Europe launches trade vehicle to bypass US sanctions against Iran and salvage nuclear deal while Washington threatens ‘severe consequences’
- Washington has warned the EU against trying to sidestep its sanctions on Tehran
- Iran cautiously welcomed the news as a promising first step
Britain, France and Germany on Thursday launched a trade mechanism to bypass US sanctions on Iran, drawing praise from Tehran – and a warning from Washington.
Brussels hopes the long-awaited special payment system will help save the Iran nuclear deal by allowing Tehran to keep trading with EU companies despite Washington reimposing sanctions after US President Donald Trump abruptly quit the accord last year.
The three countries – the European signatories to the 2015 deal that curbed Tehran’s nuclear ambitions in return for sanctions relief – launched the device, which has been in preparation for months, at a meeting of EU foreign ministers in Bucharest.
Iran cautiously welcomed the news as a “first step” but US officials dismissed the idea that the new entity would have any impact on efforts to exert economic pressure on Tehran, and fired a fresh warning at anyone thinking of trading with the Islamic republic.
While the new institution, called INSTEX – short for Instrument in Support of Trade Exchanges – is a project of the three governments, it will receive the formal endorsement of all 28 EU members.