France, Germany and Britain set up financial mechanism to avoid US sanctions against Iran

France, Germany and Britain have set up a financial mechanism designed to avoid US sanctions against Iran and keep the 2015 nuclear deal afloat.

Instex, which stands for “instrument for support of trade exchanges”, was registered this week, and will act as a proposed payment channel from Europe to Iran, and vice versa. It will not be fully operational until later this year. Iran will be expected to established a parallel organisation. If the scheme works, it is likely to be most useful to small and medium-sized firms with no links in the US.

Through the Instex trade vehicle they hope to assert European economic sovereignty in the face of Washington’s determination to impose its foreign policy on Europe.

The Guardian reports that the strategy would initially focus on trying to ease the flow of humanitarian supplies to Iran, the German foreign minister, Heiko Maas, said. Such supplies, including medicines and foodstuffs, are not supposed to be subject to US sanctions.

Eventually, the plan is for the vehicle to expand to allow European firms to trade more freely with Iran in a range of goods, including those subject to US sanctions, the EU foreign affairs chief, Federica Mogherini, said.