France: Europe trade channel close to first deal in days
A German Foreign Ministry spokesman said on Friday his country is working hard to reach the point where the first transactions can be carried out under a special trade channel being set up to enable trade between Iran and European exporters.
Spokesman Rainer Breul said European industry had a great interest in the system being brought online, which will make it possible for trade between EU members and Iran to continue despite stiff US sanctions in place since Washington quit a 2015 nuclear accord between Tehran and world powers last year.
Set up by France, Britain and Germany, INSTEX is a barter trade mechanism that aims to avoid direct financial transfers by offsetting balances between importers and exporters on the European side.
First INSTEX deal
French Finance Minister Bruno Le Maire also said on Thursday he hoped the special trade channel would complete a first, limited transaction in the coming days.
“We want INSTEX to enter into force in a few days, and I hope that we will be able to operate in a few days. I hope the first transaction will be completed in a few days,” Le Maire told journalists at a meeting in Poland.
“The first transaction will be a limited one, but this is a starting point and we expect INSTEX to be an efficient tool,” Le Maire added.
Iran has said it wants to keep the nuclear deal alive but must receive promised economic benefits. On Monday, it said it had cross the limit set in the deal for the storing low-enriched uranium, its first major reduction of its commitments to the nuclear pact, and it has said it will announce further measures on July 7.
France’s Foreign Ministry said on Wednesday that INSTEX would become operational based on Iran’s “full compliance with its JCPOA (Iran deal) commitments.”
“We aren’t going to press the yes button if there are doubts about its compliance,” one European diplomat said.
Two other European diplomats said that while possible transactions had been identified, it was too early to move ahead as due diligence was still underway and that as of yet the Iranian side had still to complete a mirror company that would facilitate the process.
However, the Europeans have created an advanced payment system that could enable some small transactions soon.
The system, as Europe says, initially will only deal in products such as pharmaceuticals and foods, which are not subject to US sanctions.
Iranian officials have repeatedly said INSTEX must include oil sales or provide substantial credit facilities for it to be beneficial.
Dispute tool an option
A European diplomatic official also said that talks at all levels with Iran are in progress but if nothing changes, they could decide to trigger a dispute resolution mechanism in the 2015 nuclear accord that could ultimately result in the reimposition of sanctions.
The official said on Thursday that talks with Iran are aimed at de-escalating dangerously rising tensions, and buying time toward unwinding the crisis.
The official insisted there’s still room to work to de-escalate even though Iran scaled back its nuclear obligations
The official said the dispute resolution mechanism, which entails a progression of talks, could be triggered “maybe sooner, maybe later.” If nothing changes, “I don’t know how we can avoid it.”
Reuters and AP contributed to this story.