November 01, 2019
Iran has made one transaction, and only one, through the European system set up months ago to promote trade between Iran and Europe.
In an interview with Al-Monitor, the governor of the Central Bank, Abdolnasser Hemmati, said that one purchase was made by Iran of “medical equipment for one of the provinces…. After that, no transaction has been performed.”
He didn’t say when the medical equipment was bought, or by which province. Europe has said nothing about any transactions.
Asked why there have been no more transactions if the first one worked, Hemmati said, “Because they [Europeans] didn’t deposit any money into INSTEX,” the European name for the system, Instrument in Support of Trade Exchanges. The system depends on one side putting cash into the system so the other side can buy something. The cash on deposit at one end pays for the goods ordered from the other end, with no money moving through the international banking system.
Hemmati said, “We told the Europeans that they should establish a credit line based on a pre-purchase agreement or make an outright purchase of our oil. Nonetheless, it seems that the United States has not allowed them, and the Europeans claim that, still, the United States is not letting them do so. My feeling is that the Europeans lack determination to act independently.”
The one transaction conducted so far involved medical goods, which are officially exempted from US sanctions—although insists the US blocks medical sales, despite the fact that Iran continues to import medical goods. There was no need to use the INSTEX system since Iran could have bought the goods directly and paid for them through normal banking procedures.