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Iran Hopes New Trade Mechanism Ready For Business Within Weeks

Iranians shop at Tehran's Molavi bazaar. The Iranian economy has been hit bard by U.S. sanctions.

Iran says it hopes a new trade mechanism that allows foreign firms to conduct business with Tehran will be up and running within two weeks.

"We hope it will be before the end of the Iranian calendar year," Deputy Foreign Minister Abbas Araqchi told reporters in Vienna, referring to March 20.

Germany, France, and Britain have launched the mechanism, known as INSTEX, to allow financial flows to be sent to Iran that would not violate U.S. sanctions in an attempt to keep alive the landmark 2015 nuclear deal.

The so-called special-purpose vehicle will help European firms with legitimate business interests to use barter techniques to conduct business in Iran.

The plan focuses on areas not targeted by U.S. sanctions and in the beginning will focus "on the sectors most essential to the Iranian population -- such as pharmaceutical, medical devices, and agrifood goods," foreign ministers from the three countries said on January 31.

The three European allies -- who signed the nuclear deal along with the United States, Russia, and China -- have been working hard to keep the accord alive after U.S. President Donald Trump announced in May 2018 he would withdraw from the deal and reimpose sanctions on Tehran.

The EU is backing INSTEX, which stands for the Instrument In Support of Trade Exchanges, but is not directly involved, officials have said. The measures involved are designed to protect European firms from U.S. court action and allow them to recover any financial damages related to the sanctions.

The United States has criticized the plan, with Vice President Mike Pence saying that "the time has come for our European partners to stop undermining U.S. sanctions against this murderous revolutionary regime."

Araqchi said Iran now has a "clearer picture" of how the new vehicle would work and that its managing director would visit Tehran for discussions "very soon."

He added, though, that Iran would be able to assess whether it "can work properly and can produce results, [and] can do payments between Iran and European countries" only when the mechanism becomes fully operational.

With reporting by AFP, AP, and Reuters
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