Iran Envoy Slams EU Condition for Implementing INSTEX

“Europe has no right to set conditions for implementing the new financial channel,” Hamid Baeidinejad said in a post on his Twitter account on Sunday, commenting on INSTEX (Instrument in Support of Trade Exchanges), a payment channel that the three EU signatories to the 2015 Iran nuclear deal (France, Germany and Britain) set up last week to help continue trade with Tehran and bypass the US sanctions.

The ambassador underlined that formation of INSTEX is part of the EU commitments under the Joint Comprehensive Plan of Action (JCPOA) that has been carried out with delay.

Baeidinejad noted, though, that the EU3 joint statement has not defined Iran’s accession to FATF as a necessary condition for the implementation of INSTEX, but as “an expectation” from Iran, which he linked to the role of banking systems in the process of payment to Iran.

The ambassador cited a clause of the joint statement by the foreign ministers of France, Germany and the UK, which stipulates, “INSTEX will function under the highest international standards with regards to anti-money laundering, combating the financing of terrorism (AML/CFT) and EU and UN sanctions compliance. In this respect, the E3 expect Iran to swiftly implement all elements of its FATF action plan.”

INSTEX will be based in Paris and be managed by a German banking expert. Britain will head the supervisory board.

The European countries are reportedly going to use the channel initially only to sell food, medicine and medical devices in Iran.

In May 2018, the US president pulled his country out of the JCPOA, the nuclear deal that was achieved in Vienna in 2015 after years of negotiations among Iran and the Group 5+1 (Russia, China, the US, Britain, France and Germany).

Following the US exit, Iran and the remaining parties launched talks to save the accord.