The Instrument in Support of Trade Exchanges (Known as INSTEX) is a Special-purpose Vehicle (SPV) established by three European major powers ( France, Germany and the UK) in order to support legitimate trade transactions between European companies and Iran. After US withdrawal from JCPOA, many European companies have faced serious problems in order to carry on their business activities in Iran. The major obstacle was Fund transactions and payments which most the international banks refused to handle in fear of facing US sanctions.
European signatories of JCPOA has offered the establishment of INSTEX as an alternative payment channel which can be utilized for payment settlement services. However, it will remain the European companies’ decisions to whether or not use this facility to conduct their trade activities with Iran. US officials have announced publicly that companies have to choose the risk of trading with Iran or having free access to the US market. Although it seems like a very hawkish stance, it is still giving the business executives and analysts a hard time to consider all risks and consequences of doing business with Iran and to make a rational and viable business decision.
On 30th April 2019, the Iranian mirror company of INSTEX registered officially in Tehran. Such a move indicates that the above-mentioned mechanism is set to be operational despite all delays and doubts. It is so early to predict how practical this process would be and how many transactions would be handled through INSTEX, but significant point is that Europe is still continuing its commitments to JCPOA and serious talks are still ongoing in order to take meaningful steps towards easing Europe-Iran trade. Iran has got so many untouched investment and development potentials and these potentials have been studied by International companies and Iran is recognized as Fast-growing emerging market. Such opportunities cannot be ignored easily by International Corporations.
Read More :
https://www.dw.com/en/instex-europe-sets-up-transactions-channel-with-iran/a-47303580
