European countries said Thursday that they have decided to dissolve a system conceived in 2019 to enable trade with Iran and protect companies doing business with it from US sanctions, but only ever processed one transaction.
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The German and French foreign ministries said the 10 shareholders of INSTEX — Belgium, Germany, Finland, Denmark, France, the Netherlands, Norway, Spain, Sweden and the UK — concluded that there was no basis to keep it going after Iran persistently refused to work with the institution.
The decision comes at a time when tensions between the West and Iran have increased following Tehran’s crackdown on internal dissent, its supply of armed drones to Russia that have been used in the war in Ukraine, and the de facto breakdown of its 2015 nuclear deal with world powers including Germany, France and the UK.
However, Thursday’s statement said the decision to wind up INSTEX was taken for purely business reasons and independently of other factors.
The complex barter-type system was conceived by Germany, France and the UK in January 2019 after then-President Donald Trump unilaterally withdrew the United States from the nuclear deal and reimposed sanctions. The other parties to the deal were keen to keep it alive.
In March 2020, the German government said INSTEX had finally concluded a first transaction, facilitating the export of medical goods from Europe to Iran.
The statement issued Thursday said that Iran had systematically prevented INSTEX from fulfilling its mandate for political reasons. Tehran only approved that one deal and subsequently blocked further proposed transactions, it added.
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