Defying US, European parties to JCPOA launch payment channel with Iran

Following months-long preparations, top diplomats of France, Germany and Britain finally unveiled the mechanism -- officially called the Instrument In Support Of Trade Exchanges (INSTEX) -- on Thursday following a summit in Bucharest.

France, Germany and the UK are the shareholders of the special purpose vehicle (SPV) for trade was registered in the French capital, Paris, with 3,000 euros capital and will be government be a German banking expert, according to AFP and German media.

INSTEX is designed to pave the way for European firms to do business with Iran while evading the strict sanctions the US re-imposed against Iran last year after leaving the 2015 multinational nuclear deal, formally called the Joint Comprehensive Plan of Action (JCPOA).

The mechanism will initially facilitate trade of humanitarian goods such as medicine, food and medical devices.

"It is a political act," French Foreign Minister Jean-Yves Le Drian told reporters. "It is a gesture to protect European companies."

In turn, Britain's Jeremy Hunt said the three countries were working closely with Tehran to finalize arrangements.

"Registration is a big step, but there is still more work to be done," Hunt said.

'A long overdue first step taken '

Iranian Foreign Mohammad Javad Zarif was quick to welcome the trio's announcement, saying Tehran's European partners in the deal finally tool a "long overdue first step."

"We remain ready for constructive engagement with Europe on equal footing & with mutual respect," the top Iranian diplomat tweeted.

Earlier in the day, Iranian Deputy Foreign Minister Seyyed Abbas Araqchi also described the launch as "the first of a set of commitments to Iran that the Europeans must fulfill," expressing hope that mechanism will not be left incomplete.

The payment system, he said, could "fully meet our interests only when it is accessible to non-European firms and countries...so it could cover our entire international purchases," adding that this feature "is apparently slated to be realized in the next phase."

Details about how the mechanism functions will be put to talks in the future expert-level meetings between Iran and Europe, Araqchi added.

INSTEX has 'full EU support '

Shortly after the announcement, the EU's foreign policy chief, Federica Mogherini, who has been leading the bloc's efforts to keep the Iran deal alive, issued a statement in support of INSTEX, saying, "The instrument launched today will provide economic operators with the necessary framework to pursue legitimate trade with Iran."

US irked

Unhappy with efforts by allied EU countries to blunt the impact of American bans, Washington sought to play down the newly-launched SPV.

Joseph Giordono-Scholz, spokesman for the US embassy in Berlin, said Thursday that Washington was "closely following" the developments regarding the EU's financial channel with Iran.

"As the President (Donald Trump) has made clear, entities that continue to engage in sanctionable activity involving Iran risk severe consequences that could include losing access to the US financial system and the ability to do business with the United States or US companies," he said.

The diplomat further claimed, "We do not expect the SPV will in any way impact our maximum economic pressure campaign."

Following its withdrawal from the Iran deal, Washington warned its European allies against any attempt to evade its anti-Iran sanctions, threatening those refusing to abide by the bans with "terrible consequences."

The Europeans, however, said they were intent on trying to salvage the deal and find ways to compensate for Washington's absence in an effort to keep Tehran in the deal.

Iran has said the JCPOA without the US should meet its economic interests or it will leave the nuclear deal.

Source: Press TV