EU-Iran first INSTEX deal 'great news' for London market

Europe and Iran have completed their first transaction under the trading mechanism INSTEX, a European special purpose vehicle established last year to help EU companies do business with Iran.

Andy Stevenson of Elborne Mitchell, a London-based law firm active in insurance and reinsurance among other sectors, believes that it is a good news for UK insurers who had been looking for lucrative business and trade opportunities with Iran, particularly in the marine and energy sectors.

INSTEX (Instrument in Support of Trade Exchanges) was designed in January 2019 to provide a non-US dollar, non-SWIFT payment system between EU companies and Iranian counterparts to facilitate mutual trade.

Earlier this week, France, Germany and the UK (the E3) concluded its first transaction, facilitating the export of medical goods from Europe to pandemic-hit Iran.

According to Stevenson, a sanctions specialist at the law firm: “It’s early days but this is potentially great news for the London Market. I’ve been approached many times in recent years by insurers and brokers wanting to do business in Iran and my answer is always that the business isn’t itself sanctioned, but making payments is nigh-on impossible. If the system expands as the EU seems to want it to, it’ll open up a whole new market to UK insurers.”