EU agrees deal on new sanctions on Iran

BRUSSELS Tue Nov 22, 2011 4:52pm EST

Iran's Head of Atomic Energy Organization Fereyoun Abbasi-Davani attends the Ministerial Conference on Nuclear Safety in Vienna in Vienna June 20, 2011.    REUTERS/Herwig Prammer

Iran's Head of Atomic Energy Organization Fereyoun Abbasi-Davani attends the Ministerial Conference on Nuclear Safety in Vienna in Vienna June 20, 2011.

Credit: Reuters/Herwig Prammer

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BRUSSELS (Reuters) - The European Union agreed in principle on Tuesday to sanction some 200 Iranian people, companies and organizations, adding to measures imposed by the United States, Britain and Canada due to suspicions that Iran is trying to develop nuclear weapons.

Iran dismissed the latest raft of sanctions, saying such steps would only intensify Iranian popular support for a nuclear program it insists is solely for peaceful purposes.

But analysts said Iran's leadership may have underestimated Western resolve and over-played its familiar hardline brand of brinkmanship, making it hard for them to reach a compromise.

"The regime is very worried about a military strike. They have mishandled the issue and it is now very difficult for them to reach any kind of compromise," said a senior European diplomat in Tehran, who asked not to be named.

"Also they are worried about a spread of the Arab Spring into Iran and cannot risk more economic pressure that can cause street protests," the diplomat said.

The ratcheting up of pressure on Iran follows a November 8 report by the International Atomic Energy Agency which presented intelligence suggesting Iran had worked on designing an atomic bomb and may still be secretly carrying out related research.

Iran said the report was "politically motivated."

Once the EU decision is formally approved by foreign ministers on December 1, European companies will be banned from doing business with the listed firms and organizations, while individuals will be subject to asset freezes and visa bans. The news helped push benchmark Brent crude above $108.

The EU move follows a coordinated tightening of the sanctions by the United States, Britain and Canada on Monday.

The United States named Iran as an area of "primary money laundering concern," a step designed to dissuade non-U.S. banks from dealing with it; blacklisted 11 entities suspected of aiding its nuclear programs; and expanded sanctions to target companies that aid its oil and petrochemical industries.

Britain banned all its financial institutions from doing business with Iran, including the Iranian central bank, and Canada said it would ban the export of all goods used in Iran's petrochemical, oil and gas industries and "block virtually all transactions with Iran," also including the central bank.

The new measures would add to the cost Iranians pay for all their international trade, but would not be enough to persuade Iran's leaders to change their course.

"It is going to be a complication, but I still think that the impact will be marginal," said David Butter, regional director at the Economist Intelligence Unit in London.


U.S. and EU sanctions passed in 2010 already stopped most Western banks dealing with Iran and pressure from Washington made it temporarily impossible for Indian oil buyers to pay for some $5 billion of Iranian oil earlier this year.

Washington however stopped short of targeting Iran's central bank, a step that would have cut it off from the global financial system meaning it would not be able to receive payments for its oil. Cutting off crude from Iran, the world's fifth biggest exporter, would send oil prices skyrocketing and jeopardize U.S. and European economic recovery.

France meanwhile, has yet to impose its own new sanctions, but is pushing hard for a unified Western response to sanction Iran's central bank and stop imports of Iranian oil.

"France believes unprecedented sanctions have to be taken to convince Iran that it makes the strategic choice of a sincere negotiation and to put into action its international obligations," French Foreign Ministry spokesman Bernard Valero told a news briefing.

While the United States stopped buying Iranian crude in the 1990s, there is less appetite elsewhere in the West for the French proposal of a wider import ban, with British sources saying London's latest measures were not meant to target oil.

Asked if France would simply halt its oil imports if a common position could not be found, Valero said: "If we find ourselves alone, we'll have to see. But we won't be on our own."

The head of the National Iranian Oil Company said in any case he had no fear of losing EU markets.

"Iran's crude exports to the countries that are members of the European Union are very small," Ahmed Ghalehbani said on the Iranian Oil Ministry website.

"There are various countries that want Iran's oil and the Islamic Republic of Iran does not have any concerns about European countries not buying its oil," he said.


