The European Union announced on Friday that its financial settlement mechanism known as INSTEX set up to allow trade with Iran despite US penalties had become operational, with Iran’s envoy on the nuclear deal later confirming that the system was working and transactions were already taking place.

Iran’s ambassador to the United Nations Takht Ravanchi has compared the European payment mechanism, designed to continue trading with Iran and circumvent US sanctions, to a “beautiful car without fuel”, according to the Islamic Republic News Agency (IRNA).

Ravanchi blasted the Europeans for having done nothing “tangible” since the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May 2018, adding that “we can’t keep our end of the bargain unilaterally and not benefit from it”.

Ravanchi’s comments echoed remarks by the Iranian Foreign Ministry, which said that Tehran will take another decisive step in reducing its commitments under the deal, if the EU’s Instrument in Support of Trade Exchanges, or INSTEX, does not meet its requirements.

The statements come shortly after the EU officially announced late Friday that INSTEX had been made “operational and available to all EU Member States and that the first transactions are being processed”.

INSTEX was set up by the EU to facilitate trade between European companies and Tehran in the face of US secondary sanctions earlier this year, but Iran has consistently slammed the mechanism as insufficient at this stage. EU member states have argued that INSTEX will initially deal with food and medicine, while the Islamic Republic has sought oil trade to be included.

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