STFI, INSTEX keen on conducting pilot trade exchange: CEO
Tehran, President of the STFI, the Iranian mirror company for the European INSTEX, says the two financial entities are keen on carrying out a pilot trade exchange, adding that the Iranian and European financial and trade standards need to match each other first before any transaction is done.
In the framework of INSTEX, the Iranian goods are exported to Europe and the revenues gained are kept in a certain account that are used to buy European goods when we order the payment," Ali Asqar Nuri, CEO of the Special Instrument for Trade and Financing between Iran and Europe (STFI) was cited as saying by Iran newspaper.
He said a pilot trade exchange is expected to be conducted between Iran and Europe.
However, he didn't give more information about when exactly the deal will go through.
All these processes have been defined, but doing them all is very complex, he cautioned, explaining that difference in exchange rates between imported and exported goods makes accounting procedures very difficult.
The former banker at the private lender Iran Zamin Bank noted that mechanisms and technical issues to carry out trade and financial exchanges are being devised, stressing the fact that internal and international standards for trade and financial dealings should be the same.
Currently, trade and financial transactions in the world are carried out according to clear standards and mechanisms and that INSTEX, as a mere economic enterprise, is not an exception to this fact, Iran newspapers cited Nuri as saying.
Instrument in Support of Trade Exchanges (INSTEX) was established by Germany, France and the UK late January in response to the US reimposition of unilateral sanctions on Iran. Former German banker Per Fischer the company's president.
Nuri ruled out that Europe be pushing Iran to approve outstanding Financial Action Task Force (FATF) bills before doing trade within INSTEX, saying the company is avoiding politicizing the issue and is working to get those international standards in place.
When we speak with Mr Per Fishcer and other members, they don't even speak about the FATF and are doing what they have to do economically, emphasized Nuri.
The former private banker pointed the finger at constant sanctions that have barred Iranian banks from updating their international standards. This is the most important barrier in the way of cooperation between Iranian banks and their foreign counterparties, the banker said.
INSTEXSTFI mechanism looks like barter trade, which has deep roots in Iran even before the 1979 Revolution. Asian Clearing Union (ACU) was established in 1974 with its HQ in the Iranian capital Tehran.
Iran, India, Iran, Nepal, Pakistan, and Sri Lanka were the first countries to joint the union. Bangladesh and Myanmar were the sixth and seventh signatories to the agreement. Bhutan and Maldives signed the Agreement in 1999 and 2009, respectively and the number of the ACU member states currently stands at nine.
For example, that year Iran exported bitumen to Bangladesh and imported knauf in return and both countries' central banks cleared the transactions despite difference in exchange rates.
Source: Islamic Republic News Agency IRNA