Despite the tough US sanctions, Europe and Iran, many months late, processed the first transaction via the Instex exchange, which is said to at least allow restricted trade with the Islamic Republic. With this first transaction, medical goods from Europe were delivered in, said the Federal Foreign Office.
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Instex was founded in January 2019 after the U.S.’s withdrawal from the nuclear deal with Iran to enable trade between the remaining European contracting states and Iran despite U.S. sanctions. Payment transactions for transactions with Iran can now be processed via the special purpose vehicle if private banks no longer agree to do so due to impending US penalties. Instex therefore acts as a protective institution for trade between Europe and Iran.
“Now that the first transaction has been completed, Instex will work with the Iranian mirror organization STFI on further transactions and further develop the mechanism,” said a statement from the Federal Foreign Office.
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In the nuclear agreement with the five UN veto powers (USA, China, Russia, Great Britain and France) and with Germany in 2015, Iran committed to designing its nuclear program in such a way that it could not build atomic bombs. In return, sanctions should be lifted and trade promoted. Iran, but also European companies, had hoped that this would result in a massive increase in the exchange of goods.
In May 2018, the United States withdrew from the contract imposed additional new sanctions. A year later, Iran also began to gradually move away from its obligations under the agreement. The nuclear deal had thus tottered. With Instex, Europeans are trying to keep it up.
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