Wednesday, 17 July, 2019

New mechanism for European trade with Iran is legitimate: Germany’s BGA

A new channel for non-dollar trade with Iran that France, Germany and Britain have opened to avert U.S. sanctions is legitimate and sends an important signal of Europe’s reliability as a trade partner, Germany’s BGA trade association said.

BGA President Holger Bingmann said on Friday that questions nonetheless remained about the exact structure of the Instrument In Support Of Trade Exchanges, or INSTEX.

The three European parties to the 2015 Iran nuclear deal have set up a way to work around sanctions reimposed by President Donald Trump, who pulled out of the deal last year.

The mechanism, which officials say will launch in the next few months, would barter goods between Britain, Germany and France and Iran. A joint British-German-French statement said the mechanism would comply with international standards that prohibit money laundering for terrorists.

The system evades tough U.S. sanctions that penalize companies that do any business with Iran that touches the U.S. financial markets. Virtually all overseas commerce in some fashion eventually runs through U.S.-run financial institutions.

Iran has welcomed the development.

Along with the three European nations, the other two parties to the deal — Russia and China — hope to salvage the plan, which trades sanctions relief for a rollback of Iran’s nuclear program. Trump, backed by Israeli Prime Minister Benjamin Netanyahu, said the plan was a failure and facilitated Iran’s nuclear program and other bad acts in the region.

The Associated Press quoted a State Department official as saying that the Trump administration was “closely following” reports about the mechanism.

“As the president has made clear, entities that continue to engage in sanctionable activity involving Iran risk severe consequences that could include losing access to the U.S. financial system and the ability to do business with the United States or U.S. companies,” the official said.

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