Iran to ‘soon’ sign MoUs with INSTEX stakeholders to start first trade exchanges

The Export Guarantee Fund of Iran (EGFI) says the MoUs will facilitate the transaction of first financial dealings between Iran and Europe within INSTEX and its Iranian counterparty STFI.

27 May 2019
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The Export Guarantee Fund of Iran (EGFI) says will soon sign Memoranda of Understanding (MoUs) with several European countries in a bid to start trade exchanges within the framework of European financial channel INSTEX, noting the mechanism will become operational in “coming weeks”.

“To facilitate commercial ties between Iran and Europe, Memoranda of Understanding (MoUs) will be signed soon between the Export Guarantee Fund of Iran and some European countries,” fund’s CEO, Afrooz Bahrami tweeted on Sunday.

She was referring to Germany, France and the UK, also known as the E3, the three European signatories to the the 2015 international treaty on Iran’s nuclear program.

The European trio established Instrument in Support of Trade Exchanges (INSTEX) in January in a bid to allow the trade of non-sanctioned goods and commodities with Iran after the US withdrew from the nuclear pact May last year and reimposed unilaterally economic sanctions on Iran.

“Taking into account the fact that INSTEX will become operational within next weeks, these MoUs can create new capacities for Iran-Europe trade exchanges within the framework of INSTEX,” she added in her Twitter account.

Iran also established a counterparty to INSTEX, called Special Trade and Financing Instrument between Iran and Europe (STFI) in April in a bid to speed up the work.

The MoUs cover Iranian and European companies’ exchange of information, cooperation on debt clearance, reinsurance or co-insurance as well as educational and technical cooperation, according to the president of the Export Guarantee Fund of Iran (EGFI), who is also a member of the delegation board of Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA).

Export Guarantee Fund of Iran (EGFI) was established in 1973 as the first “Export Credit Agency” (ECA) of “Middle East and North Africa” (MENA) region. It resumed operations in 1994 as a legally and financially independent entity, 100% state-owned, and affiliated to Ministry of Industry, Mine, and Trade of Iran (MIMT), with the purpose of supporting, developing and promoting Iran’s non-oil exports through providing Iranian exporters with export credit policies to cover the major political & commercial risks involved in their export operations as well as credit guarantees to help them meet their financial requirements, according to the fund's website. 

Earlier on Saturday, Ali Asqar Nuri, the STFI president said his company is prepared to conduct a pilot trade exchange with INSTEX in a bid to find out how the process works and how to improve it, ironing out the details.

As the two sides speed up the preparatory works for the first trade exchange, many other European states such as Spain are also showing interest in joining the financial channel that is supposed to be used in its first phase to facilitate trade of humanitarian goods with Iran.