Important Facts For Prelims
INSTEX Barter Mechanism
- 02 Dec 2019
- 1 min read
Why in News
Six Countries - Belgium, Denmark, Finland, the Netherlands, Norway and Sweden have recently joined INSTEX.
Key Points
- A trade mechanism ‘Instrument in Support of Trade Exchanges (INSTEX)’ was established by France, Germany and the United Kingdom in January 2019 to allow European entities to maintain trade with Iran.
- The mechanism has been designed to circumvent U.S. sanctions against trade with Iran by avoiding the use of the dollar.
- The United States imposed sanctions, after it withdrew from Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), in 2018.
- This Paris-based mechanism functions as a clearing house allowing Iran to continue to sell oil and import other products or services in exchange.
- The mechanism represents continuing commitment of France, Germany and the UK to the JCPOA.
- It has been seen that the system has not yet enabled any transactions.
