Britain, France, and Germany initiated a trade mechanism that will allow them to bypass US sanctions on Tehran. The European Union is hopeful that the special system will keep the nuclear deal in place despite the opposition from Washington. The three European member states launched the mechanism in Bucharest. “It is a political act,” French Foreign Minister Jean-Yves Le Drian commented. “It is a gesture to protect European companies.” Tehran embraced the move while Washington said that the new device would not have any impact on America’s own initiatives against the rouge state.
The new system is called INSTEX – Instrument in Support of Trade Exchanges – and it is an outcome of the cooperation between the biggest EU members – Britain, France, and Germany – who were also signatories of the nuclear deal with Tehran. “INSTEX will support legitimate European trade with Iran, focusing initially on the sectors most essential to the Iranian population – such as pharmaceutical, medical devices and agri-food goods,” the foreign ministers of the three countries stated. In the long run, INSTEX will be open to third countries wanting to do business with Iran.
Iranian deputy foreign minister Abbas Araghchi embraced the device as “the first step within the set of commitments the Europeans have made to Iran” but said that for the system to be valuable, the device must allow trading of sanctioned goods. The system is not yet operational, as Tehran will need to set up its own tool that will run parallel with the European INSTEX. The tool targets small and medium-sized enterprises, thus sending a message to Tehran about the bloc’s commitment to the nuclear deal.