INSTEX: EUROPE SETS UP TRANSACTIONS CHANNEL WITH IRAN
- The United Kingdom along with other European nations such as Germany and France on January 31, 2019 set up a new transaction channel called ‘INSTEX’ that will allow companies to continue trading with Iran despite US sanctions.
- INSTEX is short for ‘instrument in support of trade exchanges’. The payment channel will create a possibility for the European countries to conduct business transactions with Iran. While the move was praised by Iran, it drew a warning from the United States.
- The information was shared by German Foreign Minister Heiko Maas after a meeting with European counterparts in Bucharest, Romania.
- The European nations hope that the special payment system will help save the Iran nuclear deal by allowing Iran to keep trading with EU companies despite US re-imposing sanctions after President Donald Trump abruptly quit the accord in 2018.
- The system was launched by the three countries, which are the European signatories to the 2015 deal that curbed Iran’s nuclear ambitions in return for sanctions relief. The system was in preparation for months.
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