After the announcement of the special financial mechanism in dealing with Iran by the European countries, which was dubbed INSTEX, an acronym of the Instrument in Support of Trade Exchange, internal divisions and disagreements occurred and this announcement has added more fuel to the already heated differences between the political currents in Iran regarding the implementation of FATF, CFT, SPV and Palermo conventions, due to the linking of the activation of INSTEX to Iran’s accession to those treaties on countering financial support for terrorism and money laundering. This was the most prominent event that attracted the interests of Iranian public opinion, officials, politicians and experts, whom their positions and attitudes can be divided into three sections as follow:

The first is Rouhani’s government and reformists in general. This group believes that the activation of INSTEX by the Europeans is an important step which will give many financial and commercial advantages to Iran in its relations with the European countries and a step that proves the good intentions of the European countries in maintaining the Nuclear Deal and strengthening relations with Iran. This group believes that it is necessary for Iran to join FATF convention on combating terrorism support and money laundering, hence it does not see any problem in the condition put by the Europeans to join this convention in order to activate INSTEX.

The second is the hardliners and the leaders of the Revolutionary Guard. They completely reject this move and see it as an insult to the Iranian nation as it only achieves the Europeans’ interests not Iran’s ones. It is similar to the American sanctions and a tool for exerting more pressure on Iran. This group also refuses Iran’s accession to the FATF convention.

The third is the group that comes in between of the previous two, which sees the activation of INSTEX could provide positive outcomes for Iran, but at the same time calls for caution in dealing with Europe through this mechanism. Moreover, it rejects the European demand that Iran must join FATF before activating INSTEX since they are completely different issues.

On the other hand, Tehran protested the European requirement to activate INSTEX, which allows the transfer of funds to Iran despite US sanctions, with Tehran joining the FATF convention, which Iran has yet to ratify.

In this context, the Iranian ambassador to the United Kingdom, Hamid Baeidinejad, a member of the Iranian delegate to the nuclear negotiations, that Europe is not entitled to put conditions for the implementation of the financial channel. The Vice President of the Iranian Shura Council, Ali Motahri, also criticized the European condition saying that the requirement for the implementation of this mechanism is a kind of interference in the Iranian internal affairs and the Ministry of Foreign Affairs must respond accordingly. Motahari added that these two topics should not be linked to each other. Moreover, Member of the National Security and Foreign Policy Committee of the Shura Council, Alaeddin Boroujerdi, considered that the new European condition is unacceptable and said that Iran’s accession to FATF is taking its legal course and is being studied in the Expediency Council.

the deputy secretary-general of the Islamic Coalition Party, Muhammad Ali Amani, stressed that the mechanism of INSTEX is incompatible with the economic and political independence of the country as well as the rights of the Iranian people. Amani confirmed that his party is opposing this project, and will issue a statement on this, as well as criticized European countries and accused them of not complying with the full commitment to maintain the Nuclear Deal.

Hossein Shariatmadari, the managing editor of the Iranian conservative newspaper Kayhan, said that INSTEX is a tool to deceive and insult the Iranian nation and aimed at ensuring Western interests at the expense of the Iranian national interests.

Some in Iran say that there is still speculation about the effectiveness of this European financial channel, as it is believed to be a symbolic move aimed at maintaining the Nuclear Deal with Tehran.

As for this step, INSTEX is supposed to be a private financial channel to transfer funds to Iran despite US sanctions in order to facilitate Iran’s dealings with the European companies. The European mechanism faces an objection by the United States, which has pressed to repeal or restrict this mechanism which the Europeans say that it will initially be used to sell food, medicine and medical equipment to Iran, although it can be expanded in the future. Analysts believe that there is no consensus among EU members on the new mechanism, and for now it only includes Germany, France and Britain.

The independent opinion in Iran, however, which is formed mostly of experts and specialists, confirms that the positions of the Iranian politicians and activists towards INSTEX are based on their political tendency and not according to the interests of the country at all. It is even came as a result of the partisan hostilities, contradictory trends and personal and partisan interests regardless the interest of the country and this European step came after Iran’s begging for any political move, through which the Iranians seek to damage the relations between Europe and the United States, which can be described as political stupidity and lack of sense in the International politics, as this step achieves 8 benefits for the European countries which is in turn an American one as well, while Iran is the loser party economically and politically.

This opinion confirms that Iran is walking to the abyss and that if the current policies continue, Iran will not celebrate the 41st anniversary of the victory of the revolution in Iran. The problem is not in INSTEX or Iran’s accession to the FATF, the real problem is in the Iranian regional interferences and the dominance of the military and security apparatuses on the country politically, economically and socially, and exposing the country’s political, economic and financial resources and capabilities to crises and dangers by insisting on supporting terrorism and destabilizing the region to apply the Iranian expansionist project in the region.

Al Mezmaah Studies & Research Centre

February 5, 2019