Energy expert: European companies to gradually enter into trade with Iran

Business Materials 31 March 2020 19:44 (UTC +04:00)
Energy expert: European companies to gradually enter into trade with Iran

BAKU, Azerbaijan, March 31

By Elnur Baghishov - Trend:

Companies from 11 EU member states will gradually enter into trade with Iran, Iranian expert on energy issues Mehrdad Emadi told Trend.

According to Emadi, the first trade with Iran within the INSTEX financial mechanism made it possible.

The Instrument in Support of Trade Exchanges is a European special-purpose vehicle established in January 2019. Its mission is to facilitate non-USD transactions and non-SWIFT to avoid breaking U.S. sanctions. European nations have exported medical supplies to Iran as part of a mechanism set up to circumvent US sanctions on Tehran. The two sides have struggled over the past year to establish the INSTEX barter system.

Emadi said that this is the first time that this financial mechanism has been used today, and it is very important step.

"It is planned to use this mechanism twice more. The mechanism will be used after the settlement of banking issues," he said.

In January 2016, JCPOA was launched between Iran and the P5+1 group (US, Russia, China, UK, France and Germany) in connection with Iran's nuclear program. In May 2018, the US announced its withdrawal from the deal and imposed sanctions against Iran in November of the same year.

In order to preserve the agreements reached as part of the JCPOA, the European signatories of the deal stated in January 2019 that a financial mechanism for maintaining trade with Iran called INSTEX was formed.

On May 8, 2019, Iran announced that it had ceased fulfilling its commitments regarding the sale of over 300 kilograms of uranium, as stated in the deal, basing its decision on the other signatories having not fulfilled their obligations. On July 7, Iran announced that it will not be fulfilling its commitments regarding the enrichment of uranium at 3.67 percent and the reconstruction of the Arak Heavy Water Reactor Facility as stated in the deal.

On Sept. 5, Iran announced that it will enrich uranium using next-generation centrifuges and will not mix it with the enriched uranium residues as part of the third step of reducing commitments in JCPOA.

On Nov. 5, 2019, Iran announced that it took the fourth step in connection with reducing its commitments to the nuclear agreement. So, uranium gas is being pumped to the centrifuges at the Fordow Fuel Enrichment Plant.

Iran took the last fifth step in reducing the number of its commitments within JCPOA. Iran no longer faces any restrictions on its nuclear program.