March 25, 2023

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Iran hits back at European decision to liquidate INSTEX

TEHRAN – Iranian Foreign Ministry spokesman Nasser Kanaani has reacted to a European decision to dismantle a mechanism meant for facilitating trade with Iran despite U.S. sanctions. 

“Following the unilateral and illegal withdrawal of the United States from the Joint Comprehensive Plan of Action (JCPOA), the European governments had pledged to enable Iran to continue collecting the economic dividends from the JCPOA’s sanctions lifting obligations by adopting necessary solutions. One of the mechanisms that the Europeans put forward to fulfill this commitment was the establishment of INSTEX as a financial channel to facilitate trade between Iran and Europe,” Kanaani said, according to the Iranian foreign ministry. 

“Although the Islamic Republic of Iran never relied on the mechanism and did not pin any hope on it, it did not hesitate to offer any necessary cooperation, out of goodwill, for this channel to become operational,” he added.

“But unfortunately, the European governments, in addition to their inaction on their other obligations, also failed to effectively launch INSTEX and take the necessary measures to activate it under their JCPOA commitments,” Kanaani said.

The spokesman said the main reason for the failure of INSTEX – Instrument in Support of Trade Exchanges – was a lack of serious will on the part of the European governments, their inability to uphold their obligations with regards to compensating for the unilateral U.S. withdrawal from the JCPOA, and their support for the illegal American sanctions, as these countries did not inject any financial resources or long-term credit lines into this channel during the entire period of time INSTEX was active.

Kanaani emphasized once again that the Islamic Republic had not pinned any hope on INSTEX and conducted its international trade through other international financial and banking channels.

“Blaming Iran in the resolution on closing down INSTEX is a bogus attempt at covering up Europe’s absolute failure to be financially independent from America even at a minimum level.”

In early February, the Tehran Times reported that INSTEX was liquidated at the end of January this year after being dormant for a long period of time.

At some point, INSTEX was thought to be used for facilitating Iran’s oil sales and the flow of oil revenues into the country. Despite extensive talks in this regard, INSTEX proved ineffective.

The controversial history of INSTEX dates back to the heady days of 2019 when France, Germany, and the UK – collectively known as the E3-, were trying to rein in a Trump administration bent on dismantling the 2015 Iran nuclear deal through blanket economic sanctions that ran counter to the lofty promises envisioned in the terms of the JCPOA.

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