The special purpose vehicle INSTEX (Instrument for Supporting Trade Exchanges) is intended to facilitate legitimate trade between European companies and other business stakeholders, for instance financial institutions, and Iran. Foreign Minister Maas and his French and British colleagues announced the creation of the vehicle on 31 January on the fringes of the informal meeting of EU Foreign Ministers in Bucharest. Maas emphasised that the establishment of INSTEX is a key part of the European efforts to uphold the Vienna agreement:
It makes it clear that we are able to take action. We believe in the nuclear agreement with Iran because we think that it has an impact on Europe’s immediate security interests.
Following its withdrawal from the nuclear agreement, the United States re-imposed sanctions against Iran. These sanctions are hindering legitimate trade between Europe and Iran.
By setting up INSTEX and facilitating legitimate trade, the three countries are complying with the economic provisions contained in the Vienna nuclear agreement. They also expect Iran to comply in full with its obligations under the agreement. Iran’s cooperation with the International Atomic Energy Agency is especially important.
What will INSTEX do?
The focus of the business activities which are to be facilitated by INSTEX will initially be on economic areas of importance to the daily lives of Iranians. This includes the trade in pharmaceuticals and food.
In the long term, INSTEX is also intended to be open to business stakeholders from non-EU states which want to trade with Iran. The three countries will examine on an ongoing basis how this goal can be achieved.
What happens next?
In a next step, Germany, France and the UK will work together with INSTEX to establish how it will proceed. The three countries are working with Iran to create an INSTEX counterpart there. Both steps are necessary if the vehicle is to start work.
Could INSTEX be used to finance terrorism?
INSTEX will comply with the highest international standards on combating money laundering and terrorism financing. Moreover, it will adhere to the sanctions imposed on Iran by the EU and the United Nations.
INSTEX will help to ensure that the JCPOA is complied with and that Iran does not restart uranium enrichment for military purposes. At the same time, the EU and E3 will actively address Iran’s problematic role in the region, for example in the Syria conflict, Iran’s missile programme as well as the human rights situation in Iran.