INSTEX: An Instrument Only on Paper

Exactly one year ago the foreign ministers of France, Germany and the UK  created the so-called Instrument for Supporting Trade Exchanges (INSTEX) to facilitate legitimate trade with Iran without violating the US economic sanctions. Since then absolutely nothing has happened. 
The purpose of the measure was to help salvage a nuclear deal Iran had signed with six world powers in 2015 after the United States withdrew in May 2018 and imposed a range of sanctions that are hurting Iran. 
As INSTEX remains on paper, no goods have been exchanged through the mechanism — a situation Michael Tockuss of the German-Iranian Chamber of Commerce finds deeply disappointing. 
He told DW that "we are not even at the stage where we can pass on a phone number when a company calls us asking to be put in touch with INSTEX."
He says that currently the mechanism is irrelevant to EU-Iranian trade — for the past six months, INSTEX has been little more than "a political project aimed at fostering Iran's hopes."
According to the German Statistical Office, Germany and Iran traded goods worth €1.5 billion ($1.6 billion) in 2019 — just half of what the two countries traded in the years before. 
Iranian Ambassador to Germany Mahmoud Farazandeh recently vented his frustration at the situation, saying that "one should properly know one's abilities before making such commitments." 
Alluding to Germany's diplomatic promises, he said that "when you issue a check, you should first make sure you have money in your bank account so you can honor your commitment."

According to an unnamed INSTEX source, there are plans to strike a deal soon. "We need to reach an agreement to lay the groundwork for the future," the source told DW, adding that mutual distrust had slowed down negotiations considerably.

Lack of Political Will  

The INSTEX source also told DW that the preparations have taken so long because "Iran has had to agree all kinds of aspects connected to the transaction mechanism with three European states, and that unfortunately takes a lot of time."

Yet Sascha Lohmann of the German Institute for International and Security Affairs (SWP) believes this delay has a different reason. He argues that "one can conclude from this that [the trade mechanism] does not have sufficient backing from high-ranking political figures."
This could well be the result of US displeasure at INSTEX, even though the mechanism is only designed for the exchange of humanitarian goods. 

Open Secret 

That INSTEX has not lived up to expectations is an open secret. At the German government's press conference on January 15, Foreign Ministry spokesman Rainer Breul admitted that "we are unable to provide the economic opportunities that Iran expected from this arrangement and which have now vanished due to the US withdrawal. We cannot fully compensate for this."
Although there had been plans to facilitate the trade of oil and gas via the INSTEX mechanism, this is now not the case. This poses a problem for Iran, which is rich in both and depends on their export. 
According to SWP analyst Lohmann, the mechanism is not designed to facilitate enough trade to persuade Iran to honor the terms of the nuclear deal.
Ellie Geranmayeh, an expert on Iran with the European Council on Foreign Relations, argues that it became clear by last summer that INSTEX was more of a political and symbolic gesture rather than a genuine economic initiative.