Ghasemi: Don't Expect INSTEX to Work Miracles

The spokesperson of the Iranian Foreign Ministry emphasized that the Islamic Republic is not waiting for the European financial mechanism (INSTEX) and is also pursuing trade with the national currencies of other countries, stating, "Don't expect this financial channel to work miracles." Bahram Ghasemi said in an interview with Young Journalists Club on Tuesday, March 19, that "we have not waited for the Europeans regarding the financial mechanism and have pursued specific mechanisms with other countries." He stressed that "don't expect this financial channel to work miracles." On January 31, three European countries announced the official registration of a special financial mechanism for trade with Iran but conditioned its operation on "further work." INSTEX, short for the English phrase "Instrument in Support of Trade Exchanges," is a newly established entity by Germany, France, and Britain to mitigate the impact of U.S. sanctions against Iran. Members from France and Germany are present in its supervisory board, and it is chaired by Per Fischer, the former head of Commerzbank Germany. Iranian officials have criticized the delay in the implementation of the European financial mechanism, but at the same time, there are opponents of this mechanism among Iranian officials. Meanwhile, Heshmatollah Falahatpisheh, the head of the National Security and Foreign Policy Commission of the Parliament, stated on March 17 that INSTEX does not meet all of Iran's expectations. Mr. Falahatpisheh emphasized that "many European countries are still hesitating to join INSTEX" and that "only Germany, France, and Britain are seeking to implement the INSTEX mechanism." Iranian officials have previously announced that they will use their own methods for financial transactions under sanctions, especially through exchanges with the national currencies of neighboring countries and other trading partners. Meanwhile, the spokesperson of the Iranian Foreign Ministry said that "in the past two years, important countries like Russia, China, Turkey, and India have been examining interactions in foreign sectors using national currencies instead of foreign currencies." Mr. Ghasemi also added that if the region becomes "stable," the idea of a "common currency unit" in the region could be considered in the long term. The idea of trading with national currencies has emerged while, during the previous round of sanctions against Iran before the JCPOA, the money from Iran's oil sales was blocked in some countries like China, India, Japan, and South Korea. At the same time, some countries like India and China committed to paying for oil purchases from Iran in rupees and yuan, but Tehran had to spend this income on buying goods from these countries, which, according to economic experts, were of low quality. Yahya Al-Ishaq, the head of the Tehran Chamber of Commerce, stated in 2014 that Iran has "about $100 billion of frozen currency" in countries like China, India, and Japan, but "cannot quickly use them."