The piecemeal Western adoption of unilateral sanctions reflects the difficulty of persuading Russia and China not to veto further measures at the U.N. Security Council, where they have supported four previous sanctions resolutions against Iran.

Russia issued a sharply worded statement on Tuesday underscoring its longstanding opposition to sanctions beyond those endorsed by the U.N. Security Council.

"We again underline that the Russian Federation considers such extraterritorial measures unacceptable and contradictory to international law," Foreign Ministry spokesman Alexander Lukashevich said in the statement.

"Such practices ... seriously complicate efforts for constructive dialogue with Tehran," Lukashevich said.

Russia has significant commercial ties with Iran. Analysts say Moscow sees less risk than the West of Tehran acquiring nuclear weapons in the foreseeable future, and uses its ties with Iran as a lever in relations with the United States.

While there has been increased media talk of a possible Israeli or U.S. military strike on Iran in response to its nuclear program, lacking conclusive evidence that the Islamic Republic is indeed building an atomic bomb, Western states are likely to stick to diplomacy and economic measures.

"The route that continues to be taken and favored by the international community when dealing with Iran is very much one of applying pressure and a desire to return to the negotiating table," said Marie Bos, Middle East analyst for Control Risks Group, a consultancy firm.

"We still feel at this stage that the scenario of a military strike remains an unlikely one."

(Writing by Jon Hemming)

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Comments (17)
McBob08 wrote:
With two nuclear power rattling sabres at it (America and Israel), would it really be any wonder that Iran might want to develop nuclear weapons out of necessity of self defence? But where is the proof that they’re developing nuclear weapons? The explosives technology they’ve developed are completely explainable as a method of developing synthetic diamonds for oil drilling. All other so-called “evidence” has proven to be bullshit.

Plus there’s the fact that Iran has attacked *NOBODY* in the past 100 years, and they have “No First Strikes” enshrined in their constitution. Or maybe you want to consider that Israel has attacked them 5 times over the past 50 years, without provocation every time, and Iran didn’t retaliate once.

This is the “big threat” we’re supposed to fear? Bullshit! Iran’s no more of a threat to the world than Tasmania is.

The real threats of death, war and destruction in the world are America, Israel, The UK and France! They’re the ones that need to be sanctioned!

Nov 21, 2011 10:29pm EST  --  Report as abuse
Mcamelyne wrote:
Sanctions don’t work. In fact they have almost never worked. Unless you can so totally isolate a nation that no nation will trade with it, they don’t work. Implementing them is the first step to war. If we implement sanctions, then we are pre-declaring war because that is the ultimate result of sanctions. America used sanctions in the 30s against Japan, we got war. We used sanctions against Iraq, we got war.

Iran has not violated an International law, they have made no move to attack another nation. I can’t stand their form of government but it is the right of the Iranian people to decide that, not our right. These sanctions will do nothing to prevent war, only guarantee that there will be one.

Instead, we need to end sanctions, open a commercial office and begin to normalize relations leading to peaceful coexistence. It worked in Russia and China, it will work in Iran. There is nothing like greed to cool the most ardent proponents of war. We need a real foreign policy, not a pretend foreign policy.

Nov 21, 2011 11:08pm EST  --  Report as abuse
Wow! and the charade goes on, this is nothing new, this news was predicted (revealed) by wikileaks nearly 3 months ago. i.e. that IAEA will be coerced to find Iran guilty of building nuclear arms and then justifying a attack. Deja Vu (Iraq) now Iran, except this time the players are different Iran is not Iraq.
What stupidity this is, without China, India and Russia on board these sanctions are meaning less. This is just another way of deflecting worsening debt crisis and in some way apeacing Israel.
I can forsee a major war coming up in which USA could be downgraded from a super power to a impotent power. The chinese and Russians are waiting for USA to move in this area and weaken them permanently.
I bet the common american citizen doesn’t give a monkey’s fart about this whole thing. Wish they would wake up from their slumber and punish the corrupt politicians in the pockets of lobbyist.

Nov 21, 2011 11:43pm EST  --  Report as abuse
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