3 European Nations Create Firm To Trade With Iran, But Will Anyone Use It?
This month, the European Union imposed its first sanctions on Iran since the nuclear deal in reaction to the plots and to missile testing. The bloc also added two Iranian individuals and an Iranian intelligence unit to its terrorist list.
In Bucharest on Thursday, Belgium’s foreign minister, Didier Reynders, said that it was “essential we show our American colleagues that we are going in the same direction as them on a series of issues such as ballistic missiles and Iran’s regional activities.”
Asked about the new barter company, Mr. Reynders said that “at the end of the day, it will be companies that decide whether or not they want to work in Iran, bearing in mind the risk of American sanctions.”
Instex was originally conceived as a way for Iran to barter gas and oil exports in return for European goods. But given that most large companies have significant business in the United States, very few — if any — are likely to use the trading mechanism for fear of incurring Washington’s wrath.
But the financial mechanism could make it easier for smaller companies with no exposure in the United States to trade with Iran and could promote trade in medicine and food, which are not subject to sanctions. European diplomats say that, in the beginning, the concentration will be on goods that are permitted by Washington, to avoid an early confrontation.
In an emailed response, Doug Davison, a sanctions expert at the law firm Linklaters, said there remained “two important open and interdependent questions: whether such a process will draw any users, and thus have the potential to be effective, and whether the U.S. will take steps in response.”
Washington’s reaction will be critical, Mr. Davison said. So far, “this administration has shown clearly that it takes the economic sanctions it placed on Iran very seriously, and is willing to back its policy up with action, including sanctioning noncompliant non-U.S. parties.”
He added, “U.S. government officials have said that parties either choose to do business with Iran or the U.S., but not both.”