EU Launches Trade Mechanism to Try to Save Iran Nuclear Deal

US warns European companies against conducting any trade with Iran

With Iran growing increasingly disillusioned with the P5+1 nuclear deal, citing Europe’s failure to come through with a promised mechanism to allow European companies to keep trading with Iran, the European Union announced Friday that the mechanism, called INSTEX, is now up and running.

INSTEX functions as a clearing house, allowing European companies to do business with Iran without having to involve banks. This is important because large banks are overwhelmingly too scared of US retaliation to finance trade.

Today’s launch is many months after INSTEX was initially expected, which is a big part of why Iran has been complaining about the European Union’s lack of follow-through. That the EU managed to get it online suddenly suggests Iran was not run to believe they were dragging their feet.

US officials are angrily condemning INSTEX, warning that it stands in violation of US policy, and that European businesses should believe it is a “very poor business decision” to use it to trade with Iran.

Iranian officials seem to be taking a wait-and-see approach, saying that what’s been offered so far is “not enough.” This assessment could quickly change, however,if INSTEX turns out to open the flow of trade back and forth between Iran and the EU market.

Author: Jason Ditz

Jason Ditz is news editor of Antiwar.com.