There has been yet another signal from Islamic Republic officials that Tehran does not pin high hopes on the trade mechanism offered by European powers to help Iran continue trade, despite U.S. sanctions. The spokesperson of Iran’s foreign ministry, Bahram Ghasemi (Qassemi) told the local Young Journalists’ Club website on March 19 “You should not have hopes for the trade mechanism to do miracles”.
Radio Farda in the article Iran Says 'Don't Expect Miracles' From European Trade Mechanism notes, that Germany, France and Britain offered the Instrument for Supporting Trade Exchanges (INSTEX) to Iran in January to help maintain limited trade, after the U.S. reimposed tough economic sanctions on Iran in 2018. The sanctions specially hit Iran’s banking sector hard, which practically cut off most trade, as transferring funds becomes impossible. Per Fischer, a German banker, heads INSTEX, which is based in Paris.
Ghasemi also said: “We have not been waiting for Europeans, and we have pursued other mechanisms with other countries”. He added that countries such as China, Turkey, India and Russia have been mulling over trade with Iran using their national currencies.
The problem with such schemes is that trading in local currencies deprives Iran of receiving U.S. dollars and other major currencies, which are needed to sustain a variety of imports vital for economic domestic activity.
In recent days multiple Iranian officials have expressed pessimism about INSTEX and the ability or willingness of Europeans to initiate serious trade with Iran. Currently most European companies are staying away from doing business, as they fear court cases and fines on their subsidiaries or operations in the United States.