Iranian expert suggests reconsidering INSTEX's regulations
BAKU, Azerbaijan, May 20
By Elnur Baghishov - Trend
The regulations of the INSTEX financial mechanism created for financial exchanges between Iran and three European countries including Britain, France and Germany need to be seriously reconsidered, Iranian expert on energy issues Mehrdad Emadi told Trend.
According to Emadi, a corresponding legal basis must be created; otherwise, INSTEX will remain a positive, but small financial mechanism.
Emadi added that in this context, it will have a major negative impact on Iran's industrial needs, as modern industrial technologies are supplied to Iran from Europe.
The expert said that Iran creates virtual companies in Europe to trade with European states or creates companies in those countries through Turkey, UAE, Malaysia, Singapore, Greece, but financial exchanges remain small.
Emadi said that INSTEX is legally active, and even the US Department of the Treasury has accepted the limited operations of the INSTEX financial mechanism for essential needs with full financial transparency.
"Meanhwile, European companies refuse to work within INSTEX, because if a legal case is filed against companies like Siemens and Citroen and a fine is imposed, it is not clear which party will follow up on the non-payment of the fine and who will pay it," he said.
"A year ago, we could say that INSTEX will carry out a quarter of financial exchanges between Iran and the European Union. However, the United States has tightened sanctions against Iran to the maximum and has put pressure on the European countries, thus limiting their investments in, and trade cooperation with, Iran," Emadi said
The trade turnover between Iran and the European Union in 2017 amounted to $10.5 billion.
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.