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Iran on EU Trade Mechanism to Bypass US Sanctions: 'Beautiful Car Without Fuel'

© AFP 2023 / ATTA KENAREEuro and United States 100-dollar banknotes and Iran's rial banknotes
Euro and United States 100-dollar banknotes and Iran's rial banknotes - Sputnik International
The European Union announced on Friday that its financial settlement mechanism known as INSTEX set up to allow trade with Iran despite US penalties had become operational, with Iran's envoy on the nuclear deal later confirming that the system was working and transactions were already taking place.

Iran's ambassador to the United Nations Takht Ravanchi has compared the European payment mechanism, designed to continue trading with Iran and circumvent US sanctions, to a "beautiful car without fuel", according to the Islamic Republic News Agency (IRNA).

"I personally believe that INSTEX in its current condition isn't enough. This mechanism without money is like a beautiful car without fuel. The Europeans asked us to remain in the JCPOA. We waited a year as they requested, but we told our European counterparts that they need to take tangible steps to maintain the nuclear deal. Mere statements in support of the pact doesn't resolve our problems", he told a Saturday briefing at Iran's permanent mission to the UN in New York.

Ravanchi blasted the Europeans for having done nothing "tangible" since the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May 2018, adding that "we can't keep our end of the bargain unilaterally and not benefit from it".

"We are not threatening anyone. We don't have ultimatums to others. We have told them our plans that if they don't do anything, we will reduce our commitments. We will take new steps if they live up to their commitments or responsibilities", he stressed.

Ravanchi's comments echoed remarks by the Iranian Foreign Ministry, which said that Tehran will take another decisive step in reducing its commitments under the deal, if the EU's Instrument in Support of Trade Exchanges, or INSTEX, does not meet its requirements.

"If Europeans take steps and launch INSTEX, which should meet our needs and aspirations and we see that this mechanism is just a formality, Iran will definitely not accept it and eventually make a second decisive step", Iranian Foreign Ministry spokesperson Seyyed Abbas Mousavi said, as quoted by the Fars news agency.

The statements come shortly after the EU officially announced late Friday that INSTEX had been made "operational and available to all EU Member States and that the first transactions are being processed".

INSTEX was set up by the EU to facilitate trade between European companies and Tehran in the face of US secondary sanctions earlier this year, but Iran has consistently slammed the mechanism as insufficient at this stage. EU member states have argued that INSTEX will initially deal with food and medicine, while the Islamic Republic has sought oil trade to be included.

In early June, Iranian President Hassan Rouhani warned that Tehran would continue to suspend some of its voluntary commitments under the nuclear deal if it doesn't see some "positive signals" from the remaining signatories — France, Germany, the UK, Russia, and China — to the agreement in the immediate future.

"Obviously, Iran cannot stick to this agreement unilaterally. It is necessary that all the sides of this agreement contribute to restoring it", Rouhani said.

Iran first announced that it would start suspending some of its voluntary commitments under the JCPOA within 60 days on 8 May – exactly one year after the US unilaterally pulled out from the deal and decided to reinstate all sanctions against the Islamic Republic.

The Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal, was signed in 2015 by Iran and the P5+1 nations — Russia, the US, China, France, the UK plus Germany — after years of tense negotiations. The multilateral accord sought to curb Iran's nuclear ambitions in exchange for the gradual lifting of economic sanctions on Tehran.

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