From UPSC perspective, the following things are important :
Prelims level : INSTEX
Mains level : Global financial mechanisms
Six new European countries have joined the INSTEX barter mechanism, which is designed to circumvent U.S. sanctions against trade with Iran by avoiding use of the dollar.
Instrument in Support of Trade Exchanges (INSTEX)
- The INSTEX is a European special-purpose vehicle (SPV) established in January 2019.
- It is a barter mechanism to facilitate non-USD transactions and non-SWIFT to avoid breaking U.S. sanctions.
- It functions as a clearing house allowing Iran to continue to sell oil and import other products or services in exchange.
- The system has not yet enabled any transactions.
- Six Countries – Belgium, Denmark, Finland, the Netherlands, Norway and Sweden have recently joined INSTEX.
- France, Germany and the UK are its founding members.