Finland favors Iran sanctions, but has doubts

OTTAWA (Reuters) - Ideally, the world should slap energy sanctions on Iran to hit the country where it hurts, Finnish Foreign Minister Alexander Stubb said on Thursday, but he acknowledged this may not happen.

"I think the world is right now beginning to be fed up with Iran and the type of foreign policy that it's conducting," Stubb said after discussing Iran's nuclear policies and other issues with Canadian Foreign Minister Lawrence Cannon.

"Sanctions should involve financial means. They should -- albeit perhaps not realistically -- involve issues related to energy."

Stubb did not say whether such energy sanctions should target Iran's oil exports, its gasoline imports, or other areas such as technology or corporate ventures.

He and Cannon said the two countries were ready to join other nations in stepping up sanctions on Iran, and both countries condemned Tehran's decision to enrich its nuclear material in defiance of the United Nations.

Iran has been accused of covertly trying to build atomic weapons, but Tehran says its nuclear facilities are part of a peaceful energy program.

U.N. sanctions have targeted nuclear and arms material and imposed some travel and financial curbs but they have steered generally clear of Iran's 3.75 million barrels per day of oil production, worth hundreds of millions of dollars.

France has proposed sanctions on the Iranian energy sector, but China is widely expected to block them at the U.N. Security Council, where it has a veto. Iran is China's third largest crude oil supplier.

Stubb allowed for the possibility of the European Union going beyond U.N. measures if necessary in its bid to impose strong sanctions.

"The primary source for those sanctions should be a common decision by the U.N. Security Council. If that is not successful, then we will do it through the European Union," he said.

Canadian Prime Minister Stephen Harper said in Vancouver that he had spoken with Russian Prime Minister Vladimir Putin on Thursday and welcomed the "very strong statement" that Moscow had made about sanctions on Iran.

Harper said he would continue the discussions with Russian President Dmitry Medvedev as part of the work of the Group of Eight leading industrialized countries, which Canada is chairing. "The international community must take co-ordinated action," he said.

(Reporting by Randall Palmer; editing by Rob Wilson)