Tehran will not wait forever for the European nations to launch the promised payments mechanism aimed at avoiding the US sanctions against the Islamic Republic, Iran’s Foreign Minister Mohammed Javad Zarif has warned.
Ever since Washington unilaterally withdrew from the 2015 Iranian nuclear deal, the European parties to the agreement – the UK, France, and Germany – have been considering the idea of a special payment channel with Iran, which would allow them to bypass re-imposed US sanctions. However, it seems that the Europeans did not make great strides on this path, sparking discontent in Iran, which did not only stick to its part of the 2015 accord but also created its part of the mechanism months ago.
On Sunday, Iran’s top diplomat complained about a prolonged delay in the launch of the European non-dollar direct payment channel with Tehran called the Instrument in Support of Trade Exchange (INSTEX).
“I wonder how much time do the Europeans need [to set up] a preliminary mechanism?” Zarif rhetorically asked as he spoke to journalists in Tehran. He also stated that the Europeans have “no excuse” for delaying the launch of the mechanism any further.
Iran’s European partners are “lagging behind” in fulfilling their commitments under the agreement they struck with Tehran, Zarif complained, adding that London, Paris and Berlin “should not believe” that the Islamic Republic would simply “continue to wait for them.”
The foreign minister also noted that Iran has launched its part of the mechanism called the Special Trade and Finance Institute (STFI) last month and praised the efforts of Iran’s neighbors, which introduced similar trading structures, which, according to Zarif, have proven to be effective.
In fact, Germany, France, and the UK announced setting up the INSTEX as early as in January. At that time, it was said that the structure was registered in France and was expected to be headed by German banker Per Fischer, a former Commerzbank director.
At the initial stage, the mechanism would have facilitated trade between the companies of the three nations and Iran by bypassing the SWIFT international payments system and focus on high-priority “humanitarian goods,” such as food and medical supplies. London, Paris, and Berlin also hoped that other European nations could join the mechanism in the future.
The move did not sit well with Washington, which doubled down on its calls on Europe to leave the Iranian nuclear deal and warned the Europeans against creating any “mechanisms to break up our sanctions.” In February, the US Vice-President Mike Pence called the establishment of INSTEX an “ill-advised step” which would only “strengthen Iran, weaken the EU, and create still more distance between Europe and the United States.”
Earlier, some analysts warned that the created mechanism would be in fact useless because the European companies would still fear repercussions from the US over their trade with Iran. Those would certainly be unwilling to lose the US market if slapped with sanctions over their dealings with the Islamic Republic.