US Official Warns Users of European Financial Mechanism for Trade with Iran

Gordon Sondland, the US ambassador to the European Union, has warned against the use of the European financial mechanism known as INSTEX for trade with Iran. In an interview published on Thursday, Sondland stated that the United States would impose sanctions on those who use the financial mechanism for purposes other than humanitarian cooperation. The US ambassador emphasized that they would find and sanction these individuals, preventing them from trading with the US. Sondland further noted that the US threat implies that the financial mechanism will exist, but no one will use it. He also assessed the creation of INSTEX as an action by European countries to save the nuclear deal with Iran. The three European countries involved in the nuclear talks with Iran, namely Germany, France, and the UK, announced on Thursday, February 11, the official registration of the special financial mechanism for trade with Iran under the name INSTEX (Instrument in Support of Trade Exchanges). Iran and six world powers, including the US, reached a comprehensive agreement to resolve Tehran's nuclear program after two years of negotiations in July 2015, which not only halted some of Iran's nuclear activities but also suspended many of the nuclear sanctions imposed by the US and the UN Security Council against Tehran. Donald Trump has been a staunch opponent of this agreement since his presidential campaign in 2016, describing it as 'the worst deal ever.' The US withdrew from the JCPOA on May 8, citing 'violations of the spirit of the agreement,' ballistic missile activities, and Iran's negative role in the Middle East. Following this decision, Washington reinstated the suspended sanctions on Iran in August and November. The European financial mechanism has also elicited reactions in Iran. Opponents of President Hassan Rouhani's government claim that Europe has accompanied it with conditions regarding anti-money laundering bills that are unacceptable. Judiciary Chief Sadegh Larijani stated on Monday, February 15, that Europe has set 'two humiliating conditions' for implementing the financial mechanism with Iran. According to Larijani, the acceptance of the Financial Action Task Force (FATF) regulations and negotiations regarding Iran's missile program are the two European conditions. Meanwhile, Hamid Baidi Nejad, Iran's ambassador to London, tweeted that in the statement from these three countries, the implementation of FATF regulations is mentioned as an 'unwritten condition,' but as an 'expectation' from Iran, which 'is due to the interference of the banking system in payments.'