European Union launches venture to trade with Iran despite US sanctions

On Friday, a statement from the European Union announced that a new system to bypass US sanctions on trade with Iran had been launched.

INSTEX, the Instrument in Support of Trade Exchanges, is now operational for all member states of the EU. The system functions as a clearing house for trade between EU businesses and Iran, allowing trade to be conducted without direct flow of euros to Iran or rials to the EU.

Initially, INSTEX will only process trade in non-sanctioned goods such as food and medical supplies. However, future expansion of the system into those goods the US does sanction may spark conflict.

The idea behind INSTEX is essentially to force an all-or-nothing response by the US to trade with Iran, on the principal that even the current administration would be hesitant to sanction such major trading partners as Britain, France, and Germany altogther.

The US has vowed to continue its campaign to pressure Iran via sanctions, however.