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Friday, Oct 30, 2020

Six European states joining alternative payment channel for Iran to skirt US sanctions

Six European states joining alternative payment channel for Iran to skirt US sanctions

Belgium, Denmark, Finland, the Netherlands, Norway and Sweden have agreed to support EU efforts to facilitate trade with sanctions-hit Iran as they announced their participation in the financial channel known as INSTEX.
The six states are “in the process of becoming shareholders of the Instrument in Support of Trade Exchanges (INSTEX) subject to completion of national procedures,” a short joint statement issued on Friday reads. However, it does not elaborate as to when the countries will implement the pledge.

INSTEX was established by France, Germany and the United Kingdom in January 2019 to save the landmark nuclear agreement with the Islamic Republic, officially called the Joint Comprehensive Plan of Action (JCPOA), after the US abandoned the deal. The trade channel is aimed at bypassing reinstated US sanctions against Iran and facilitating the legitimate business of EU companies with the country.

It took the alternative payment mechanism around six months to become operational, and the Islamic Republic has repeatedly pointed to a lack of support from EU nations to keep the nuclear deal alive. It even compared INSTEX with a “beautiful car without fuel.”

Unsatisfied with the efforts of the EU signatories, Tehran, which initially was in full compliance with the agreement, has begun gradually scaling back its nuclear commitments under the JCPOA despite Brussels’ calls for continued adherence. In one of its latest moves in response to Washington’s unilateral withdrawal from the deal, Iran has reportedly started enriching uranium to five percent at its Fordow nuclear facility.
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