The financial channel Europe came up with as part of its efforts to keep the nuclear deal with Iran alive, makes no sense if it cannot be used for issuing credits to the Islamic Republic, according to one of its top diplomats.

“We believe that [the Instrument in Support of Trade Exchanges, or INSTEX] will be no good unless there is enough credit,” Deputy Foreign Minister of Iran Seyyed Abbas Araghchi said, as cited by Irna.

Apart from credits, if the trade mechanism functioned it would also create revenues for Iran by facilitating purchases of its crude, but none of the elements is working, the diplomat pointed out.

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The high-ranking diplomat’s statement came on Sunday, just after Tehran announced that it will increase uranium enrichment above the limit set under the 2015 nuclear agreement, officially called the Joint Comprehensive Plan of Action (JCPOA). Araghchi also warned that Iran may further reduce its commitments if its European colleagues fail to fulfil theirs.

After Washington ditched the nuclear deal by last year and started piling up sanctions against Tehran, the remaining signatories started developing the alternative INSTEX channel, to skirt the restrictions. Last week, French, British and German officials announced the trade mechanism had become operational, and Iran confirmed this.

However, Tehran has repeatedly criticized the condition of INSTEX before and after the launch. Despite some minor pilot transactions taking place, nothing beyond that was reported. Last week, the Iranian envoy to the UN compared the circumventive trade channel to “a beautiful car without fuel.”

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Critics earlier said that INSTEX doesn’t change much for European companies, as they fear that the US may still slap them with sanctions and bar them from the American market.

“That’s very dangerous for European companies,” independent journalist Luc Rivet told RT earlier this year. “I don’t know anybody who will dare to go with this Instex system.”

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