Jul 6, 2019, 7:42 PM
Journalist ID: 1853
News Code: 83383983
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INSTEX, a minor step by Europeans to fulfill their big promise

Tehran, July 6, IRNA - Iran's 60-day moratorium for Europeans to fulfill their obligations in the face of the US’ withdraw from the JCPOA has not yet come to half way when Germany, France and Britain, launched INSTEX financial system with a multi-million euro credit and the first financial transaction was carried out to fulfill their promises.

Instrument in Support of Trade Exchanges (INSTEX) was a promise made by Europeans over the past 14 months to prevent Iran to leave the nuclear deal.

The European Union has agreed to compensate for Americans’ broken promises after leaving the JCPOAl, in the wake of the country's obstructions and the imposition of severe anti-Iran sanctions. Hence the EU made promise to launch a special financial channel to circumvent the sanctions. It took about 14 months to launch the INSTEX for export of European goods to Iran.

Still, the details of the operation of the INSTEX have not been determined, but it seems that its most important mission is to ship goods, including food and medicine, to Iran. Officials in our country believe that INSTEX is a step forward to Europe's obligations which it is not sufficient. 

Some observers also say that Europe should transparently buy Iran's oil for export of these goods to our country. On the other hand, the channel must have the capabilities of a financial channel in the true sense and open the way for economic and financial relations.

Critics believe that in this mechanism, expanded possibilities have not been envisioned for Iran, and the only goal is that companies that work with Iran will not be harmed.

Also, all European goods shipped to Iran will be subject to US approval. Of course, there are some who believe that these are the preconditions for fulfilling more European commitments, and complementary programs can draw Iran's attention and provide a solution to some of Iran's problems due to sanctions. In this situation, economic activists should use any privilege.

No opportunity, privilege should be lost

Majid Reza Hariri, the economic activist and vice president of the Chamber of Iran and China in an interview with the Islamic Republic News Agency (IRNA), said there is no doubt that INSTEX creates some opportunities for our country, ”Although news about the launch of this system has been released, its mechanism has not yet been finalized, and it is not possible to definitely comment on advantages or disadvantages of INSTEX”.

The expert highlighted that Iran's economy is under mounting pressure due to political conditions and the non-economic streams are the root cause of the current conditions, so any privilege that is in the interest of Iran is a step forward and should be heeded, he said. 

The root cause of these problems is political issues that are presented in the context of the economy, he said adding that in this field any concessions, although not feasible,  will be in the best interest of our country.

These solutions work within the framework of the sanctions while its philosophy of existence should be within the framework of the JCPOA and our request from the European Union is to implement its commitments within the JCPOA, Hariri said. 

Hariri emphasized that countries that are committed to the JCPOA and urge Iran to remain committed to the nuclear deal must carry out all their official deals with Iran in the framework of the JCPOA.

INSTEX underlines that the source of the purchase of goods from Europe should be specified accurately. Iran should sell oil or non-oil commodities to Europe through opening a credit line, he said. 

He also underscored that the INSTEX liquidity mechanism has not yet been determined, saying that, in exchange for receiving European goods, these countries must either buy oil from Iran or create a credit line which is still unclear.

He also expressed concerns over increase of Iran's foreign debt in the event of the opening of a credit line to buy goods from Europe, “Under such situation, borrowing of currencies or sale of goods will be in the interest of our country.  The fact is that Iran suffers shortage of resources in this situation and we cannot use our wealth because buyers cannot pay for Iran's oil. 

According to officials, though, INSTEX can be considered as the first step by Europeans to win Iran's trust, but failed to meet Iran's requirements to reduce the impacts of violating the JCPOA, hence Iran is determined to implement its second pledge of reducing its commitment.

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