The Iranian judiciary chief said on Monday that his country would never accept the "humiliating conditions" in the EU's payment channel for trade with Iran, Tasnim news agency reported.
"After nine months of procrastination and negotiation, Europeans have created a mechanism with limited capacity, not for exchanging money but for food and medicine," said Ayatollah Sadeq Amoli Larijani.
The first "strange" condition is that Iran should join the Financial Action Task Force (FATF) while the other is that the country should enter the negotiations on its missile program, according to Larijani.
"Iran will by no means accept these humiliating conditions and will not accede to any demand at the expense of opening a small waterway such as INSTEX," he said.
On Thursday, the EU announced the setting up of INSTEX (Instrument In Support of Trade Exchanges) by Britain, Germany and France to secure trade with Iran and skirt U.S. anti-Iran sanctions after Washington pulled out of the 2015 landmark nuclear deal last May.