ERBIL, Kurdistan Region – Six major European countries announced on Friday that they would join a special trade exchange designed to alleviate the impact of the US sanctions on Iran.
Belgium, Denmark, Finland, the Netherlands, Norway, and Sweden will all join INSTEX, a trade mechanism that allows Iranian and European companies to circumvent severe US sanctions against Iran.
The six European countries made a joint statement announcing their decision to become shareholders in the exchange and stressed their commitment to the Joint Comprehensive Plan of Action (JCPOA), the nuclear nonproliferation agreement reached with Iran in 2015. The statement comes ahead of talks between all parties of the JCPOA, due to be held in Vienna next Wednesday.
The JCPOA was originally brokered by US president Barack Obama, and signed by Iran, China, France, Germany, Russia, UK, US, Germany, and the EU.
The deal demanded that Iran make major concessions in its nuclear enrichment program, forfeit a stockpile of highly enriched uranium and allow International Atomic Energy Agency (IAEA) inspectors unprecedented access to its nuclear facilities to ensure compliance. In exchange, Iran was offered relief for longstanding economic sanctions and the ability to trade with the rest of the international community.
Despite a general global consensus that the JCPOA was a positive step towards nonproliferation and global stability, US President Donald Trump unilaterally withdrew the US from the agreement and reimposed harsh sanctions on Iran in 2018.
In response, Germany, France and the UK created the Instrument in Support of Trade Exchange (INSTEX). Designed to allow bilateral trade between Iranian and European countries, it circumvents US sanctions by avoiding direct transactions in US dollars.
INSTEX has been slow to roll out and limited in scope as its creators carefully navigate complex financial regulations, and Iran has begun to reverse its JCPOA commitments as it feels the bite of the renewed sanctions.
While in Beijing to discuss next week's meeting in Vienna, Abbas Araghchi, the political deputy at Iran's Ministry of Foreign Affairs said, "The JCPOA is not in a good state, because the remaining members of the deal have not delivered on the commitments they made after the United States left. The Islamic Republic of Iran is not receiving the benefits of the JCPOA."
Today's joint statement by the six new INSTEX shareholders aims to address some of Iran's concerns, alleviate the economic impact of strict US sanctions, and preserve the fragile nuclear agreement. Norwegian ambassador to Iran Lars Nordrum tweeted, "we are joining INSTEX together with the E3 [UK, France, and Germany] to facilitate trade with Iran and help preserve the JCPOA."
Araghchi responded to the news positively from Beijing, stating, "We hope that the joining of these countries to the trade exchange will give INSTEX new energy and make it more operational."
In contrast, American ambassador to Germany Richard Allen Grenell blasted the announcement in a response to ambassador Nordrum on Twitter, saying, "Terrible timing - why fund the Iranian regime while its [sic] killing the Iranian people and shutting off the internet? You should be standing for human rights not funding the abusers."
The Iranian government has cut off internet access and violently suppressed widespread protests over the past two weeks. Amnesty International has reported that over 100 protesters have been killed as the government uses "excessive and lethal force to crush largely peaceful protests."
However, the widespread protests, sparked by austerity measures including a 300% increase in gasoline prices, reflect an increasing economic desperation among Iran's civilian population. Iranian citizens have suffered under the weight of sanctions imposed by the US, even as Tehran honored its commitments to the JCPOA for over two years.
In response to this international and domestic pressure, Iran has taken four major steps to reduce its JCPOA commitments, all of which were announced in advance and implemented at 60 day intervals. Most recently, Iran resumed uranium enrichment in over 1000 centrifuges at Fordow nuclear facility in Qom.
Ali Akbar Salehi, the head of the Atomic Energy Organization of Iran, said on Saturday that Iran is currently enriching 5500g of uranium per day. Enrichment is moving towards 6000g per day, he added - which would bring daily enrichment levels back to pre-2015 nuclear deal levels.
Set against tension between the US and its European allies, increased European participation in the INSTEX mechanism, and the reality of Iran's decreasing stability and increasing uranium enrichment, next week's meeting in Vienna is critical to the continued survival of the JCPOA agreement.
The six new INSTEX shareholders stated, "In light of the ongoing European support for the agreement and the ongoing efforts to implement the economic part of it and to facilitate legitimate trade between Europe and Iran... it is crucial for the Islamic Republic of Iran to return without delay to full compliance with the terms and provisions of the nuclear agreement."
