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Iran welcomes new EU trade entity as ‘first step’

Iran welcomes new EU trade entity as ‘first step’

Tehran: Tehran on Thursday cautiously welcomed as a “first step” the expected launch of an EU trade entity aimed at saving Iran’s nuclear deal by bypassing US sanctions.

The special payment mechanism “is the first step within the set of commitments the Europeans have made to Iran which I hope will be fully implemented and not be incomplete”, said deputy foreign minister Abbas Araghchi, according to state news agency IRNA.

The formal announcement of the new payment vehicle is expected to be made on Thursday afternoon by the German, French and British foreign ministers in Bucharest.

The entity, registered in France with German governance and finance from all three countries, will allow Iran to trade with EU companies despite Washington reimposing US sanctions after President Donald Trump pulled out of the 2015 accord.

The three countries are the European parties to the landmark deal that curbed Tehran’s nuclear ambitions in return for sanctions relief.

The new European scheme called INSTEX — short for Instrument in Support of Trade Exchanges — was originally intended to allow Iran to sell oil to the EU on a barter basis.

But, with Europe currently buying very little Iranian crude, it is now aimed at small- and medium-sized companies.

Iran is hoping that INSTEX will allow the Europeans to meet Tehran’s trade demands and keep the nuclear deal afloat.

“This entity has been in principle designed for sanctioned goods,” Araghchi said.

He denied claims by some in Iran that sanctioned goods would not be traded by INSTEX.

“Some have said that this entity has been designed for non-sanctioned goods such as food, etc. It is possible that the beginning of activities might be with these goods until a mechanism for payments takes form,” he said.

“But in principle this entity would (only) be useful for sanctioned goods and the objective of the entity is for sanctioned goods,” Araghchi added.

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