US sanctions and new economic uncertainties for Iran

The US scrapped the Iran deal in May 2018 and re-imposed sanctions on Iran in progressive stages. The recent designation of the IRGC as a terrorist organization is expected to add on to Iran’s economic woes.

The European states have largely denounced the current US administrations pressure against the Iran deal, and have made various attempts to assuage the deal. One such measure entails carving out an alternate payment mechanism with Iran to circumvent US sanctions. On January 31, 2019- Britain, France and Germany announced a new payment mechanism known as the Instrument in Support of Trade Exchanges (INSTEX). The aim of the INSTEX is to allow European countries and other third parties to continue doing business with Iran. Initially the INSTEX is expected to carry out trade in pharmaceutical, medical devices and agri-food sectors.

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