European countries agree to trade with Iran, skirt U.S.

Madison Mooney, The Carroll News

When President Donald Trump made the decision, last year, to withdraw the U.S. from a 2015 international nuclear accord with Iran and threatened to impose heavy sanctions on any country that violates these sanctions, Germany, France and Britain came up with a creative way to preserve their relationship with Iran.

The three countries wished to avoid a conflict with Trump, but expressed the belief that the benefits from the accord with Iran were not things they were willing to abandon, according to The Associated Press.

In exchange for trade relationships and economic benefits, Iran has agreed to stop its development of nuclear weapons this year.

Unwilling to abandon this nuclear agreement and valuing their trade relationships with Iran, these nations created the “Instrument in Support of Trade Exchanges,” also known as INSTEX.

It is a barter-type system that imports goods from Iran and exports goods from the three European countries with a clearinghouse in place so that there are no technical violations of U.S. sanctions.

The foreign ministers of Germany, Britain and France insist “INSTEX will function under the highest international standards with regards to anti-money laundering, combating the financing of terrorism and EU and U.N. sanctions compliance” and, as can be expected, many details need to still be worked out and “address all the technical and legal aspects required to make this vehicle operational.

“INSTEX is to be overseen by a German banker with the headquarters located in Paris.”

Just as European nations do not wish to violate U.S. sanctions or damage relations with  Trump, they also do not wish to incur repercussions from a frequently unpredictable Iran.

As a result of the U.S. withdrawal from the 2015 accord, Iranian officials have threatened to violate the accord themselves and begin enriching uranium again.

Motivated by a strong desire to suppress the threat of a fully nuclear capable Iran, many European countries feel that keeping Iran’s nuclear program in check is vital; however, if INSTEX is effective in working around the U.S. sanctions, France, Britain and Germany are hopeful that other European nations will join.

Reacting to the formation of INSTEX, the U.S. State Department said in a statement, “As the president has made clear, entities that continue to engage in sanctionable activity involving Iran risk severe consequences that could include losing access to the U.S. financial system and the ability to do business with the United States or U.S. companies.”

Upon the U.S.’s withdrawal from the accord, many of Europe’s biggest companies stopped all trade with Iran, fearing sanctions.

Belgian Foreign Minister Didi Reynders insisted, “The most important thing is to show our American colleagues that we are moving in the same direction on a whole series of issues, such as ballistic missiles or Iran’s regional influence, but that we do have a difference of opinion on the nuclear agreement” and added, “I hope we can also find a solution.”

Iranian Foreign Minister Mohammad Javad Zarif insisted that the formation of INSTEX is a “long overdue first step” to preserve the nuclear deal and insists that Iran is “ready for constructive engagement with Europe.”

Editor’s Note: Information from The Associated Press was used in this report.