05 Feb 2019
France, Germany and the United Kingdom (E3) have announced the creation of a new platform aimed at facilitating legitimate trade between European firms and Iran, which will operate under the ‘highest standards’ of financial crime compliance, officials said.
Called INSTEX SAS (Instrument for Supporting Trade Exchanges), the special purpose vehicle will support ‘legitimate’ European trade with Iran, focusing initially on the sectors deemed to be ‘most essential’ to Iranians, such as pharmaceutical, medical devices and agri-food goods.
“INSTEX will function under the highest international standards with regards to anti-money laundering, combating the financing of terrorism (AML/CFT) and EU and UN sanctions compliance. In this respect, the E3 expect Iran to swiftly implement all elements of its FATF action plan,” said a British Foreign Office statement.
The new operation comes weeks after Iran reportedly approved an anti-money laundering bill, after alleged resistance from hardliners to implement the measures.
For years the Financial Action Task Force (FATF) urged caution against banks dealing with Iranian firms because of poor anti-money laundering concerns. Iran has also been accused of having lax counter terrorism financing controls.
Following the JCPOA nuclear deal which removed sanctions, a number of European firms ventured into business relationships in Iran, but many withdrew after US President Donald Trump re-imposed the measures.
The EU, a JCPOA signatory, has since sought to find ways to allow European firms to legitimately skirt US sanctions and deal with Iran, but indications are firms fear falling foul of US regulators despite these efforts, and have held back.
The E3 said INSTEX aims in the long term to be open to economic operators from third countries who wish to trade with Iran.
“Registration is a big step, but there is still more work to be done. The E3 are working closely to address all the technical and legal aspects required to make this vehicle operational. That includes work with Iran to establish necessary counterpart structures,” said British Foreign Secretary Jeremy Hunt.
“The Iran nuclear deal remains central to international efforts to halt nuclear proliferation and is crucial for the security of the region. But we are clear, this commitment does not in any way preclude us from addressing Iran’s hostile and destabilising activities.”
Advance your CPD minutes for reading this article, by signing up and using the CPD WalletFREE CPD Wallet