EU launches INSTEX to bypass US sanctions against Iran

By Ayhan Simsek

BERLIN

EU’s major powers have set up a new mechanism, INSTEX, to continue trade with Iran in defiance of U.S. sanctions, local media reported on Thursday.

The INSTEX, short for “Instrument in Support of Trade Exchanges", will be based in Paris and managed by a German banking expert, Germany’s public broadcaster NDR reported.

EU heavyweights Germany, France and the U.K. would try to keep the landmark Iran nuclear deal alive, with offering European firms an alternative payments channel, the report said.

The three countries, which are all signatories to the nuclear agreement, will appoint officials to the supervisory board of the INSTEX, and the mechanism will also be open to the participation of other EU member states, according to the report.

Despite U.S. President Donald Trump’s decision last year to leave a 2015 nuclear deal with Tehran, Germany, France and the U.K. insisted that the agreement was the most effective way to prevent Iran from developing nuclear technology for military purposes.

World powers including the U.S., Russia and China, had agreed in 2015 to lift economic sanctions imposed on Iran in return for the latter agreeing to limit its nuclear activity to peaceful and civilian purposes.

The agreement was signed between Iran and the five permanent UN Security Council members -- US, China, Russia, France, and the U.K. -- plus Germany.