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Iran calls new European special payment mechanism ‘first step’

Iran called a new European initiative to establish a payment mechanism to facilitate trade a “first step” and hopes it will expand.
Iran's Foreign Minister Mohammad Javad Zarif attends a meeting with European Union's foreign policy chief Federica Mogherini, Britain's Foreign Secretary Boris Johnson, Germany's Foreign Minister Sigmar Gabriel and France's Foreign Minister Jean-Yves Le Drian in Brussels, Belgium January 11, 2018. REUTERS/John Thys/Pool - RC14575CD590

Europe has finally set up a Special Purpose Vehicle (SPV) to bypass US sanctions on Iran in order to keep alive the Joint Comprehensive Plan of Action (JCPOA), which the United States unilaterally exited in May 2018. INSTEX (Instrument in Support of Trade Exchanges) was established by Germany, France and the United Kingdom, and will be used initially to sell food, medicine and medical devices to Iran. It will be based in Paris, managed by a German banking expert and have a UK-led advisory board. It will ultimately allow trade to continue with Iran but will also likely anger the United States, which reimposed sanctions on Iran after exiting the JCPOA.

Abbas Araghchi, deputy foreign minister and one of Iran’s top negotiators for the JCPOA, spoke to Iranian media about INSTEX. “This is a special financial mechanism that the Europeans have been after for months,” Araghchi said. “The goal of this mechanism is so that all of the receipts and payments between Iran and Europe, imports and exports, go through this mechanism.” Araghchi said INSTEX will have “complete benefit” for Iran once other countries and non-European companies have access to it.

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