Belgium joins EU mechanism to trade with Iran

Belgium joins EU mechanism to trade with Iran

The parliamentary foreign affairs commission on Tuesday approved a draft resolution supporting Belgium's membership of INSTEX, the European special purpose company that is required to allow trade with Iran despite American sanctions.

In 2015, an agreement was reached between Iran and the five members of the UN Security Council as well as Germany to oversee the Islamic republic's nuclear-related activities.

The US decided in 2018 to withdraw from this agreement and reimpose sanctions against Iran that had to be introduced progressively in accordance with the deal baptised JCPoA (Joint Comprehensive Program of Action).

The European Union and the other signatories want to pursue the implementation of this agreement without entering into conflict with the United States.

As a result of the extra-territorial effects inherent in Washington's sanctions, companies trading with Iran risk being excluded from accessing the American market.

A compensating mechanism, baptised INSTEX, was therefore conceived to bypass the impediment. It is based on an equalisation between European importers and exporters and their Iranian counterparts. INSTEX is limited to the areas of health and food processing.

A company to operate the mechanism was set up in Paris. Other than Belgium, eight EU countries and Norway have said they are ready to use it.

The federal government, in terms of its day-to-day business, decided to join with a stake in INSTEX but wanted parliamentary approval.

The commission for foreign affairs has given its support with a unanimous vote that did not include that of Vlaams Belang, which was against the deal.

The instigation of the mechanism aims not only to allow companies to do trade with, but also to exert pressure on Iran so that it applies the agreement, the minister for foreign affairs, Didier Reynders, explained.

The Brussels Times

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