade Exchanges (INSTEX).
A European payment system set up by Germany, France and the UK for trade with Iran, INSTEX has been designed to circumvent US sanctions on the Islamic Republic.
In a Twitter post on Tuesday, the German Federal Foreign Office announced, “France, Germany and the United Kingdom confirm that INSTEX has successfully concluded its first transaction, facilitating the export of medical goods from Europe to Iran. INSTEX and its Iranian counterpart STFI will work on more transactions and enhancing the mechanism.”
An Iranian structure parallel to INSTEX, the Special Trade and Finance Institute (STFI) was launched in March 2019, by a group of Iranian state and private banks to match the European mechanism.
In May 2018, President Donald Trump pulled the US out of the Joint Comprehensive Plan of Action (JCPOA), signed between Iran and the P5+1 in July 2015, and reimposed Washington’s unilateral sanctions on Tehran. The sanctions have hindered, among many other things, the delivery of international humanitarian aid, drugs and medical equipment to Iran, particularly, now that the country is fighting against the coronavirus.
By setting up the INSTEX payment mechanism, the three European states aimed to safeguard Iran’s interests within the framework of the JCPOA and, thus, preserve the deal, a goal they have, in practice, failed to achieved so far.
Over the past two years, Iran has repeatedly criticized Europe for failing to honor its pledges under the JCPOA, and retaliated by scaling back from its own commitments under the deal.
Tehran has, however, vowed to reverse all its nuclear responses as soon as the other JCPOA signatories begin fully implementing their nuclear obligations, describing the INSTEX as just a prelude to the implementation of Europe’s 11-fold commitments under the JCPOA.
US officials have repeatedly expressed their dissatisfaction with the mechanism, calling on European states to refrain from joining it. Defying US anger at the system, Belgium, Denmark, Finland, the Netherlands, Norway and Sweden joined it in late 2019.
