Business And Markets

German FM: New INSTEX Transactions on Agenda

German FM: New INSTEX Transactions on Agenda  German FM: New INSTEX Transactions on Agenda

New transactions using the European Union’s financial settlement mechanism INSTEX (Instrument in Support of Trade Exchanges) will take place soon, German Foreign Minister Heiko Maas told a press conference Tuesday. 
"INSTEX is still in its infancy after the first transaction. We are in close contact with each other, and new transactions will take place as soon as possible," he said. 
On March 31, the foreign ministry in Berlin said France, Germany and the United Kingdom had undertaken their first deal with Iran to supply medical supplies using INSTEX. 
After a long delay, it eventually conducted its first transaction, which involved the sale of medicines worth €500,000 ($539,667) by a private firm in Germany to a company in Tehran 
According to Maas, the new transaction will deal with export of medical supplies to help restrain the spread of coronavirus. "Ultimately, this is a big, very urgent topic in Iran", the minister said, DW reported. 
The trade mechanism was set up in January 2019 by France, Germany and Britain, the three parties to Iran’s 2015 nuclear deal, after the United States quit the historic agreement and imposed new sanctions on Tehran in 2018. 
Its purpose was to bypass US sanctions and facilitate trade between Iran and the European Union, and possibly other third parties, so as to keep the agreement alive.
"Each individual transaction should and will be carefully monitored to eliminate abuse, especially in terms of financing terrorism and money laundering", said Maas. 
Although medicine and other humanitarian goods are exempt from US sanctions, banking restrictions and threats of secondary sanctions have severely hampered the supply of critical goods because foreign firms, fearing US wrath, exercise caution and prefer not to deal with Iran.
INSTEX is set to cover trade of humanitarian goods and only with the EU in its first phase and is not likely to cover other sectors and third parties any time in the near future, given its snail’s pace. 

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