EU-initiated payment system with Iran completes first transactions, full-mode operation on its way

Source: Xinhua| 2019-07-30 13:12:14|Editor: Lu Hui
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VIENNA, July 30 (Xinhua) -- The European Union(EU)-initiated payment system with Iran has seen the completion of its first transactions and is expected to be officially launched after related procedures are aligned, a Russian official said after a joint commission of the Iranian nuclear deal meeting in Vienna on Sunday.

The system, formally known as the Instrument in Support of Trade Exchanges (INSTEX), "is operating in a pilot mode. In order to make it operate in full mode some bureaucratic procedures between the INSTEX and the Iranian structure similar to INSTEX need to be finished," Russia Deputy Foreign Minister Sergey Ryabkov was quoted by Sputnik news agency as saying.

It was announced in January that the INSTEX, the European Union (EU)'s payment system to facilitate trade with Iran to get around U.S. sanctions, would secure trade with Iran and skirt U.S. anti-Iran sanctions after Washington pulled out of the 2015 landmark Joint Comprehensive Plan of Action (JCPOA) in May 2018.

Following a meeting of the joint commission of the Iranian nuclear deal in June, the mechanism became operational and available to all EU member states.

Tehran wants to bring its oil exports back to the level before the United States' withdrawal from the landmark deal, Iranian Foreign Ministry spokesperson Abbas Mousavi said on Monday.

"Our demand is to (allow Iran to) sell oil as it used to be before the US pullout from the nuclear agreement," Mousavi said, commenting on the situation around Europe's INSTEX trade mechanism, as quoted by the IRNA news agency.

Before the success of the first transactions, Iran had been critical of the feasibility of the mechanism, urging the EU to make INSTEX operational to supply Iran with petrodollars.

Iranian President Hassan Rouhani in early July slammed the EU-designed payment channel as an "empty" mechanism.

However, if the INSTEX becomes operational and supplies Iran with petrodollars, it will be acceptable for Iran despite its shortcomings, he added.

The remaining Iran nuclear deal signatories reaffirmed their commitment to the JCPOA and criticized the United States for its unilateral sanctions during the Sunday meeting in Vienna.

At the meeting, China urged the three European countries to expand INSTEX and open it up to third countries, said Fu Cong, director general of the Department of Arms Control at the Chinese Foreign Ministry.

There were tense moments but on the whole the atmosphere was "professional," Fu said.

In a press release published following the meeting, the EU said that "both nuclear commitments and sanctions-lifting are essential parts of the agreement", and participants would "continue discussions at expert level on sanctions-lifting and nuclear issues".

"Participants reaffirmed their strong support and collective responsibility for the nuclear projects (in particular Arak and Fordow) that are an essential part of the JCPOA in order to ensure the exclusively peaceful nature of Iran's nuclear program," according to the EU.

Kremlin spokesman Dmitry Peskov said Russia considers the initiative of the EU on the INSTEX payment mechanism for trade with Iran to be important.

"It is aimed at protecting the interests of European economic companies on the background of illegal attempts to restrict their activities by third countries. And therefore we, of course, monitor the information that comes in (about his mechanism)," Peskov told Sputnik.

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