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Instrument in Support of Trade Exchanges

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INSTEX SAS
Company typeSociété par actions simplifiée
IndustryClearing house
FoundedJanuary 31, 2019; 6 years ago (2019-01-31)
Headquarters
Paris
,
France
Key people
Per Fischer
(managing director)
Sir Simon McDonald
(chairman of the supervisory board)
Miguel Berger
(member of the supervisory board)
Maurice Gourdault-Montagne
(member of the supervisory board)
Owner

The Instrument in Support of Trade Exchanges (INSTEX) is a European special-purpose vehicle (SPV) established in January 2019. Its mission is to facilitate non-USD and non-SWIFT[1][2] transactions with Iran to avoid breaking U.S. sanctions.[3]

Five EU nations declared in a joint statement on November 29 2019 will join the INSTEX mechanism for trade with Iran, these countries are Belgium, Denmark, Netherlands, Finland and Sweden.[4]

HQ

The SPV is headquartered in Paris and is headed by Per Fischer, who formerly served as Head of Financial Institutions at Commerzbank, between 2003 and 2014.[5]

Purpose

As of May 2019, the use of the SPV is limited to humanitarian purposes; such as the purchase of otherwise embargoed foods or medicines.[6] INSTEX had been made available to all EU member states. On 11 February 2019, Russian deputy foreign minister Sergei Ryabkov stated that Russia would be interested in participating in INSTEX.[7]

Operations

On June 28, 2019, the EU released a statement stating that INSTEX had been made operational.[8] Federica Mogherini stated that the purpose of Instex is to facilitate "legitimate trade" with Iran for any EU member and has been conceived to be open to non-EU countries.[9]

In Iran, INSTEX is mirrored by the STFI (Special Trade and Finance Instrument), a similar SPV. STFI matches incoming and outgoing transactions in the same way. In effect, two Iranian entities pay each other, thus, no money cross the Iranian border.[10]

As of January 2020, the mechanism remained unused and "irrelevant to EU-Iranian trade".[11][12]

On the 31st of March 2020, the first INSTEX transaction was concluded. It covered an import of medical equipment to combat the COVID-19 outbreak in Iran.[13][14]

See also

References

  1. ^ "European powers launch mechanism for trade with Iran". Reuters. 31 January 2019.
  2. ^ Annalisa Girardi. 9,310 viewsApr 9, 2019, 08:21am INSTEX, A New Channel To Bypass U.S. Sanctions And Trade With Iran. Forbes. 9 April 2019.
  3. ^ Forbes Magazine Europe Circumvents U.S. Sanctions On Iran
  4. ^ Didili, Zoi (3 December 2019). "Six European nations join INSTEX mechanism for trade with Iran". New Europe. Retrieved 21 December 2019.
  5. ^ "INSTEX: Europe sets up transactions channel with Iran". Deutsche Welle. 31 January 2019.
  6. ^ Forbes Magazine INSTEX, A New Channel To Bypass U.S. Sanctions And Trade With Iran
  7. ^ "Рябков: РФ будет добиваться участия в механизме внешнеторговых расчетов INSTEX с Ираном". ТАСС. Retrieved 11 February 2019.
  8. ^ Foundation, Thomson Reuters. "Europe says Iran trade channel operational -statement". news.trust.org. Retrieved 28 June 2019. {{cite web}}: |first= has generic name (help)
  9. ^ Remarks by High Representative/Vice-President Federica Mogherini following the Foreign Affairs Council. Bruxelles, 15/07/2019 - 19:29, UNIQUE ID: 190715_18. eeas.europa.eu.
  10. ^ "EU nations launch mechanism to trade with Iran - Euronews Answers". Euronews. 31 January 2019.
  11. ^ "EU-Iran Instex trade channel remains pipe dream". DW. 31 January 2020.
  12. ^ Brzozowski, Alexandra (14 January 2020). "INSTEX fails to support EU-Iran trade as nuclear accord falters". Euractiv. Archived from the original on 14 January 2020. Retrieved 20 June 2020.
  13. ^ https://www.gov.uk/government/news/instex-successfully-concludes-first-transaction
  14. ^ "European countries to send medical aid to Iran in first INSTEX transaction". AMN. 31 March 2020. Retrieved 31 March 2020.
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