Europe Must Extend INSTEX to Oil, Withstand US Meddling

Europe should not let the United States hamper its efforts to protect trade with Iran through INSTEX, Foreign Minister Mohammad Javad Zarif said on Wednesday, reiterating Tehran's demand that the payment system must include oil sales.
"INSTEX has not been fully launched and even if it becomes operational, it must cover oil exports and should not become a tool for implementing US orders," he told reporters after a Cabinet meeting in Tehran, IRNA reported. 
The Instrument in Support of Trade Exchanges was created by European countries to save the 2015 Iran nuclear deal with world powers after the United States pulled out last year and reimposed sanctions on the Islamic Republic.
The mechanism would initially only deal in products such as pharmaceuticals and foods, which are not subject to US sanctions. Iranian officials have repeatedly said it must include oil sales or provide substantial credit facilities for it to be beneficial. 
"It should not be the case that America tells Europe what INSTEX can do," Zarif said. "INSTEX should be considered a European measure and the Europeans should have the courage to act based on their obligations, not US wishes." 
American officials have warned European nations that they risk falling foul of sanctions if they press ahead with the financial instrument, saying that extending it to oil would undermine Washington's strategy of "maximum pressure" against Iran. 
A senior American official recently told the Washington Examiner that the US Treasury Department wrote to the board of INSTEX and "communicated exactly our displeasure at the creation of an instrument that, on its face, seems to foster the evasion of sanctions and the danger associated with that and reminded them what was and was not sanctionable."
 

Next Nuclear Step 

Zarif noted that Iran will further reduce its commitments under the nuclear accord unless the European signatories, namely Britain, France and Germany, move to protect it from US sanctions by ensuring it can sell oil and collect the revenue as part of their obligations. 
"Participants in the Joint Commission once again reiterated their commitment to honor their obligations. We should wait and see how they are going to do so. But under the current circumstances and if no action is taken by [Europe], the Islamic Republic will definitely take the third step," the top Iranian diplomat said, referring to an emergency meeting of the deal's co-signatories in Vienna, Austria, on July 28.
Tehran has vowed to keep reducing its commitments every 60 days unless Europe upholds its side of the deal. It has so far surpassed the limits set on the size of its stockpiles of enriched uranium and heavy water, and exceeded the maximum uranium enrichment level it had agreed to.
Zarif said the current tensions and problems are rooted in "America's economic terrorism and Europe's inability to fulfill its commitments, which means going along with America's economic terrorism."