Legality of Using Blockchain to Support INSTEX and Other Special Purpose Vehicles to Enable Humanitarian Trade with Sanctioned States

Abstract

This article studies the availability, legality and risks associated with utilizing blockchain technology to support the EU’s special purpose vehicle, the Instrument in Support of Trade Exchanges (INSTEX), to enable humanitarian trade with Iran within the Joint Comprehensive Plan of Action (JCPOA). Such findings can further be applicable to other special purpose vehicles outside of INSTEX, which would help the EU to maintain foreign policy independence when third country unilateral sanctions apply. It does this by examining why INSTEX stalled and how blockchain could solve such problems. This requires an examination of the reach of US sanctions on Iran. Sanctions regimes commonly exempt financial transactions for humanitarian purposes, but it can be extremely difficult to conduct such legitimate transactions in times of sanctions. This risks human catastrophe of the most vulnerable and can undermine global pandemic relief programmes. Rather than undermine sanctions, the purpose herein is to facilitate humanitarian trade with the maximum level of control and oversight by exploring Blockchain options and legality. blockchain, special purpose vehicles, SPVs, humanitarian payments, single-purpose digital currency, sanctions, fintech, digital currencies, Sanctions Compliance