EU’s Mogherini says INSTEX, ‘ready to be operational’

The European Union’s External Action High Representative Federical Mogherini has said that the INSTEX is ready to be operational and carry out the first trade exchange with Iran before Tehran’s 60-day ultimatum expires next week.

26 June 2019
ID : 22070
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The European Union’s foreign policy chief says INSTEX is ready to be operational in a message to Iran as Tehran’s 60-day deadline to reduce more of its nuclear commitments will expire next week.

“I believe that this is now ready to be operational,” Federica Mogherini told the media in Brussels on Tuesday following a meeting with Pakistani Foreign Minister Shah Mahmood Qureshi.

She was referring to the European payment channel, called Instrument in Support of Trade Exchanges (INSTEX), created late January to carry out business with Iran in the wake of reimposition of US sanctions on Iran after Donald Trump withdrew the US from the nuclear agreement of 2015, also known as the Joint Comprehensive Plan of Action (JCPOA).

“I hope that this is something that can help to keep Iran compliant with the agreement, as it has been so far and as we all want to see this continue to be the case,” added Mogherini, referring to the Iranian government’s 60-day ultimatum to Europe to normalise economic ties or it will scale down more of its nuclear commitments.

Iran and the five remaining parties of the JCPOA, that is, Russia, China, Germany, France and the UK, will meet this Friday for the Joint Commission of the nuclear deal to see how to keep Iran content. 

Tehran has said that business could be as usual should Iran-Europe trade resumes, saying it could get back to the situation before the first round of reduction of its nuclear obligations, announced 8 May.

Central Bank of Iran (CBI) set up Special Trade and Financing Instrument between Iran and Europe (STFI, called SATMA in Persian), to be the counterparty to INSTEX and start financial transactions.

Per Fishcer, the German president of INSTEX, has already been twice in Tehran to hold talks with Iranian officials, hammering out details of the platform.

The mechanism has been designed to trade humanitarian goods, such as agrifoods and pharmaceuticals with Iran.

No trade exchange has taken place so far between Iran and Europe in spite of all these developments. 

CBI Governor Abdolnaser Hemmati has said the European trade mechanism’s success depends on the fact that EU states buy Iranian crude and open credit lines for their companies that are interested in doing business with Iran.

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