June 10, 2019 / 6:30 AM / 16 days ago

German minister upbeat on Iran trade vehicle before Rouhani talks

Iranian Foreign Minister Mohammad Javad Zarif shakes hands with his German counterpart Heiko Maas after the news conference in Teheran, Iran, June 10, 2019. Tasnim News Agency/Handout via REUTERS

TEHRAN (Reuters) - Instex, a European payment system for barter-based trade with Iran designed to circumvent U.S. sanctions, is expected to be ready soon, German Foreign Minister Heiko Maas said on Monday, ahead of talks with Iranian President Hassan Rouhani in Tehran.

Maas is to meet Rouhani and his Iranian counterpart, Mohammad Javad Zarif, as part of a European effort to salvage Iran’s nuclear pact with world powers and defuse rising U.S.-Iranian tension.

“This is an instrument of a new kind, so it’s not straightforward to operationalize it,” Maas told reporters, pointing to the complexity of trying to install a totally new payments system.

“But all the formal requirements are in place now, and so I’m assuming we’ll be ready to use it in the foreseeable future.”

In an effort to protect at least some of Iran’s economy from sweeping U.S. sanctions and keep alive a big-power nuclear deal that Washington is about to quit France, Britain and Germany have set up Instex, in the form of a special-purpose vehicle.

The three European Union members have been trying to get Iran to keep its commitments under the deal to cut back its nuclear programme - which Washington distrusts - by helping it to circumvent the trade sanctions Washington has reimposed.

They want Instex to meet norms for legitimate financing set by the Paris-based Financial Action Task Force, even though Iran as a country is not yet fully compliant with them.

On a weekend stopover in Iraq en route to Tehran, Maas warned of the dangers that conflict with Iran posed for the entire Middle East, saying the Europeans were convinced it was worth trying to keep the nuclear pact with Iran.

Reporting by Sabine Siebold; Writing by Michael Nienaber; Editing by Clarence Fernandez

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