Iran talks INSTEX’s major agreements with foreign partners
BAKU, Azerbaijan, May 13
By Elnur Baghishov - Trend
The Instrument in Support of Trade Exchanges (INSTEX), which is aimed at ensuring Iran’s trade with European countries, cannot operate for large financial exchanges and agreements at present, Iranian expert on energy issues Mehrdad Emadi told Trend.
According to Emadi, three European countries (UK, France and Germany) have created an INSTEX financial mechanism and also made commitments on the transparency of its activities.
Emadi said that however, the United States Department of the Treasury is putting direct pressure on large EU companies and will impose heavy fines as part of sanctions against Iran in this regard.
The Iranian expert said that therefore, large European companies are unable to establish trade relations with Iran. For example, the $3 billion contract of the French company Total with Iran cannot be implemented with INSTEX.
Emadi added that the INSTEX financial mechanism has been established for more than a year and has been active for the last 65 days.
"The purpose of the INSTEX financial mechanism is to pay for products purchased by Iran from EU member states and increase trade and mutual investment between Iran and the EU," he said.
The expert said that currently, the activities within this financial mechanism are mainly based on small companies and small financial exchanges.
According to the expert, in order to increase trade between Iran and the European Union, especially with France, either US sanctions against Iran must be lifted or the United States must return to the Joint Comprehensive Plan of Action (JCPOA).
At present, it is unlikely that the US will lift sanctions against Iran or return to this agreement," 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.
The US imposed new sanctions on Iran in November 2018. Over the past period, the sanctions affected Iranian oil exports, more than 700 banks, companies and individuals.