Iran Economy News INSTEX – A Useless Artificial Respiration for Iran’s Dying...

INSTEX – A Useless Artificial Respiration for Iran’s Dying Regime


The Federal Foreign Office of Germany in a tweet confirmed the first transaction with Iran through the Instrument in Support of Trade Exchanges (INSTEX) on Tuesday.

By Pooya Stone

On Tuesday, 31 March, Sputnik News Agency announced that the three European countries have approved financial operations with Iran based on the Instrument in Support of Trade Exchanges (INSTEX).

The United Kingdom, Germany, and France have formally claimed that they have shipped the medicinal products to Iran, with the confirmation of the first financial transaction through the INSTEX mechanism with Iran.

The INSTEX, or Instrument in Support of Trade Exchanges with Iran, was created in January 2019 by France, Germany, and the United Kingdom to facilitate non-dollar trade with Tehran. The purpose of creating Europe’s INSTEX was to provide the Iranian regime with the opportunity to enjoy the benefits to bypass US sanctions and is a special payment system which will help to save the Iran nuclear deal by allowing Tehran to keep trading with EU companies despite Washington re-imposing sanctions. INSTEX would receive payments from companies that want to trade with Iran, either by receiving waivers for oil imports or permissible trade in goods like food and medicine. As a result, there would be no direct transfer of funds between Iran and European companies. This would theoretically insulate firms from U.S. penalties.

US Secretary of State Mike Pompeo said during an official visit to Germany last summer that the United States had no problem with INSTEX sending humanitarian goods to Iran or goods that are not subject to sanctions.

But the main problem is that the mullahs’ regime does not need much of a medical cargo to treat coronavirus infected patients, but rather to cure its pain while becoming dollar that can provide modern equipment to suppress people and pay for security guards and plainclothes. And the rest of the money would be used as the loan of its proxy groups in the middle east in Iraq, Syria, Lebanon, and Yemen. And to expand its influence in the world by terror acts that need money.

Protecting the regime with fear and chill

Anna Sauerbrey, contributing opinion writer for The New York Times, on 10 February 2020 in an article titled, ‘The Failure of Europe’s Feeble Muscle Flexing’ wrote about the uselessness of the INSTEX, “Because of this instrument — weedy and wonky though it maybe — is a prime example of the futility of Europe’s struggle for strategic autonomy from the United States.”

In support of this interpretation, the German authorities described the deal as less than one million euros and concurred that the deal did not violate US sanctions because the export to Iran was a German company producing medical goods.

The name of the company and other exporting companies to Iran are also to be kept confidential and are among the state secrets, such as the banks that partner with INSTEX. Cooperation with INSTEX may be subject to US sanctions.

In contrast, no agreement has yet been reached on the import of goods from Iran into the EU, as defined in INSTEX.

Anna Sauerbrey on this issue said, “Under constant American diplomatic pressure and threats, INSTEX has gone from being promoted as the linchpin of an independent European foreign policy to a company sending less than a million euros’ worth of humanitarian aid to Iran in half-secrecy. The once-defiant posture — Europe proudly standing up to a bully — is long gone.”

The author of the article went on to refer to the US President’s order to kill Qassem Suleimani, the commander of the Quds Force, which was seen by many European experts as a risky decision that could lead to another war and said, “This, as well as the bitter lessons learned from the Instex experiment, illustrate once again how hard it is to run an independent foreign policy in a dollar world in which the United States is weaponizing trade. European policymakers have been left with both a sense of urgency and a feeling of utter impotence. Not a comfortable pairing.”

European leaders believe the author of this article has nothing more than to demand a reduction in tensions on both sides.

Falling oil prices and bankruptcy


The Iranian regime is feeling the worsening situation of the oil market than anywhere, as oil experts say, its economy is on the brink of bankruptcy and the regime’s President Hassan Rouhani was forced to beg the regime’s supreme leader Ali Khamenei to open the door of the National Development Fund, at least for $1 billion.

