Abu Dhabi, UAEFriday 24 May 2019

Turkey and Iran seeking trade mechanism to dodge US sanctions

Turkish Foreign Minister Mevlut Cavusoglu said the deal would be similar to Europe's INSTEX agreement

A handout photo from Turkish Foreign Ministry Press Office shows Iranian Foreign Minister Mohammad Jawad Zarif shaking hands with Turkish Foreign Minister Mevlut Cavusoglu after their press conference in Ankara. EPA, HO
A handout photo from Turkish Foreign Ministry Press Office shows Iranian Foreign Minister Mohammad Jawad Zarif shaking hands with Turkish Foreign Minister Mevlut Cavusoglu after their press conference in Ankara. EPA, HO

Turkey is looking into building a new trade mechanism with Iran to avoid US sanctions similar to a programme being set up by Europe, the country’s foreign minister said on Wednesday.

Following talks with his Iranian counterpart, Mevlut Cavusoglu said that Turkey was opposed to the US sanctions reinstated last year after Washington unilaterally withdrew from the 2015 nuclear accord signed by Tehran and global powers. He said that Ankara was looking to triple bilateral trade to around $30 billion (Dh 110 billion).

France, Germany and Britain have opened a new channel for non-dollar trade with Iran to avert sanctions called the Instrument in Support of Trade Exchanges (INSTEX) based in Paris. that allows firms in the trading block to circumvent the US curbs on doing business with Iran. Russia has expressed an interest in joining INSTEX.

Washington's European allies opposed Trump's move to abandon the 2015 nuclear deal, under which sanctions on Iran were lifted in return for Tehran accepting curbs on its nuclear programme.

“Along with the existing mechanisms, we evaluated how we can establish new mechanisms, like INSTEX... how we can remove the obstacles before us and before trade," Mr Cavusoglu told the news conference after talks with his Javad Zarif.

"What is important here is the solidarity and determination between us," the Turkish official added.

Iran has threatened to pull out of the 2015 deal that unless European nations are able to keep the agreement alive. The Europeans have promised to help companies do business with Iran as long as it abides by the deal.

Mr Cavusoglu did not go into details about the new mechanisms but Turkey has a track record of using national currencies in international trade. In October 2017, the Turkish and Iranian central banks formally agreed to trade in their local currencies after using the euro for settlements in the past.

After reimposing sanctions on Iran, Washington granted waivers to eight nations including Turkey that reduced their purchases of Iranian oil, allowing them to keep buying it without incurring sanctions for six more months. But US officials have repeatedly said they want Iranian oil exports reduced to zero.

Presidential spokesman Ibrahim Kalin told reporters in Washington on Tuesday that Turkey expected the United States to extend Ankara's waiver.

Updated: April 18, 2019 12:53 PM

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