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Russia's EU Envoy: EU’s Iran Trade Mechanism Unavailing

Russia's EU Envoy: EU’s Iran Trade Mechanism Unavailing Russia's EU Envoy: EU’s Iran Trade Mechanism Unavailing

The Instrument in Support of Trade Exchanges, known as INSTEX, a European Union mechanism for financial settlements with Iran, is failing to gain momentum, Russia’s permanent envoy to the EU, Vladimir Chizhov, told Tass news agency on Friday.
"The mechanism is in place but so far it has not gained momentum. The only thing it can now take pride in is that it is now yielding some deals. But these are agreements for food products and not subject to the US sanctions anyway," he said.

"So, it has nothing to do with bypassing sanctions," the Russian diplomat noted. "Naturally, it would be logical to ask: if INSTEX was created to pay for goods not falling under the sanctions, then why was it needed? My European colleagues keep saying that this is just the beginning…"
There are provisions in the unilateral sanctions regime that allow other countries to trade in basic goods and pharmaceuticals with Iran.  
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.  
Two months later Iran created a corresponding entity for INSTEX, known as the Special Trade and Finance Institute (STFI). 
Fearing US wrath, the EU trade mechanism has so far failed to initiate trade with Iran as was expected by businesses in and outside Iran. 


Patience Running Out

But Iran may run out of patience after all, Chizhov admitted. "The Iranians have already given to understand that they may take certain steps and timed this statement to the first anniversary of the United States’ unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA). But these steps don’t go beyond the JCPOA and the announcement of the reciprocal measures fit into the deal so far," he stressed.
The JCPOA was signed between Iran and the six world powers (UK. Germany, China, Russia, the United States, and France) in July 2015. Under the deal, Iran agreed to curb its nuclear activities in exchange of abandonment of the sanctions imposed previously by the United Nations Security Council, the European Union and the United States over its nuclear program.
On May 8, 2018, the US unilaterally withdrew from the deal and imposed economic sanctions seeking to stop Iranian oil exports.

A year after the US departure, Iranian President Hassan Rouhani declared he was suspending some of Iran’s obligations under the JCPOA and gave a 60-day deadline to the five remaining signatories of the deal to comply with the terms of the agreement, including mainly banking and oil exports.

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