Mechanism would allow Iran to trade with EU companies without dollars and through barter techniques; EU claims efforts will keep nuclear deal alive; Iran reports worst economic crisis since Revolution in 1979.
The European Union announced it created a payment mechanism for trade with Iran.
Britain, France and Germany’s “Instrument In Support Of Trade Exchanges” (INSTEX) will allow the Islamic Republic to trade with European companies without relying on financial institutions as a means to bypass restrictions from US sanctions.
The mechanism was developed by the European Commission and will include “barter techniques” and payment channels other than banks and without dollar currency. According to the EU, INSTEX will provide avenues for financial provisions under the Joint Comprehensive Plan of Action (nuclear deal) with world powers, which they claim will keep the deal alive.
Representatives and officials from the EU met in Bucharest, Romania on Thursday to finalize the mechanism and are expected to begin offering the services on non-sanctionable trade.
The announcement falls as Iran’s President Hassan Rouhani reported the country’s greatest economic crisis in over 40 years. Speaking at a ceremony honoring 40 years since the Islamic Revolution of 1979, Rouhani denounced the United States’ sanctions and shifted the blame, claiming, “Today the country is facing the biggest pressure and economic sanctions in the past 40 years… our problems are primarily due to pressure from America and its followers.”
As with the majority of his speeches and accusations, he reiterated that Iran’s “dutiful government and Islamic system should not be blamed” for Iran’s economic collapse and that “the US administration will definitely fail in its latest move against the Iranian nation… Nobody can harm us as long as we follow the Supreme Leader,” in reference to Sayyid Ali Hosseini Khamenei.
During the signing of 11 agreements and memorandum of understanding between Iran and Syria this week, both countries announced they would not use US dollars in their “long-term strategic economic cooperation deals”. Trade and bank transactions would use only local currencies moving forward.
Photo: Derek Brumby/Shutterstock.com
