European Union launches sanctions-busting Iran payment vehicle

Britain, France and Germany launch a trade mechanism to bypass US sanctions on Iran.

The three countries — the European signatories to the 2015 deal that curbed Tehran’s nuclear ambitions in return for sanctions relief — launch the device, which has been in preparation for months, at a meeting of EU foreign ministers in Bucharest.

Iran cautiously welcomes the news as a “first step,” but US officials dismiss the idea that the new entity will have any impact on efforts to exert economic pressure on Tehran, and fire a fresh warning at anyone thinking of trading with the Islamic Republic.

While the new institution, called INSTEX — short for Instrument in Support of Trade Exchanges — is a project of the three governments, it will receive the formal endorsement of all 28 EU members.

The company was registered in Paris on Tuesday with an initial 3,000 euros in capital and a supervisory board with members from France and Germany, and chaired by a Briton.

“INSTEX will support legitimate European trade with Iran, focusing initially on the sectors most essential to the Iranian population — such as pharmaceutical, medical devices and agri-food goods,” the foreign ministers of Britain, Germany and France — Jeremy Hunt, Heiko Maas and Jean-Yves Le Drian — say in a joint statement.

In the longer term, INSTEX aims to be open to third countries wanting to trade with Iran, the statement says — an ambition unlikely to please Washington.

— AFP