TEHRAN – In what marked the end of a protracted era of deceit, a European company set up to mitigate the impact of U.S. economic sanctions was dismantled quietly after failing to achieve its goals.  

The company, officially known as the Instrument in Support of Trade Exchanges (INSTEX), was liquidated at the end of January this year after being dormant for a long period of time. 

The controversial history of INSTEX dates back to the heady days of 2019 when France, Germany, and the UK - collectively known as the E3-, were trying to rein in a Trump administration bent on dismantling the 2015 Iran nuclear deal, formally called the Joint Comprehensive Plan of Actions (JCPOA), through blanket economic sanctions that ran counter to the lofty promises envisioned in the terms of the JCPOA.

In May of 2018, then-U.S. President Donald Trump unilaterally pulled the U.S. out of the Iran nuclear deal, reimposing sweeping economic sanctions against Iran with the aim of choking off its economy. Thar flagrantly violated the JCPOA and elicited strong criticism from Iran, which lambasted the E3 parties for their inaction. In order to address Iran’s grievances, the E3 came up with the idea of INSTEXT. Thus began the story of a mechanism that miserably failed in fulfilling its mandate. 

At some point, INSTEX was thought to be used for facilitating Iran’s oil sales and the flow of oil revenues into the country. Despite extensive talks in this regard, INSTEX proved ineffective. 

But the failure of the mechanism is indicative of many points: 

1- The sad end of INSTEX indicated how Europe is incapable of ensuring its own interests. At the end of the day, the ill-fated mechanism was part of a broad plan to ensure European interests independently from American influence. 

2-  The INSTEX experiment showed Europe’s skewed aims vis-à-vis Iran. This wickedness was further amplified during the recent wave of unrest that gripped Iran since last September.

3- INSTEX was another indication that Europe is not reliable. 

4- INSTEX showed in no uncertain terms that Europe and the U.S. are on the same page when it comes to Iran. 

5- INSTEX was a bitter, yet useful, reminder that Iran’s economic hardships can only be resolved by relying on domestic resources and capabilities. Therefore, any reliance on foreign countries to improve the internal situation is doomed to fail. 

6- The quiet end of INSTEX revealed how Europeans often bamboozle public opinion. INSTEX was announced with great fanfare. But its demise came about very quietly, which aims to shun any critical review of the history of the mechanism. 

7- Last but not least, INSTEX revealed Europe’s modus operandi with regard to managing Iranian public opinion. When INSTEX was rolled out, the Europeans and their like-minded people in Iran launched massive propaganda with the aim of swindling Iranian public opinion. 

INSTEX has now gone but the European inaction toward the Trump administration’s destructive policies will go down in history as a bitter experience that will be remembered by Iranians for a long time. Of course, some in Iran were vigilant right from the start. “I don’t trust these three countries [the E3] and I tell you ‘Do not trust them’,” Ayatollah Seyed Ali Khamenei, the Leader of the Islamic Revolution, said shortly after the Trump administration withdrew from the JCPOA. 

Despite their failure in the INSTEX test, the Europeans continued their unconstructive approach toward Iran. And even worse, they never admitted that their lack of courage doomed the mechanism. In January 2021, Germany blamed the failure of INSTEX on Iran, something that drew a strong response from the Central Bank of Iran. The CBI said Europeans’ lack of courage is the main cause behind the failure of this financial channel.

The CBI’s response came after the German deputy foreign minister claimed that Iran was responsible for the failure of INSTEX because it did not agree to the terms of the deal. The CBI said in a statement on Twitter that INSTEX was designed to save the Joint Comprehensive Plan of Action but it did not work because European governments weren’t able to find a finance conduit and they didn’t have enough courage to maintain their economic sovereignty.

NSTEX was supposed to shape trade relations between Iran and Europe independent of U.S. sanctions, not define it within the framework of sanctions, the statement added.

Back in December 2020, Majid Takht-Ravanchi, Iran’s ambassador to the United Nations, had said that INSTEX has proved ineffective over the past two years.

“The system must have proven its efficiency after two years,” he said, according to Press TV.

After Europe failed to protect Iran’s interests under the JCPOA, Iran began to reduce its nuclear commitments on May 8, 2019 – exactly a year after President Donald Trump withdrew the United States from the nuclear deal and imposed harsh sanctions on Iran.

In April 2021, Iran and the E3, together with the other parties to the JCPOA, began talks to revive the tattered deal. However, more than eight rounds of talks failed to bridge the gap. Iran said it made all the necessary decisions regarding the resuscitation of the nuclear deal but the West was unable to make such a decision. 

Earlier this week, the European Union foreign policy chief, Josep Borrell, once again reiterated that the tattered nuclear deal is still alive and could be revived. 

In an interview with the Chilean Columna Digital outlet, Borrell said the deal has come to a standstill but it is not dead yet. He lamented Trump’s withdrawal from the Iran deal.

Responding to a question on whether the JCPOA is dead, he said, “No, it's up to me to try to keep it alive, but knowing and repeating every day that what is happening in Iran makes it much more difficult.”

This is the second time in less than two weeks that Borrell reiterates that the JCPOA is still alive. In late January, he said although there has been no progress in negotiations to resurrect the JCPOA, the deal is not “dead.”

Iran’s chief negotiator Ali Bagheri Kani has said Tehran is a claimant in talks on reviving the nuclear deal as the United States and the European countries have reneged on their commitments under the agreement.

Bagheri Kani, who also serves as deputy foreign minister for political affairs, said it was the United States and its European allies that should prove their commitment to the agreement and make up for their mistakes as soon as possible. He made the remarks during an interview with Press TV's Insight program on Saturday.

"As of now, we are the claimant and the other side are the Americans. They are the ones who should show their commitment in practice if they want to return to the JCPOA, as they say, and show their commitment to the agreement and the same goes for the Europeans. It is the Europeans who proved their non-adherence to our nation through various excuses during the period when the U.S. withdrew from the JCPOA."