A European payment system with Tehran to avoid US sanctions

Iranian deputy foreign minister says it is part of "the commitments made" by Europe to save trade with the Islamic Republic. Instex will be applied to the food, pharmaceutical and consumer goods sectors.

Teheran (AsiaNews / Agencies) - Teheran has welcomed the launch of a new payment channel promoted by the European Union, to circumvent the US sanctions against the Islamic Republic. Quoted by the official Irna agency, Deputy Foreign Minister Abbas Araghchi emphasizes that the special scheme of trade is part of "the list of commitments made by Europeans" and that "I hope they will be applied in full".

The payment scheme was announced yesterday by the United Kingdom, France and Germany, and allows businessmen to trade with the Islamic Republic without incurring US sanctions. The three countries are among the most ferocious critics of the bellicose policy implemented by Washington.

The JCPOA deal was signed in 2015, but the United States pulled out in May 2018 despite the opposition of the international community. US President Donald Trump followed the withdrawal by imposing the toughest sanctions in history against Iran.

The decision has negatively impacted the Iranian economy as noted by the International Monetary Fund (IMF). Oil exports have dropped considerably, which was the goal of the second round of sanctions that came into effect on 4 November.

Some of the US sanctions make it difficult for banks in the Old Continent to make direct payments to Iran. On several occasions the White House has threatened "very serious consequences" for those who promote activities with the ayatollahs that may be subject to sanctions. With the creation of a new payment channel - based in Paris and run by a German banker - the three European states are hoping to allow companies to continue trading.

Current payment systems in operation have ties - more or less tight - with the United States and this makes it difficult, if not impossible, to use them in relations with the Islamic Republic. The British Foreign Ministry emphasizes that the payment channel renamed Instex represents "a new mechanism to facilitate legitimate businesses between European entities and Iran".

At first it will be applied to the food, pharmaceutical and consumer goods sectors, which are not subject to penalties. Excluding, however, the oil sector that is the main source of wealth for Tehran and is the number one target of US sanctions.

In a note, the US embassy in Berlin remembers President Trump's policy that he intends to strike anyone who "executes activities with Iran that come under the category of sanctions". However, the statement continues, the new payment system "should in no way affect the White House's economic pressure campaign against Tehran.