E3 Issues Joint Statement on Creation of INSTEX; Zarif, Mogherini Hail New SPV

TEHRAN (Tasnim) – Britain, France and Germany on Thursday issued a joint statement on the creation of a new trading system called the Instrument in Support of Trade Exchanges (INSTEX) that will allow trade between the EU and Iran without relying on direct financial transactions.

E3 Issues Joint Statement on Creation of INSTEX; Zarif, Mogherini Hail New SPV

"INSTEX will support legitimate European trade with Iran, focusing initially on the sectors most essential to the Iranian population -- such as pharmaceutical, medical devices and agri-food goods," the foreign ministers of Britain, Germany and France -- Jeremy Hunt, Heiko Maas and Jean-Yves Le Drian -- said in a joint statement, France Diplomatie website reported late on Thursday.  

INSTEX has been registered in France and will be run by German banker and former Commerzbank manager Per Fischer. The new special purpose vehicle will have a supervisory board consisting of diplomats from all three countries: Miguel Berger of Germany, Maurice Gourdault-Montagne of France and Simon McDonald of Britain.

Shortly after the announcement, Iranian Foreign Minister Mohammad Javad Zarif hailed the new measure in a tweet and said, “Iran welcomes #INSTEX—a long overdue 1st step—in E3 implementation of May 2018 commitments to save JCPOA by ensuring dividends for Iranians after US’ illegal reimposition of sanctions. We remain ready for constructive engagement with Europe on equal footing & with mutual respect.”

The EU's foreign policy chief, Federica Mogherini, who has led the bloc's efforts to save the Iran the 2015 nuclear deal between Tehran and world powers, also welcomed its creation and said, “I welcome today's registration of INSTEX SAS (Instrument for Supporting Trade Exchanges), a Special Purpose Vehicle with France, Germany and the United Kingdom as initial shareholders.”

She added “The lifting of sanctions is an essential dimension of the JCPOA (Joint Comprehensive Plan of Action), the Iran nuclear deal. The instrument launched today will provide economic operators with the necessary framework to pursue legitimate trade with Iran.”

“The European Union continues to be committed to the full and effective implementation of the JCPOA in all its aspects as long as Iran continues to implement in full all its nuclear commitments, as set out by the agreement. The International Atomic Energy Agency (IAEA) has confirmed in thirteen consecutive reports that Iran is fully abiding by its commitments under the agreement.”

Mogherini concluded, “Our joint work to preserve the JCPOA continues, including with the other JCPOA participants, and with international partners. This is a matter of respecting international agreements and of advancing our shared regional and international security.”

Following is the full text of the statement by the three European countries:

France, Germany and the United Kingdom, in accordance with their resolute commitment  and continued efforts to preserve the Joint Comprehensive Plan of Action (JCPOA) endorsed by United Nations Security Council resolution 2231, announce the creation of INSTEX SAS (Instrument for Supporting Trade Exchanges), a Special Purpose Vehicle aimed at facilitating legitimate trade between European economic operators and Iran.

The E3 reaffirm that their efforts to preserve the economic provisions of the JCPOA are conditioned upon Iran’s full implementation of its nuclear-related commitments, including full and timely cooperation with the IAEA.

INSTEX will support legitimate European trade with Iran, focusing initially on the sectors most essential to the Iranian population – such as pharmaceutical, medical devices and agri-food goods. INSTEX aims in the long term to be open to economic operators from third countries who wish to trade with Iran and the E3 continue to explore how to achieve this objective.

The creation of INSTEX is a major first step taken by E3 countries today. The operationalization of INSTEX will follow a step-by-step approach:

The E3 together with INSTEX will continue to work on concrete and operational details to define the way the company will operate.

The E3 will also work with Iran to create an effective and transparent corresponding entity that is required to be able to operationalize INSTEX.

INSTEX will function under the highest international standards with regards to anti-money laundering, combating the financing of terrorism (AML/CFT) and EU and UN sanctions compliance. In this respect, the E3 expect Iran to swiftly implement all elements of its FATF action plan.

The E3 underline their commitment to pursue the further development of INSTEX with interested European countries to make this instrument in support of trade exchanges with Iran operational by following the steps set out above.

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