Iran Nuclear NewsEU's SPV for Iran: Failed Already?

EU’s SPV for Iran: Failed Already?


EU's SPV for Iran: Failed Already?

By Jubin Katiraie

The EU announced the establishment of a special purpose vehicle (SPV) to handle trade between EU countries and the Iranian regime on January 31, but this received significantly less positive media attention than some of its defenders would have liked. In fact, many in the media questioned why INSTEX was even created and what good it would do. This is far from the miracle cure that Iran was hoping for and more akin to putting a band-aid on a bullet hole.

Why was INSTEX created?

Following the US withdrawal from the 2015 nuclear agreement in May 2018, and the subsequent reimposition of sanctions, the EU said that it was still committed to the deal and would do everything in its power to maintain trade and economic relations with Tehran.

However, due to various problems, like no country actually wanting to host the SPV and no one being really sure how to evade US sanctions legally, the EU missed many deadlines for the SPV and barely anyone thought it would actually come to pass.

What does INSTEX cover?

Well, INSTEX actually focuses on the trade of nonsanctionable essential goods, i.e. food and medicine, but doesn’t address Iran’s oil exports, which have dropped from 2.5 million barrels per day (bpd) to less than 1 million bpd, because of US sanctions. And what is the point in facilitating trade in goods that are not sanctioned?

The Iranian oil business is crippled because of sanctions, with European buyers Greece and Italy pulling out and a complete abandonment of the Regime by oil tanker firms, insurance companies, and banks, who all fear heavy US penalties. Even the European Investment Bank said that investing in Iran would risk their business model.

Apparently, no money will even be transferred to Iran.

What are the INSTEX conditions?

According to a joint statement by France, Germany, and the UK, INSTEX will operate under the “highest international standards with regards to anti-money laundering, combating the financing of terrorism (AML/CFT) and EU and UN sanctions compliance”, which means that Iran will need to comply with the Financial Action Task Force – an international body they are currently suspended from. In essence, Iran will have difficulty complying and this could cause the SPV to fail.

However, Europe has yet to establish its budget or define its rules.

Will it work?

Probably not. It seems disorganised from the get-go, the US has promised to fight against it noting that European companies can still be sanctioned for trading with Iran, and even the Iran Regime doesn’t seem enthusiastic about it. It’s likely that smaller companies will follow in the footsteps of Total and British Airways, and leave Iran for good.

Latest news

Khamenei’s Disgraceful Campaign Against Piranshahr and Javanrud, Who Will Be the Loser?

On the 67th day of Iran’s revolution, the Iranian regime attempted to put a halt to the protests in...

Iran: Expensive Medicine, Cheap Human Life

A look at the equipment and weapons that the Iranian regime has been using against its people to suppress...

Who Is Abolqasem Salavati Iran Regime’s Killer Judge?

Last week, it was announced that the case of several people who were arrested during the Iranian People's uprising...

Iran Revolution Characteristics

More than two months have passed since the start of the latest round of protests in Iran against the...

Iran’s Regime Is Unable To Eradicate Protests

Totalitarian governments, whether be it a monarchy or a clerical regime, and their international supporters are pursuing the same...

Ten Percent of Iran’s Nation Is Ready To Sacrifice Itself for Freedom

According to estimates by the Iranian regime’s main opposition group, the People’s Mojahedin Organization of Iran (PMOI/MEK), more than...

Must read

Quake leaves 10 injured in central Iran

Iran Focus: Tehran, Iran, Feb. 14 At least 10...

Brits crack down on Basra’s police

AP: British troops launched a crackdown Tuesday on Basra's...

You might also likeRELATED
Recommended to you