Q+A: Six powers hold talks on new Iran sanctions

UNITED NATIONS (Reuters) - The United States, Britain, France and Germany continued talks on Thursday with China and Russia on a U.S.-drafted proposal for a new round of U.N. sanctions against Iran over its nuclear program.

After weeks of delays, China agreed to discuss the draft, which was diluted from earlier U.S. and French proposals to make it more palatable to Beijing and Moscow. The U.S. draft was agreed with Britain, France and Germany before Washington circulated it to Russia and China last month.

Iran rejects Western charges that it is secretly developing atomic weapons and says the goal of its nuclear program is the generation of electricity and other peaceful activities. But Iran has defied five U.N. Security Council resolutions ordering it to cease uranium enrichment.

Envoys from the six powers said they held constructive talks on Wednesday over new U.N. sanctions to try to halt Iran's nuclear program, but diplomats expect weeks of haggling over a text the Security Council can pass.

WHAT HAVE THE KEY PLAYERS DONE?

The United States, Britain, France and Germany exchanged ideas for weeks on a fourth round of U.N. sanctions before agreeing on the draft proposal prepared by Washington. That draft was sent to Russia and China weeks ago.

Russia and China have lucrative business ties with Tehran, which Western diplomats say is one of the main reasons they are reluctant to support punitive U.N. measures against Tehran. Germany is not on the Security Council but the other five major powers have veto power on the council and can block any resolution.

Western officials involved in the six-power talks say Moscow has been losing patience with Tehran and will likely support new sanctions, although it opposes measures that it deems too tough, such as sanctions on Iran's energy sector.

Western diplomats say they are prepared to work hard to win over Beijing and Moscow, even if it means further diluting the proposed measures.

WHERE ARE SANCTIONS TALKS AT NOW?

The discussions were stalled for months but have entered a new phase in which the negotiations have moved out of the capitals to New York. The U.N. ambassadors for the six powers have taken over the work on a draft resolution.

The four Western powers would like to agree on a draft resolution they can submit to the full 15-nation Security Council as soon as possible. While they would like to get a resolution approved by the end of April, some diplomats say the process may take at least until June.

The negotiating process is expected to drag on as Russia and China try to water down proposed measures -- as they did with the three previous sanctions resolutions passed in 2006, 2007 and 2008, which Beijing and Moscow ultimately supported.

WHAT NEW U.N. SANCTIONS ARE BEING PROPOSED?

The latest draft includes the following possible steps in five categories -- energy, financial, shipping, arms trade and the Islamic Revolutionary Guard Corps:

- Ban the establishment of new Iranian banks abroad and bar foreign banks from setting up new operations in Iran;

- Urge vigilance of transactions linked to Iran's central bank, without officially blacklisting it as some of the Western powers had originally wanted. Banning transactions with the central bank would have made it almost impossible for any foreigners to invest in Iran;

- Expand existing limits on the weapons trade with Iran into a full arms embargo with an inspection regime similar to one in place for North Korea;

- Curtail insurance and reinsurance of cargo shipments to and from Iran;

- Expand the number of Iranian individuals and companies facing international travel bans and asset freezes, with a new focus on members of Iran's Islamic Revolutionary Guard Corps and companies controlled by it;

- Authorize the inspection and seizure of suspicious cargo transported by the Islamic Republic of Iran Shipping Lines and other Iranian shipping firms;

- Ban new investments in Iran's energy sector;

The U.S. draft does not propose any measures that would curtail trade in Iranian oil and gas.

HOW HAVE RUSSIA AND CHINA REACTED?

Russia's initial reaction was negative, Western diplomats said. Among the measures it dislikes is the proposed arms embargo, although Russian officials indicated they could live with a call for "vigilance" over the weapons trade with Iran.

There are other measures Russia dislikes, the envoys said, because they are not directly related to Iran's nuclear program. Moscow would like any new measures to focus on Iran's nuclear and missile industries, as did the three previous sanctions resolutions the Security Council passed.

Ambassador Li Baodong of China made clear last week he did not like the proposed ban on new investments in Iran's energy sector.

(Editing by Mohammad Zargham)