Iran
Iranian workers setting up a makeshift hospital inside the Iran Mall, northwest of Tehran on March 21, 2020. Photo: AFP
ERBIL, Kurdistan - Several European countries have coordinated the export of medical goods to Iran, marking the first completed transaction of a trade mechanism aimed at salvaging the nuclear agreement after Washington unilaterally withdrew from the accord.
“France, Germany and the United Kingdom confirm that INSTEX [Instrument in Support of Trade Exchanges] has successfully concluded its first transaction, facilitating the export of medical goods from Europe to Iran. INSTEX and its Iranian counterpart STFI will work on more transactions and enhancing the mechanism,” read a statement released by the German Foreign Office Tuesday.
INSTEX was designed by European governments to avoid direct transactions in US dollars that would violate US sanctions on dealings with Tehran.
"INSTEX aims to provide a sustainable, long-term solution for legitimate trade between Europe and Iran as part of the continued efforts to preserve the JCPOA [Joint Comprehensive Plan of Action]," added the UK’s Foreign & Commonwealth Office in a statement published to their website.
Relations between Washington and Tehran have deteriorated since May 2018, when US President Donald Trump withdrew from the landmark 2015 JCPOA nuclear deal and reimposed harsh economic sanctions on Iran. The Iranian people have experienced mass unemployment, severe currency devaluation, and shortages of essential medicines as a result.
Many Iran analysts have welcomed the news of INSTEX’s onset.
Ellie Geranmayeh, a senior policy fellow at the European Council on Foreign relations, said that the move has come at a “critical time” as Iran fights the spread of coronavirus.
Important step by E3-while #Instex taken longer than expected, 1st transaction comes at critical time, providing hope that humanitarian trade with #Iran can increase during #COVID-19 battle with potential to save lives of ordinary Iranians. US should take similar measures. https://t.co/p2oG6ggycf
— Ellie Geranmayeh (@EllieGeranmayeh) March 31, 2020
Iran has been the country hardest-hit by the coronavirus pandemic in the region.
As of Tuesday midday, 2,898 people have died after contracting COVID-19, with 44,606 confirmed cases across Iran, according to Kianoush Jahanpour, spokesperson for the Ministry of Health.
Despite the establishment of INSTEX and statements of support for Iran’s reintegration into the global economy by European governments, most European banks and businesses have already cut ties with the increasingly isolated nation.
The Financial Action Task Force (FATF), an intergovernmental organization responsible for developing international standards for combating money laundering and terrorism financing, decided February to blacklist Iran for missing the deadline to fully apply two international conventions combating money laundering and terrorism financing.
Iran's blacklisting places its financial transactions under further scrutiny, potentially cutting it off from the last remaining foreign banks and businesses it has dealings with.
Esfandyar Batmanghelidj, founder of an organization that promotes "business diplomacy" between the international community and Iran, predicted that the FATF blacklisting would not impact European governments from complying with INSTEX.
“European officials do not expect the FATF decision to interfere with the operationalization of INSTEX, the mechanism established to support European trade with Iran, given the longstanding policies of the banks on which INSTEX will rely,” he wrote in a post for the Quincy Institute in February.
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