A mechanism similar to the EU’s INSTEX trade channel, to be called the Special Trade and Finance Institute (STFI), will be registered in Tehran, the head of Iran’s central bank (CBI) said on March 15.
Germany, France and Britain launched Instrument for Supporting Trade Exchanges (INSTEX) in January to facilitate business between Europe and Iran in face of tough U.S. economic sanctions.
The Iranian government’s official news agency (IRNA) cited Abdolnasser Hemmati as saying, "At a meeting with the INSTEX manager and representatives of France and the UK, CBI authorities have fully explained the SFTI mechanism."
Hemmati stopped short of elaborating publicly on the details of the mechanism.
On March 12, a member of the parliament’s board of directors, Alireza Rahimi, had said that, based on INSTEX, two separate mechanisms had been devised to work in tandem and were registered in Iran and Europe.
According to Rahimi, the new company responsible for STFI will operate under the supervision of the CBI or the Economy Ministry.
INSTEX manager and German banking expert Per Fischer, a former manager at Commerzbank, visited Tehran last week to discuss the mechanisms with the Iranian authorities.
Experts representing the European trio also met with their Iran counterparts on March 12.
Based on media reports, the headquarters of INSTEX will be in Paris. The United Kingdom will head the supervisory board.
The European side says it will use INSTEX initially only to sell food, medicine, and medical devices in Iran. However, it will be possible to expand it in future.
However, the Europeans have insisted they expect Tehran to do a lot more before INSTEX can be fully implemented.
Several top Iranian officials, including the chairman of the powerful Expediency Discernment Council (EDC), Ayatollah Sadeq Amoli Larijani, have criticized the European trio for setting "two denigrating conditions" for Iran before fulfilling the agreement.
The conditions, Amoli Larijani maintained on February 4, are negotiations on Tehran's missile program and Iran joining Financial Action Task Force (FATF) for combating money laundering and financing terrorists.
Although the two conditions are not mentioned in the European trio’s statement, they have reiterated that they expected Iran to accept and implement FATF conditions fully.
The fate of the bills related to FATF, the UN Convention Against Transnational Organized Crime (UNTOC) and Combatting the Financing of Terrorism (CFT), is still in limbo. The EDC says it might reach a final decision on the bills by April.