The very first transaction of the INSTEX special purpose 'alternative' vehicle between Europe and Iran has been successfully completed, according Germany's Foreign Ministry Tuesday. "France, Germany and the United Kingdom confirm that INSTEX has successfully concluded its first transaction, facilitating the export of medical goods from Europe to Iran. These goods are now in Iran," the ministry said in a statement.
It was created over a year ago by European signatories to the 2015 nuclear deal in order to bypass Trump administration Iran-related sanctions, after the Belgium-based SWIFT financial messaging service suspended access for Iranian banks in Nov. 2018 under pressure from Washington.
France, Germany, and the United Kingdom confirmed the first transaction with Iran involving the export of medical goods, at a crucial moment the coronavirus is ravaging the population, and vowed it was the first of many to come.
France, Germany and the United Kingdom confirm that INSTEX has successfully concluded its first transaction, facilitating the export of medical goods from Europe to Iran. INSTEX and its Iranian counterpart STFI will work on more transactions and enhancing the mechanism. pic.twitter.com/0z4KJwDjuw— GermanForeignOffice (@GermanyDiplo) March 31, 2020
"Now the first transaction is complete, INSTEX and its Iranian counterpart STFI will work on more transactions and enhancing the mechanism," the statement said on behalf of the three nuclear deal signatories.
Though Tehran has long criticized the Europeans for bowing to Trump's sanctions and not doing enough to keep up their end of the JCPOA, the 'SWIFT-alternative' of INSTEX is designed to save the nuclear deal by at least partially ensuring trade transactions with Europe continues, also with the assurance that no money directly changes hands.
The mechanism also seeks to woo European companies back into doing business with Iran, and to provide a legal and 'humanitarian' means of bypassing US sanctions without fear of penalties.
How INSTEX is designed to work, via Global Trade Law Blog: "The program sets up a trade finance system between Europe and Iran. EU exporters send goods to Iran, submit invoices to INSTEX, and receive payment from the INSTEX entity in Europe. Likewise, Iranian exporters send goods to Europe, submit invoices to the INSTEX-related entity in Iran, and receive payments in Iranian Rials. No U.S. dollars are involved, nor is the SWIFT system (both of which could subject the transactions to U.S. sanctions)."
The timing is sure to not be missed by the Trump administration, given that even amid the global coronavirus pandemic, which has been particularly fierce in Iran - taking over 2,800 lives among 44,600 confirmed cases - the US has kept up its "maximum pressure" campaign, despite critics saying the sanctions are ensuring the further spread of the virus through hitting Iran's already weakened medical sector hard.