The Governor of the Central Bank of Iran criticized European governments for the procrastination over launching the trade mechanism know as Instrument in Support of Trade Exchange (INSTEX).
In an Instagram post late Monday, Abdolnasser Hemmati censured European officials repeating old and tiring statements like “[we] are trying to launch the mechanism,” calling the remarks “lip service and “threadbare.”
France, Germany and the United Kingdom (E3), party to the landmark Iran nuclear deal, announced in February 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 a year ago.
Two months later, Iran officially created a corresponding entity for INSTEX, known as the Special Trade and Finance Institute (STFI).
Despite the birth of INSTEX, the long-awaited European mechanism is not yet operational as was expected by businesses in and outside Iran.
This is while the CEO of the Iranian company says STFI is ready to start trading with Europe.
Referring to EU concerns in recent days over the “complexity of operationalizing” INSTEX, Hemmati said putting into effect the trade mechanism “is not as complicated as it seems.”
He asked the Europeans to start the mechanism by allowing oil imports from Iran or opening credit lines for European traders wanting to export to Iran.
“One simple way to put both trade channels into operation is for Europe to allow Iran oil imports or open a line of credit for their own companies wanting to export to Iran,” he wrote.
Fearing US Antagonism
Addressing anticipated European fears of US wrath, he said if the EU is concerned about Washington’s hostile reactions over goods sent to Iran, they should test their capacity and ability by exporting pharmaceuticals and essential goods to Iran.
Hemmati was alluding to the provisions in the unilateral US sanctions that allow other countries to trade in basic goods and pharmaceuticals with Iran.
In a press conference with British Foreign Secretary Jeremy Hunt last week, the US secretary of state, Mike Pompeo, said there are provisions enshrined in the sanction regime that allow humanitarian aid and certain products to be exported to Iran.
“We have talked with the UK, Germany, and France about INSTEX. We have said so long as that is the vehicle – that is a vehicle being used for that limited purpose, that non-sanctioned purpose, it’s, of course, unobjectionable,” he said.
However, he warned that any transactions beyond that would be subject to US sanctions. “When transactions move beyond that, it doesn’t matter what vehicle’s out there, if the transaction is sanctionable, we will evaluate it, review it, and if appropriate, levy sanctions against those that were involved in that transaction. It’s very straightforward”.
Hemmati’s complaints are in response to the positions of a host of European officials who for six months have been talking about launching the trade channel without announcing a timeline.
In the most recent case in point, Federica Mogherini, the EU’s foreign affairs chief, said the EU is determined to “use all its instruments to implement the nuclear deal in full.” She expressed the hope that the first transactions would start in the next few weeks under INSTEX.
Likewise, a German government spokesman said Monday Berlin is working on maintaining a legal channel for trade with Iran. “Along with our E3 partners, we’re undertaking efforts to keep enabling legitimate trade with Iran, in particular by providing a payment channel”, Steffen Seibert told reporters.
However, a German Foreign Ministry official tried to put the blame on Tehran for not activating its mirror entity for INSTEX.
Rejecting the excuses, the CBI chief said Iran has already set up its own trade mechanism to collaborate with INSTEX and its managers were introduced to the Europeans.
