02:40 GMT +317 November 2019
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    Iranians use ATM machines of Bank Melli Iran in downtown Tehran, Iran (File)

    Tehran Mocks 'Totally Useless' US Sanctions as Europe's Iran Trade Mechanism Comes Online

    © AP Photo / Vahid Salemi
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    Already tense relations between Tehran and Washington went into a tailspin last week, after President Trump slapped the Islamic Republic with new sanctions and threatened the country with "obliteration" after Iran's Revolutionary Guards shot down a US spy drone they said was operating in Iranian airspace.

    The US' new sanctions against Iranian Supreme Leader Ali Khamenei, eight members of the Revolutionary Guards and Foreign Minister Mohammad Javad Zarif are "totally useless" and "futile," Iranian parliament National Security & Foreign Policy Commission chairman Mojtaba Zonnour has said.

    "They have sanctioned Foreign Minister Zarif, which is, according to international laws, impossible," Zonnour said, as cited by Mehr News. "We will continue our diplomacy," he added.

    "The Leader of the Islamic Revolution is also sanctioned, while he has not travelled to foreign countries after his Presidency and has no banking account," the lawmaker added, noting that the measures intended to cut off Khamenei's "access to financial instruments" were thus completely "futile."

    As for the restrictions against the Revolutionary Guards, which the US previously classified as a 'terrorist group', Zonnour highlighted that the organisation has already been sanctioned repeatedly, saying that "imposing sanctions on IRGC commanders once again is totally useless."

    Iran's Supreme Leader Ayatollah Ali Khamenei is seen near a 3 Khordad system which is said to had been used to shoot down a U.S. military drone
    © REUTERS /
    Iran's Supreme Leader Ayatollah Ali Khamenei is seen near a "3 Khordad" system which is said to had been used to shoot down a U.S. military drone

    Zonnour's remarks followed the official announcement by the European Union late Friday that the European financial settlement mechanism known as INSTEX aimed at bypassing the tough US sanctions against Iran had become operational, with Iran's envoy on the nuclear deal soon confirming that the system was working and transactions are already taking place.

    "France, Germany and the United Kingdom informed participants that INSTEX had been made operational and available to all EU Member States and that the first transactions are being processed," the EU said in a statement.

    Together with the instrument, which some EU countries are joining as shareholders, Iran has set up a legal entity to facilitate trade with Europe, the statement said.

    INSTEX, which stands for 'Instrument in Support of Trade Exchanges', is a payments system allowing countries and companies to get around US Iran-related secondary sanctions by allowing for goods and services to be exchanged without the direct transfer of money between Iranian and EU companies. Instead, the mechanism promises to coordinate import and export payments by creating a virtual ledger to offset balances. The mechanism is expected to focus first and foremost on medical goods, agriculture and pharmaceuticals, items which were also targeted as part of the Trump administration's policy of "maximum pressure."

    US officials had previously dismissed INSTEX, saying the mechanism was not commercially viable. Earlier this week, US Special Representative for Iran Brian Hook said he was "very doubtful" that the system would even "be able to actually conduct transactions."

    On Friday, Hook warned that Iran's oil sector would continue to be sanctioned, saying that no waivers to sanctions had been put in place and that the US would "sanction any illicit purchases of Iranian crude oil." China reportedly defied the US warning, with an Iranian oil tanker docking at a chemical complex outside Beijing earlier in the week, with more tankers expected to make their way to the country in the coming weeks. China's foreign ministry said Friday that it "rejects" the US policy of unilateral sanctions and would "not support US policy on bringing Iran's oil exports to zero."

    A picture taken on March 12, 2017, shows an Iranian tanker docking at the platform of the oil facility in the Khark Island, on the shore of the Gulf.
    © AFP 2019 / Atta Kenare
    A picture taken on March 12, 2017, shows an Iranian tanker docking at the platform of the oil facility in the Khark Island, on the shore of the Gulf.

    Relations between Iran and the US began a sharp decline in May 2018, after Washington's withdrawal from the nuclear deal. The move sparked a series of back and forth recriminations, threats and policy decisions, including the classification of portions of one another's armed forces as "terrorists." Last month, the US deployed a carrier strike group to the Middle East citing an 'imminent Iranian threat' to its interests, with the deployment followed by mystery sabotage attacks against six tankers in the Persian Gulf and the Gulf of Oman for which no party or country has taken responsibility. Washington blamed Tehran, with Iran forcefully denying any involvement and calling the attacks a provocation by the US and its regional allies.

    On 20 June, the Revolutionary Guards' aerospace force shot down a $130 million US spy drone it said was operating in Iranian airspace with a surface-to-air missile. The US maintains that the drone downed over international waters in the Strait of Hormuz. Last Thursday, President Trump said he had approved airstrikes against multiple targets inside Iran in response to the drone incident, but added that he pulled back at the last minute after being told the strikes would kill 150 Iranians, which he said would not be a "proportionate" reaction to the downed drone. The apparent change of heart has not prevented Trump from threatening to "obliterate" Iran if it attacked "anything American" again.

    Iranian Foreign Minister Mohammad Javad Zarif called the US president's threats illegal and tantamount to threats of "genocide," and warned that "whoever begins war will not be the one ending it."

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