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Iran Sets Up Trade Mechanism To Match Europe's INSTEX

Abdolnaser Hemmati chief of Iran's central bank. File photo
Abdolnaser Hemmati chief of Iran's central bank. File photo

Iran’s Central Bank announced on Wednesday that a company matching Europe’s trade mechanism, INSTEX was registered in Tehran.

Three days earlier, the head of the central bank announced that Special Trade and Finance Institute (STFI) will be established in Iran to work with Europe’s Instrument in Support of Trade Exchanges (INSTEX), to facilitate limited trade in the face of U.S. economic sanctions reimposed on Iran in 2018.

A European delegation recently visited Iran to finalize arrangements, but Iranian officials have been expressing reservations if INSTEX will play a major role in breaking Iran’s economic isolation.

The official government agency IRNA reported March 19, that STFI will be established with partnership among several Iranian banks and companies.

Abdolnaser Hemmati, Iran’s chief banker told local media that the new outfit is registered with an initial capital of around $25,000.

March 20 was the last working day in Iran before the long Iranian New Year holidays. Hemmati expressed hope that STFI can work with INSTEX “to facilitate trade between Europe and Iran and play an effective role in overcoming limitations imposed by U.S. sanctions”.

Europe seems willing to allow trade in food and medicines but the question of Iranian oil exports to EU does not appear to be imminent. Iran has yet to accept financial controls based on international standards that aim to prohibit money laundering and financing of terrorists.