Iran Regime’s Internal Disputes Over EU Efforts to Circumvent U.S. Sanctions

By Sedighe Shahrokhi

INSTEX is the new payment channel that has been set up by the United Kingdom, France and Germany. The purpose is to circumvent U.S. sanctions and to help continue trade with Iran. The process is moving forward despite warnings from the United States that it advises against such actions.

INSTEX – “Instrument in Support of Trade Exchanges” – has caused controversy thus far and European officials have been accused of appeasing the Iranian regime.

European officials have said that they are committed to the nuclear deal and will not jeopardise their relationship with Iran. However, the United States has criticised the measure that will allow European countries to continue trade with Iran, undermining the U.S. sanctions that were re-imposed in order to curb Iran’s belligerent and terrorist activities that threaten the Middle East.

The Trump administration has said that the U.S. would be closely monitoring developments with the system. The State Department warned: “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 US companies.”

European officials have said that INSTEX will initially be used to sell medical devices, medicine and food to Iran, but they have not ruled out the possibility of expanding in the future.

The INSTEX issue is starting to cause problems within the Iranian regime itself. In-fighting between factions is something that is becoming more and more common over the past few years and different factions compete with each other to discredit their opponents. The regime’s instability is clear for all too see and signifies its weakness.

Mohammad Reza Tajik, a former Iran regime’s diplomat, said that conceding to Europe is what the regime should do, especially considering the state of the country’s economy and the international sanctions that are having the effect that the United States intended. He said that European efforts are a lifeline to the regime because the economy relies on its oil income. He said that the European measure can “become a launchpad” for the country to “exit the pressure conditions”.

However, the chairman of Iranian parliament’s security commission, Heshmatollah Falahatpisheh, said that Europe’s measure is too little, too late because it cannot let Iran sell oil. The deputy of the national security and foreign policy commission, Abolfazl Hassan-Bigi, also agreed with this, saying that Iran should not get its hopes up because the EU does not have the will, or the authority, to implement its measure and keep up on its promises.

Iran regime’s President Hassan Rouhani has said that INSTEX presents Iran with an opportunity to get out, to some extent, of the economic hole that it finds itself in.

The Iranian regime is under pressure, not just on an international scale, but very much so on the domestic front, and it is quickly running out of options. It seems that it has got to rely on the EU even though it is not going to be much of a help.

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