By Rachelle Younglai and Paul Carrel
WASHINGTON/FRANKFURT Feb 21 U.S. lawmakers are
crafting a bill designed to stop the European Central Bank from
handling business from the Iranian government, a congressional
aide said on Thursday, an attempt to keep Tehran from using
euros to develop its nuclear program.
The bill, in the early stages of drafting, would target the
ECB's cross-border payment system and impose U.S. economic
penalties on entities that use the European Central Bank to do
business with Iran's government, the aide said on condition of
The aide disclosed the new sanctions push ahead of fresh
talks on Tuesday in which major powers hope to persuade the
Iranian government to rein in its nuclear program, which the
United States suspects may be a cover to produce weapons.
Iran, which says its program is for peaceful purposes, has
so far resisted pressure from U.S., EU and U.N. sanctions -
including steps that target its lifeblood oil revenues -
designed to force it to accept a diplomatic solution.
In a disclosure likely to raise concerns about the Iranian
program - which has raised the possibility of an Israeli or U.S.
military strike against it - a U.N. report on Thursday said Iran
has begun installing advanced centrifuges at its main uranium
In a confidential report, the International Atomic Energy
Agency (IAEA) said 180 so-called IR-2m centrifuges and empty
centrifuge casings had been hooked up at the plant near the
central town of Natanz. They were not yet operating.
If launched successfully, such machines could enable Iran to
significantly speed its accumulation of material that the West
fears could be used to devise a nuclear weapon.
The U.S. State Department said Iran's installing advanced
centrifuges would be "yet another provocative step" but said it
hoped Iran would embrace a diplomatic solution and come to
Tuesday's talks ready to allay international concerns about its
The talks, which will take place in Almaty, Kazakhstan, will
be between Iranian negotiators and officials from Germany and
the five permanent members of the U.N. Security Council -
Britain, China, France, Russia and the United States.
DEMOCRATIC SUPPORT UNCLEAR
U.S. sanctions have cut Iran off from the U.S. financial
system and largely prevented it from conducting bank
transactions in dollars, which for the most part must clear
through U.S. banks. The draft legislation appears designed to
make it harder for Iran to use euros as a substitute.
One of the lawmakers working on the proposed legislation is
Republican Senator Mark Kirk of Illinois, an advocate of tighter
sanctions on Iran. It is unclear how much support in Congress
there may be for the idea.
The European Central Bank's so-called Target2 system is used
to settle cross-border payments in Europe and processes around
350,000 payments daily, according to the most recent figures
Although the ECB already complies with European Union
sanctions against Iran, the proposed bill is aimed at pressing
Europe to do more to prevent Iranian firms and banks from using
the Target2 system to conduct transactions involving euros.
"The ECB ensures that no illegitimate transactions are
cleared in Target2," a spokesman for the euro zone's central
bank said. "But any sanctions are EU sanctions and not an ECB
The ECB provision is part of a wider U.S. bill aimed at
choking off funds to the Iranian government.
It is unclear when the bill would be introduced or whether
there would be support in the U.S. Congress or the Obama
administration to enact another set of economic sanctions.
The United States and the European Union have worked mostly
in tandem to impose harsh economic sanctions against Iran, which
have so far slashed the country's oil revenues, disrupted trade
and weakened its currency.
ECB representatives are due in Brussels at the start of
March for discussions on various Iran sanctions issues, EU
sources said, though the meetings were not specifically to
Last year, U.S. lawmakers succeeded in pressuring
Belgium-based SWIFT electronic payment system to block Iranian
transactions. SWIFT, which facilitates the bulk of global
cross-border payments, disconnected designated Iranian financial
firms from its messaging system after European regulators
ordered the company to do so.