The Instrument in Support of Trade Exchanges, known as INSTEX, a European Union mechanism for financial settlements with Iran, is failing to gain momentum, Russia’s permanent envoy to the EU, Vladimir Chizhov, told Tass news agency on Friday.
"The mechanism is in place but so far it has not gained momentum. The only thing it can now take pride in is that it is now yielding some deals. But these are agreements for food products and not subject to the US sanctions anyway," he said.
"So, it has nothing to do with bypassing sanctions," the Russian diplomat noted. "Naturally, it would be logical to ask: if INSTEX was created to pay for goods not falling under the sanctions, then why was it needed? My European colleagues keep saying that this is just the beginning…"
There are provisions in the unilateral sanctions regime that allow other countries to trade in basic goods and pharmaceuticals with Iran.
France, Germany and the United Kingdom (E3), party to the landmark Iran nuclear deal, announced in February the creation of a financial mechanism for non-dollar trade with Iran.
Two months later Iran created a corresponding entity for INSTEX, known as the Special Trade and Finance Institute (STFI).
Fearing US wrath, the EU trade mechanism has so far failed to initiate trade with Iran as was expected by businesses in and outside Iran.