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Germany Not Against IMF Loan To Iran, Foreign Minister Says

German Foreign Minister Heiko Maas. FILE PHOTO

Speaking to reporters on Tuesday, German Foreign Minister Heiko Maas said his country is not against the payment of a $5 billion International Monetary Fund (IMF) loan to Iran to battle coronavirus.

Iran's President Hassan Rouhani has criticized the United States for preventing the payment of the IMF loan and said the Instex mechanism set up for making humanitarian trade with Iran does not fulfil Iran's needs.​

Iran's Central Bank applied to the IMF for the loan on March 12. It was the first time since 1962 that Iran asked the international organization for emergency funding.

Instex was set up more than a year ago to allow legitimate humanitarian trade with Iran and to send medical supplies to Iran in a way that would not violate U.S. sanctions. However, the first Instex transaction took place much later, on March 31 2020, when the EU sent a sizable shipment of medicine and medical equipment to Iran. The shipment had nothing to do with the COVID-19 pandemic as the order for the dated back to several months before the outbreak of coronavirus in Iran.

Pointing out that Instex was created because of U.S. sanctions on Iran in order to make trade exchange in the humanitarian area possible, the German Foreign Minister on Tuesday said the IMF should ensure that the aid to Iran is used for dealing with the coronavirus crisis, not other purposes.

Maas also pointed out that the second transaction through Instex is to take place soon but every transaction should be carefully investigated to make sure it does not contribute to funding terrorism or money laundering.

On April 12 in a letter to President Donald Trump, the U.S. Senator Dianne Feinstein urged him not to block Iran's access to the IMF loan. “Providing these funds to Iran would help it respond more effectively to the disease and mitigate the risk of further destabilization in the region,” she said in her letter.

Trump has offered some humanitarian assistance to Iran, but Iranian officials have rejected the offer, saying Washington should instead lift the sanctions, which Rouhani on April 8 equated to “economic and medical terrorism.”