By Pooya Stone
Iranian Foreign Minister Mohammed Javad Zarif has threatened Europe on Sunday that Iran will not wait “forever” for the special financial mechanism that is designed to help Iran evade US sanctions.
He told reporters in Tehran: “I wonder how much time do the Europeans need [to set up] a preliminary mechanism?”
He claimed that Iran launched its part of the mechanism – the Special Trade and Finance Institute (STFI) – last month and that Iran’s neighbours have been using similar trading structures that have proven effective.
He then complained that Europe had “no excuse” for delaying any further the launch of the Instrument in Support of Trade Exchange (INSTEX), claimed that Europe is “lagging behind” in its commitments under the 2015 nuclear deal and threatened that the European Union shouldn’t think that Iran will simply “continue to wait for them”.
After the US withdrew from the nuclear deal in May 2018, Europe remained a party to it and even created INSTEX to ensure Iran was able to continue trading despite US sanctions. The idea was that trade would take place in Euros, thus avoiding the US dollar, which Iran is banned from using, and would bypass the SWIFT international payments system.
However, INSTEX has not yet been implemented, largely because Europe require Iran to pass some bills, required by financial transparency body the Financial Action Task Force (FATF), to reduce money laundering and terrorism financing. Iran has failed to, despite various extensions granted by FATF.
Another reason that INSTEX has not been implemented is that it took so long to find a nation willing to host it and people willing to run it, knowing that they would likely be targeted by US sanctions. The US constantly called on Europe to leave the nuclear deal and not “break up” US sanctions.
Vice-President Mike Pence in February called INSTEX an “ill-advised step” which would only “strengthen Iran, weaken the EU, and create still more distance between Europe and the United States”.
While analysts agreed that INSTEX would be useless because:
• European companies are too afraid of US sanctions and losing access to the US market to trade with Iran
• INSTEX only allows Iran to purchase “humanitarian goods,” such as food and medical supplies, which are not subject to US sanctions
Given all this, it seems clear that Europe needs to stop appeasing the mullahs and end its INSTEX programme because the Regime is incapable of reform and should not be sustained.