A mirror Iranian company has been founded to partner with the European trade mechanism, known as Instrument in Support of Trade Exchanges (INSTEX).
The Special Trade and Finance Institute (STFI), was officially registered as a private company based in Tehran. It is the reciprocal entity of INSTEX .
According to notice released by the institute, the board of directors of the company comprises representatives of legal entities, including Refah Kargaran Bank-affiliated to the Cooperatives Ministry, Agriculture Bank of Iran, Bank Pasragad, and Fardis Gostar Kish Informatics Services Company affiliated to the Informatics Services Corporation.
ISC is affiliated to the Central Bank of Iran and specializes in designing and developing banking and payment systems and digital banking equipment.
As for the activities of the company, it says it provides payment settlement services to legal and natural importers/exporters as well as domestic and foreign banks. The company will seek to build relations with its European counterpart and monetary channels in other countries.
Iran set up the corresponding financial mechanism in March, two months after France, Germany and the United Kingdom, three EU countries party to the Iran nuclear deal, announced the creation of a financial mechanism for non-dollar trade with Iran.
INSTEX is aimed at facilitating trade with Iran by circumventing sanctions re-imposed by the United States after President Donald Trump pulled out of the 2015 nuclear deal last year and said he wants a new agreement on American terms.
Despite creation of INSTEX, the long-awaited European mechanism is not yet operational as had been expected by businesses in and outside Iran.
In the absence of SWIFT, the main international paying system, INSTEX can provide a channel that enables overseas trade and transactions with Iran. Under mounting pressure from Washington, SWIFT decided to remove Iranian banks from its network last November.
The instrument is aimed at enabling legitimate trade between Iran and the Europe in the first phase before expanding to third parties.
Given the low level of trade between Iran and the Europe, the second phase of the arrangement that should link the country to the world is more important for Tehran.
INSTEX will be based in Paris and managed by German banking expert Per Fischer who is a former Commerzbank manager. The UK will head the supervisory board.
Business Briefing in London
At a briefing with the British business owners and commercial companies’ representatives in London, Fischer said despite all the obstacles, INSTEX will conduct its first ever trade with Iran in shortest possible time, Hamid Baeidinejad, Iran’s ambassador to Britain, wrote in a Twitter post Monday.
The report was confirmed in another Twitter post on Tuesday by the British ambassador to Iran, Rob Macaire. “Per Fischer, President of INSTEX, briefing a packed crowd of UK businesses in London today. Interest in the instrument is strong, and all efforts being made towards starting operations,” he wrote.
According to IRNA, the INSTEX boss and officials from the UK government gathered at an event jointly hosted by the Department for International Trade and the British Iranian Chamber of Commerce (BICC) to communicate to businesses and banks on the recent developments of INSTEX.
A Q&A was held that enabled businesses to feedback comments on how INSTEX would operate so as to be useful for Europe-Iran trade.
Fischer visited Tehran in March and met authorities and representatives from France, Germany, Britain and the EU on how to best implement the payment channel. He conferred with senior banking officials on the structure of the corresponding INSTEX entity in Iran.
The French Ministry of Europe and Foreign Affairs said in a notice last week that the European finical mechanism is in progress and will be put into operation in the near future.
It emphasized that Iran must also make progress on the work to make its mirror-image version of the mechanism operational.
The notice came after the US announced that it no longer would extend sanction waivers to Iranian oil importers, a move that apparently worried Europeans over the possibly of Iran’s leaving the historic nuclear agreement.
The notice sought to reassure Iranians that France, together with its European partners, intends to continue its efforts to ensure that Iran reaps the economic benefits associated with the lifting of sanctions as long as it continues to honor all its nuclear obligations enshrine in the landmark agreement with the six world powers.
