Iranian Minister Describes INSTEX as Meager Move Only Making EU Immune against US' Pressures

TEHRAN (defapress)- Iranian Road and Urban Development Minister Mohammad Eslami underlined that the Instrument in Support of Trade Exchanges (INSTEX) with Iran will make the European countries immune against the US' pressures although it won't be a striking move in compliance with EU's undertakings under the nuclear deal.

News ID: 75340

Date: 01 February 2019 - 19:20

"By designing the INSTEX, Europeans are after making some of their firms immune against the US sanctions," Eslami said.

The Iranian minister reiterated that the mechanism is just aimed at preventing damage to those European companies which had relations with Iran or are eyeing to maintain their relations.

"Following the US withdrawal from Iran nuclear deal, the EU took stance against the move by undertaking projects to help preserve the international pact," Eslami added.

Yet, the minister stressed that the move has not developed any huge possibility for Iran.

By implementing the Blocking Statute, the EU companies’ compliance with the US foreign sanctions was annulled.

In a news meeting in Bucharest late Thursday, German, British and French foreign ministers officially announced the commissioning of the European special financial mechanism known as INSTEX.

In a relevant development on Thursday, Iranian Deputy Foreign Minister for Political Affairs Seyed Abbas Araqchi said that the EU-Iran payment vehicle INSTEX will at the beginning stages serve only to cover trade of medicine, food and medical devices, but will later be expanded to cover all sanctioned goods.

Iranian Deputy Foreign Minister Seyed Abbas Araqchi expressed hope the EU-Iran payment vehicle INSTEX is completed fully and is not deficient, saying "SPV launch is the first step for EU to fulfill its commitments under nuclear deal."

"Iran's all imports and exports will be put into this financial mechanism," Araqchi, who is now in Bulgaria, told IRIB Channel 1 yesterday.

Iran is also planned to establish a similar mechanism for this purpose in order to implement transactions in rial for Iranian sides, he added.

Araqchi underlined that the special purpose vehicle INSTEX creates a system for companies wishing to do business with Iran to make financial transactions through this mechanism.

He also stressed that this mechanism will provide us with full benefit if it is available to non-European countries or companies, as well, which is scheduled to be operated in the next phase, and in this case our international purchase system can be monitored under this mechanism.

As we know, he said, the Europeans have designed this mechanism in such a way that companies wishing to do business with Iran are not subject to US sanctions, while the United States' pressures remains.

"The United States has warned them previously of operating such a mechanism, but we hope the Europeans have considered all the details regarding how to deal with US sanctions," Araqchi noted.

"Americans have threatened to confront this mechanism, that's why it took long for Europeans to launch this mechanism, since they were trying to find solutions to prevent US sanctions from being operational," Araqchi reiterated.

Regarding some speculations that this mechanism is designed only to sell food, medicine and medical devices in Iran, it may be initially for this purpose, however, it will be expanded for sanctioned goods in the future, Araqchi said, adding special purpose vehicle INSTEX is basically for sanctioned goods.

In our view, Araqchi added, this is the first step for the European Union to fulfill its commitments under a nuclear deal between Tehran and major powers, and which were formulated in a statement issued in May 2018 between the foreign ministers of Iran and the three European countries (Germany, UK and France); "this is the first step that is taken by Europeans to open up a banking channel with Iran."

He expressed hope that this financial channel would be fully implemented covering all kinds of goods.

"The main purpose of this mechanism is to support companies that want to do business with Iran," said the deputy foreign minister, adding "how willing they are to get engaged in business depends on the mechanism being properly designed."

Araqchi said the plan and details will be announced later on the day, after EU foreign ministers meet in the Romanian capital, Bucharest, in an informal gathering.

In a related front, also on Thursday, Foreign Ministry Spokesman Bahram Qassemi said that the special financial mechanism for trade with Iran launched by the UK, France, and Germany is a first step which should be followed by quicker implementation of the EU's May 2018 undertakings.

Qassemi said that Tehran welcomes the EU’s announcement of its special financial mechanism for trade with Iran, but considers it as a first step that should be followed by quicker implementation of other commitments.

“The Islamic Republic of Iran believes the recent move by the European Union to register and announce its special financial mechanism (for trade) with Iran is Europe’s first step in fulfilling its obligations towards Iran as per a May 2018 statement by the foreign ministers of Iran and the three European countries,” Qassemi said in a statement.

He said Tehran welcomes the move, but at the same time calls for the full implementation of all EU obligations in the shortest time possible.

“Following the US withdrawal from JCPOA, despite political positions held by the EU about protecting the deal and the need for Iran to gain economic benefits and limited moves by the EU such as updating its blocking statute, unfortunately we have not seen tangible results and practical moves to Iran’s benefit,” he said.

"The EU’s move to create the special financial mechanism was carried out too late and the E3 and the EU must ensure that the move will compensate part of the illegal US sanctions," he said.

“The Islamic Republic of Iran is ready for continuing constructive engagement with the European Union and its member states based on respect and mutual interests,” he said.

“Meanwhile, considering the limited, incomplete and long overdue fulfillment of EU obligations outlined in the May 2018 statement, Iran believes the bloc must accelerate the move and the fulfillment of its other obligations to let the Iranian nation reap the economic benefits of JCPOA,” he said.

In a related front, also on Thursday, Foreign Minister Mohammad Javad Zarif said in a tweet, “Iran welcomes #INSTEX — a long overdue 1st step — in E3 implementation of May 2018 commitments to save JCPOA by ensuring dividends for Iranians after US’ illegal re-imposition of sanctions.”

