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EghtesadOnline: A humanitarian channel for food and medicine export to Iran should be launched in the coming months, senior Swiss and US officials told Reuters, helping supply Swiss goods to the Iranian people without tripping over US sanctions.

Food, medicine and other humanitarian supplies are exempt from sanctions that Washington re-imposed last year after US President Donald Trump walked away from a 2015 international deal over Iran’s nuclear program.

But the US measures targeting everything from oil sales to shipping and financial activities have deterred several foreign banks from doing business with the Islamic Republic - including humanitarian deals.

Pascale Baeriswyl, Swiss state secretary for foreign affairs, and US ambassador, Edward McMullen, spoke in separate interviews in the Swiss capital late on Tuesday, days after a rare Swiss-brokered prisoner swap by arch foes the US and Iran, according to Financial Tribune.

“Our role is really to be able to provide food and health goods to the Iranian people. And therefore we are working hard on establishing that humanitarian channel,” Baeriswyl said.

US clarifications announced in October on how to verify and certify such deals - bypassing Iran’s central bank and ensuring that no payments are transferred to Iran - helped advance the project so as to safeguard Swiss exporters.

“Ultimately that depends on companies and banks wanting to participate....We have made progress recently,” Baeriswyl said.

Asked whether the mechanism could be operational in the first half of 2020, she replied: “I hope so, but it is very difficult to predict since it is not entirely in our hands.”

McMullen was also upbeat. “Fortunately, I think we are at that point now where we are working with Switzerland on the final details. And hopefully we’ll be seeing some kind of finality to that conversation in the near future,” he said.

Big Swiss companies like Nestle and drugmakers Roche and Novartis already produce in Iran. The new channel could encourage smaller players to export food and medicine to Iran.

France has led efforts for more than a year to set up a separate European trade mechanism for humanitarian and food goods with Iran, which has stalled.

Baeriswyl said: “If this (Swiss) model works it would be great if others could follow... It’s not a competing instrument, just a slightly different approach.”

January marks the 40th anniversary of Switzerland’s taking on a mandate of a neutral “protecting power”, representing US diplomatic interests in Iran since Washington and Tehran cut ties shortly after the 1979 Islamic revolution.

Baeriswyl, who held talks in Geneva with Iranian Foreign Minister Mohammad Javad Zarif in October that were revealed in Twitter posts, met him again in Zurich last weekend for the handover of US and Iranian prisoners.

“We stand ready - if both parties ask us to - to facilitate more (exchanges), of course,” she said.


Different From INSTEX

Citing Markus Leitner, Swiss ambassador to Iran,  Ferial Mostofi, a member of Tehran Chamber of Commerce, Industries, Mine and Agriculture confirmed last week that the Switzerland plans to operationlize the humanitarian channel in the near future. 

Leitner had emphasized that the channel is not aimed to substitute the Iran-EU trade payment mechanism known as Instrument in Support of Trade Exchange (INSTEX).  

“The channel is not going to be a rival or a substitute to INSTEX, and if put into operation it will function differently from INSTEX,” Leitner addressed attendees in the Grain Conference 2019 on December 3. 

INSTEX is aimed at facilitating trade with Iran by circumventing sanctions reimposed by the US after Trump’s withdrawal in 2018.


Food Iran US sanctions Medicine Swiss Trade Channel humanitarian channel export to Iran