An Iranian cleric walks past a mural painting of the national flag in the capital Tehran on August 27, 2019. (ATTA KENARE / AFP）

TEHRAN - Iran’s central bank criticized a European Union payment channel designed to allow European companies to avoid US sanctions, portraying it as useless and saying Iran won’t be diverting resources to it.

The Central Bank of Iran (CBI) said on Sunday that the EU-initiated payment system did not work because its operation was under the influence of US sanctions.

The system, known also as the Instrument in Support of Trade Exchanges (INSTEX), was a mechanism set up by France, Germany and Britain in Jan 2019 to facilitate trade with Iran by skirting the US anti-Iran sanctions

The system, known also as the Instrument in Support of Trade Exchanges (INSTEX), was a mechanism set up by France, Germany and Britain in Jan 2019 to facilitate trade with Iran by skirting the US anti-Iran sanctions.

The INSTEX channel was basically designed to save the Iranian nuclear deal, internationally known as the Joint Comprehensive Plan of Action (JCPOA), after the US pullout in 2018, the CBI said in its Twitter account on Sunday.

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But the mechanism failed to work because European governments have “no idea” how to finance the conduit set up two years ago, known as Instex, and “have not had enough courage to maintain their economic sovereignty,” the Central Bank of Iran said in comments on Twitter.

The European countries found no way to finance the INSTEX channel either, it added.

The CBI statement came after Germany on Saturday blamed Iran for the failure of the EU-initiated payment system. 

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Iran’s comments coincide with the US presidential transition from Donald Trump to Joe Biden, who was vice-president under Barack Obama.

Trump withdrew the US from a six-power nuclear deal with Iran in 2018 and restored a swath of sanctions on the Islamic Republic. Biden told the New York Times in December he will look for “follow-on agreements to tighten and lengthen Iran’s nuclear constraints” and address its missile program, something Iran has said is strictly off limits.

INSTEX's first transaction was carried out in March 2020. The channel has only moved small amounts of capital for a few medical shipments, which are technically exempt from sanctions.route