TEHRAN (Press Shia) – An Iranian deputy foreign minister said INSTEX – a payment channel that three European states set up on Thursday to help continue trade with Tehran and circumvent US sanctions – is going to involve non-European countries and companies as well in the next step.
In an interview with Iran’s state TV on Thursday, Deputy Foreign Minister Abbas Araqchi, who is in Bulgaria as part of a European tour, provided a description of the INSTEX (Instrument in Support of Trade Exchanges).
He said the INSTEX is the long-awaited Special Purpose Vehicle (SPV) that Europe has been working on for months to create a financial mechanism to maintain trade with Iran.
“The purpose of this mechanism is to bring the whole payments between Iran and Europe and all of our exports and imports into this financial mechanism, through which the (trade) exchanges of the two sides would take place,” Araqchi noted, adding that a same mechanism is planned to be formed inside Iran in order to organize the rial-based exchanges for the Iranian businesses.
The senior diplomat underlined that the newly-established mechanism will fully serve Iran’s interests when “the non-European countries or companies could also have access to it”, saying the next step would apparently enable the non-Europeans to use the channel.
“In that case, the set of our international purchases could be carried out under this mechanism,” he noted.
Asked about how INSTEX would exactly work, Araqchi said the payment channel’s function will be determined during expert meetings between Iran and Europe, noting, “Our Central Bank should enter talks with the mechanism and define how the job would be done.”
He further dismissed the notion that the mechanism would uphold only the businesses that are not sanctioned by the US, stressing that the channel has been basically designed to cover the sanctioned items.
“We hope this financial channel would be carried out completely, not be defective, and would involve all commodities,” Araqchi stated.
INSTEX, set up by France, Germany and the UK (the three European parties to the 2015 Iran nuclear deal) will be based in Paris and be managed by a German banking expert. Britain will head the supervisory board.
Europeans are reportedly going to use the channel initially only to sell food, medicine and medical devices in Iran.
In May 2018, the US president pulled his country out of the JCPOA, the nuclear deal that was achieved in Vienna in 2015 after years of negotiations among Iran and the Group 5+1 (Russia, China, the US, Britain, France and Germany).
Following the US exit, Iran and the remaining parties launched talks to save the accord.