Defying US, European parties to JCPOA launch payment channel with Iran

The European signatories to the 2015 Iran deal formally announce the launch of a long-awaited direct payment mechanism meant to safeguard their trade ties with Tehran in the face of the “toughest ever” American sanctions.

Following months-long preparations, foreign ministers of France, Germany and Britain finally unveiled the mechanism — officially called the Instrument in Support of Trade Exchanges (INSTEX) — on Thursday following a summit in Bucharest.

“France, Germany and the United Kingdom, in accordance with their resolute commitment and continued efforts to preserve the Joint Comprehensive Plan of Action (JCPOA) endorsed by United Nations Security Council resolution 2231, announce the creation of INSTEX SAS (Instrument for Supporting Trade Exchanges), a Special Purpose Vehicle (SPV) aimed at facilitating legitimate trade between European economic operators and Iran,” the three foreign ministers said in a joint statement,” they said in a joint statement.

They also underlined their commitment “to pursue the further development of INSTEX with interested European countries to make this instrument in support of trade exchanges with Iran operational by following the steps set out above.”

Iran will also need “to create an effective and transparent corresponding entity that is required to be able to operationalise” the mechanism,” it added.

France, Germany and the UK are the initial shareholders of the INSTEX mechanism for trade with Iran, which has been registered in the French capital, Paris, with a capital of 3,000 euros, and will be governed by a German banking expert, according to AFP and German media.

INSTEX is designed to pave the way for European firms to do business with Iran while evading the strict sanctions the US re-imposed against Iran last year after leaving the 2015 multinational nuclear deal, formally called the Joint Comprehensive Plan of Action (JCPOA).