The Russian-Saudi conflict and the oil war and the regime’s roam because of this situation should also be mentioned. This has caused the fall of the oil price. To this situation, the crisis created by the coronavirus outbreak must also be added.

Said Leylaz, a regime economist, said: “The crisis caused by the virus is affecting the economic services sector. My initial estimate was that if this crisis persists by May, it will reduce between 2 to 3 percent of Iran’s GDP, which is $20-$30 billion. Today, I still have to wait and see if this crisis goes on or not. I believe that we will be involved in the virus at least until the end of May and that there will be a public bankruptcy, especially in the non-governmental and small business sectors.” (State-run daily Asr Iran, 28 March)

Far and near perspective

Farshad Momeni, an economic expert, also says: “The Iranian economy not the sanctions or the coronavirus making fragile, but the country’s decision-making system. Before coronavirus and the return of US sanctions affected the state, we had a fragile economy, an extremely unequal society, and a totally unstable environment. Prior to the advent of the coronavirus for the first time, all investments made in the Iranian economy were not even able to offset depreciation, and we are facing a serious investment crisis that is increasing our vulnerability in an unconventional way.” (ILNA, 31 March)

Hatam Ghaderi, one of the regime’s experts about the regime’s situation, said: “In general, the level of rationality and social understanding of our rulers, or the use of the tools they have, is lower than the average of society and its rulers lack the management and efficiency needed to govern the society, especially in the current complex conditions, and at best only able to managing simple communities with superficial quality, not managing a country in complex global conditions and a crisis-ridden region called the Middle East.

“Our government is a government that is not suitable for this time and place, it was formed based on a number of misconceptions and persisted by insisting on these assumptions. It is now almost 99 years since the third coup of March 1920. We have had Reza Khan, Mohammad Reza, Mr. Khomeini, and Mr. Khamenei in the Iranian political leadership scene for the past 100 years, but we are standing here now.

“Despite all the social upheavals, we have been somewhat distant from some of the slogans given in the constitution because there was no social opportunity to interact with the people and distribute power properly. Velayat-e Faqih wants to be present everywhere and to decide without accepting responsibility. (Didar News, 31 March 2020)


These sentences are showing very well the deadlock of the Iranian regime, and the failure of any foreign support of the regime to overpass the sanctions such as the INSTEX. The truth is that the regime is itself responsible for its situation, not any sanctions or viruses. And as the regime’s specialist said, the prospects for the regime’s future are very dark and foggy.

  • Add to Phrasebook
    • No word lists for English (USA) -> Persian…
    • Create a new word list…
  • Copy

Latest news

Iran’s Prisons: A Coronavirus Vector in 2020

Iran’s unsanitary and overcrowded prisons were a vector for infections long before the Covid-19 outbreak, so everybody could plainly...

Why Iranians Don’t Trust the Ayatollahs?

While the Iranian government has been surrounded by enormous crises and dilemmas inside the country and abroad, officials inevitably...

U.S. Designates Two Pillars of Khamenei’s Economic Empire

On January 13, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two key entities...

Iranian Authorities Insist on Corporal Punishments

While international law bans corporal punishment, like flogging and amputation, branding them as torture, it’s commonly used in Iran...

Iran’s Poor Economic Outlook

The Iranian economy is shrinking and showing negative growth, according to statistics from the latest World Bank report. They...

Power Outages in Iran as China Extracts Its Bitcoins

In coordination with a ‘military institution’ in Iran, the Chinese use Iran’s low-price electricity to extract bitcoin while many...

Must read

U.S. Official Skeptical of Reported Iran Deal

Reuters: A U.S. official reacted skeptically Tuesday to reports...

Clinton unsure about more U.S. sanctions on Iran

Reuters: U.S. Secretary of State Hillary Clinton said on...

You might also likeRELATED
Recommended to you