Despite the economic crisis, the mullahs cling to INSTEX

Islam Mohamed

German Foreign Ministry spokeswoman Maria Adebahr confirmed her country’s commitment to cooperate with Britain and France to maintain the nuclear agreement with Tehran, stressing that negotiations with Iran continue in order to activate the financial mechanism INSTEX.

Adebahr deemed the reason for the delay in activating the financial mechanism INSTEX is due to the complexities of the US embargo, as well as some of the expectations put forward by Tehran.

“As you know INSTEX also needs a mirror structure in Iran, which must be realized by the Iranian side,” she said.

She added that the mechanisms in Iran and Europe should ensure international standards, stressing that Germany will continue to negotiate with Iran in this regard.

Adebahr also reiterated Germany’s commitment to the nuclear agreement and called for the continued full implementation of the agreement by Iran.

The statement came two days after Iranian President Hassan Rouhani announced that some of the nuclear agreement’s commitments had been suspended because of Europe’s failure to implement its commitments, setting a 60-day deadline for implementing the commitments.

On January 31, Germany, France and Britain launched the financial mechanism known as INSTEX to deal with non-dollar currencies in order to help European companies avoid US sanctions on Iran.

“We are looking for ways to reach this mechanism, because we are fully convinced that it serves our strategic security interests in Europe,” German Foreign Minister Heiko Maas said, adding, “We do not want Iran to come out of this agreement and return to uranium enrichment. This concerns our security interests in Europe.”

Iran has two key demands from Europe: activating INSTEX to overcome the financial embargo and continuing trade with Iran.

But the Europeans have stipulated that Iran must implement several demands before INSTEX is operational, such as stopping its missile development and testing program and stopping its support for terrorism and assassinations of opponents in Europe. They also want Iran to join the FATF treaty, but hardliners in Iran’s Expediency Council and Guardian Council are blocking its approval.

What is INSTEX?

INSTEX is a legal trade mechanism with official support from the European Union that does not deal with the US dollar.

Iran can sell humanitarian goods, such as food, medicine and medical equipment, although Washington has not banned the goods, but fear of sanctions has led companies and banks to refrain from dealing with Tehran in general.

Iranian President Hassan Rouhani had warned Europe that “Iran is preventing the influx of refugees into Europe and is fighting drugs and terrorism. These measures cost billions of dollars, and we cannot pay those costs under conditions created by the United States and without a nuclear agreement.”

On May 8, 2018, the United States announced its withdrawal from the nuclear deal with Iran and the restoration of all sanctions against the mullah regime, and it is now aiming to bring Iran’s oil exports to zero.