His remark came after France, Germany and the United Kingdom on Thursday issued a joint statement on the creation of the INSTEX (the Instrument for Supporting Trade Exchanges), a Special Purpose Vehicle aimed at facilitating legitimate trade between European economic operators and Iran.

Zarif went on to stress that Iran remains “ready for constructive engagement with Europe on equal footing & with mutual respect.”

In a related front, earlier on January 27, Head of the Atomic Energy Organization of Iran (AEOI) Ali Akbar Salehi said Europeans, as the main beneficiaries of the agreement with Iran, should speed up efforts to materialize the Special Purpose Vehicle (SPV), warning that Tehran’s patience is wearing thin.

Iran's nuclear chief urged Europe to take necessary measures to accelerate the implementation of SPV before it becomes too late.

Speaking in an interview with the Islamic Republic News Agency (IRNA), Salehi commented on the current situation of cooperation between Iran, the Europeans, Russia and China about Iran's nuclear deal known as the Joint Comprehensive Plan of Action (JCPOA) and said, “It is unfortunate to say that lately the developments have not been very encouraging.”

He said Europe should take this as a message.

He further expressed hope, “Before it is too late, Europeans, in particular, should fulfill what they have promised beforehand, otherwise I am afraid that the future developments will not be conducive neither for us nor for them or even for other participants of the JCPOA.”

SPV, also known as the Special Purpose Vehicle, is a financial mechanism that the European Union has proposed to facilitate trade with Iran.

Elsewhere in the interview, Salehi went on to say that Iran does not want to see the deal disintegrated and breached by any of the present members.

He said though the US has already left the JCPOA, there are still other members who have stayed committed to the deal.

Salehi went on to reiterate in his interview that “Iran has been fulfilling its commitments regarding the deal and the 13 reports by the IAEA confirming the fact is a clear proof of this claim”.

“The International Atomic Energy Agency (IAEA) has confirmed this in its 13 consecutive reports, based on a robust verification system, proving that Iran is implementing its nuclear commitments. There is no credible peaceful alternative to the JCPOA,” the official added.

“The Europeans as the main beneficiary should think about the consequences of the decision, as Iran has so far fulfilled all its commitments under the JCPOA,” he said.

The top nuclear official noted that 'Iran’s patience is wearing thin and it is time for the EU to take its strategic decision. '

“But on the side of the Europeans, it's been months that they have promised us to come up with the SPV scheme which unfortunately has not yet been materialized,” Salehi added.

Iran's nuclear chief said, “I have heard in the recent news that hopefully by Monday they will probably announce the formation of the SPV.”

“I hope that they will take this step because this is an encouragement and will help keep the trust that we worked so hard to build between the two sides; otherwise, we will be losing the trust and once the trust is lost everybody will be a loser in the game.”

“So I say that this is a battle we should not lose,” he added.

“We should win this battle and we can only win it together. Otherwise, it will become a battle already lost and certainly this will not be in the interest of the Europeans specifically if we notice that they look at the JCPOA mainly from the perspective of security."

In a related front, earlier on December 12, Salehi warned that his country enjoys the capability to restore 20-percent uranium enrichment if the 2015 nuclear deal is discarded by parties still remaining under the agreement.

He said that under the 2015 nuclear deal, Iran accepted to put confidence-building curbs on its nuclear program, but they do not obstruct the “peaceful activities of Iran’s nuclear industry”.

“Enrichment is currently underway, but we would put aside the 300kg limit (set by the nuclear agreement) whenever we wish, and would do the enrichment at any volume and level,” he said in an interview with state TV on the sidelines of a visit to the Fordo nuclear facility.

“We currently have 1,044 centrifuges in Fordo, and if the establishment wants, we will restart 20-percent uranium enrichment in Fordo,” he noted.

He expressed hope that the remaining parties to the nuclear agreement would deliver on their promise and implement their commitments in order to fill the gap created by the US after its unilateral withdrawal from deal, officially known as the Joint Comprehensive Plan of Action (JCPOA).

Otherwise, he said, Iran will have to reduce its JCPOA commitments.

“I would like to warn that this is not a bluff; I have kept my word whenever I’ve said something. Now I’m emphasizing once again that if the establishment wants, we can easily return to the 20-percent enrichment, and meet the country’s needs at any level and volume,” he noted.

In relevant remarks in November, Salehi said that the European Union’s failure in providing the needed ground for Tehran to enjoy the economic benefits of the nuclear deal would exhaust Iran's patience, asserting that resuming uranium enrichment to 20% purity is one of Tehran's options in that case.

"Iran could resume enriching uranium to 20 percent purity--seen as well above the level suitable for fueling civilian power plants--if it fails to see the economic benefit of the 2015 deal that curbed its nuclear program," said Salehi, in an interview with a Western news outlet before his meeting with EU Foreign Policy Chief Federica Mogherini in Brussels.

"If we cannot sell our oil and we don’t enjoy financial transactions, then I don’t think keeping the deal will benefit us anymore,” he highlighted, adding, "I will pass certainly a word of caution to her (Mogherini): I think the period of patience for our people is getting more limited and limited. We are running out of the assumed timeline, which was in terms of months.”

Europeans' honesty in dealing with the Iran nuclear deal is seriously doubted by Iranian masses that are discontent with talks with European counterparts.

In contrast with what European politicians and government are stating, many experts in Iran are suspicious of Europe's genuine commitment to the letters of the nuclear agreement of July 14, 2015, and are voicing their discontent with what they describe as Europe's strategy of killing time.

Even some commentators like Seyed Mostafa Khoshchashm are calling the Iranian government to start meaningful modifications in JCPOA undertakings, and specially remove the cap on the country's enriched uranium stockpile after the US unilateral withdrawal from the agreement; a call which is gaining momentum among the Iranians.

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