Deputy Foreign Minister Abbas Araqchi says the European financial mechanism has political value but that it needs to meet Iran’s needs to be a fruitful solution.
Iran says INSTEX and its counterparty in Tehran are finally operational, stressing that its capital should be provided by Iranian oil sales revenues.
“INSTEX is a good base for trade exchanges but its implementation has become very lengthy and there aren’t revenues in this mechanism unless the Europeans buy oil from Iran or open credit lines for Iran-Europe exchanges,” said Deputy Foreign Minister Abbas Araqchi during a press conference on Sunday in Tehran.
He was answering questions during a government presser in which Tehran has announced the second phase of reduction of its nuclear commitments in response to the EU’s failure to help Iran benefit from the economic dividends of the nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA).
“INSTEX has become operational finally. One or two small pilot trade exchanges has been carried out, but it won’t be enough in necessary credits are not opened,” Araqchi added.
He went on to stress that INSTEX is a mechanism with “political value”, noting that it’s not accepted by Iran if it doesn’t have economic benefits.
Araqchi mentioned that a growing number of other countries are also willing to join INSTEX as shareholders, warning that Iran will take its third wave of actions in scaling down its nuclear commitments in case the mechanism doesn’t meet Tehran’s demands.
Iran’s deputy foreign minister emphasised that no governmental officials or entities have pinned hope on INSTEX, saying that Iran has opened other financial channels with other countries.
“We have had initiatives with China, Russia, Turkey, India and other regional countries. One of those initiatives is INSTEX. No one has pinned hope neither on Europe, nor INSTEX, but we will use every possible channel to lower the pressure,” according to Araqchi.
Instrument in Support of Trade Exchanges (INSTEX) was created by Germany, France and the UK, the three European signatories to the nuclear deal, in January.
Iran has also set up a similar company, called Special Trade and Financing Instrument between Iran and Europe (STFI) to facilitate bilateral trade.
STFI President Ali Asqar Nuri told Iran Chamber Newsroom on Sunday that a pilot transaciton is being carried out through the channels.