New hopes for saving the JCPOA as the EU is taking steps to launch INSTEX

Tabnak – The long-awaited special mechanism for doing trade with Iran under the US sanctions is said to be reaching the phase of real implementation. As Iran appears serious in its warnings about reducing JCPOA commitments, the European parties of the nuclear deal are upgrading their efforts to launch the mechanism.

A new report in the Wall Street Journal has suggested that the three European parties to a landmark nuclear deal with Iran are to announce their first practical effort to save a special mechanism for trade with the country amid growing economic sanctions imposed by the United States on Tehran.

The Thursday report by the WSJ said that Britain, France and Germany will provide a first credit line for a company known as INSTEX to advance payments for European export to Iran which is supposed under the scheme to be compensated by imports from the country.

The WSJ said the three European powers will announce on Friday that they would inject at least a few million euros to INSTEX to help revive the initiative.

The credit will in fact seek to pay in advance for the export to Iran by European companies as the import from Iran at the current circumstances may not offset the costs incurred on the exporters. It will ensure that, as demanded by INSTEX, the European companies which import Iranian goods will effectively pay European companies exporting goods to Iran.

INSTEX is planned to be based in Paris and be managed by a German banking expert. Britain will head the supervisory board.

It was established in January but was not operational and had carried out no transactions. Initially, European companies will be focused on trading humanitarian products like medicine, medical devices and food, which are not targeted by US sanctions.

On Tuesday, European Union foreign policy chief Federica Mogherini said INSTEX was ready to be deployed. A formal announcement of this is expected in coming days, officials said.

Iranian officials have been demanding that INSTEX show results soon, and European officials have said they hope the first transactions can take place over the next few weeks.

US officials largely have been dismissive of the European trade mechanism. However, some US lawmakers have called for sanctions to be prepared either against INSTEX or against a mirror Iranian company which is supposed to net out Iranian exports and imports in a similar way.

Meanwhile, Iran has warned it will exceed the nuclear deal’s cap on its stockpile of enriched uranium on Thursday if the EU fails to honor its obligations under the international agreement.

On May 8, 2018, US President Donald Trump pulled his country out of the nuclear deal between Tehran and world powers, known as the Joint Comprehensive Plan of Action (JCPOA). Following the US withdrawal, Iran and the remaining parties launched talks to save the accord.