World News

Sanctions are biting in Iran - exiled group

BRUSSELS (Reuters) - Sanctions imposed on Iran over the past four years are having a direct impact on its nuclear programme and causing widespread bank liquidity problems, according to an exiled Iranian opposition group.

Citing intelligence gathered in Iran in the last four months, The National Council of Resistance of Iran, a Paris-based group that says it has many followers in Iran, said Tehran was struggling to get equipment for its Natanz enrichment facility.

Iran is also short of fuel for domestic use and has run into liquidity constraints at several banks, it said.

The NCRI report, compiled in June, identifies problems in several crucial areas, despite President Mahmoud Ahmadinejad’s dismissal last week of the fourth round of U.N. sanctions, imposed last month, as “pathetic.”

The NCRI, set up in Iran in the early 1980s, is regarded as a fringe faction by the Iranian government and is listed as a terrorist organization by the United States.

But the group, which operates openly in Europe, has provided accurate information on Iran before. It was the first to expose Tehran’s covert nuclear programme in 2002.

In its report the NCRI said that at Natanz, Iran’s main enrichment facility, efforts to increase the number of centrifuges have been set back by a lack of high-strength steel once imported from Britain.

“In the current circumstances, we are facing problems with regard to obtaining the required material for building centrifuges,” a Natanz director recently wrote to Ahmadinejad.

“In those times, we succeeded in obtaining a large amount of maraging steel from England, but now these amounts are depleted and we cannot replace them.”

The NCRI said Iran was having to import 20.9 million liters of fuel a day for vehicles but was struggling to find suppliers and knew costs would surge if it had to import illegally.

On banking, the NCRI report cited an assessment made by senior directors at Iran’s oil ministry in March on the impact sanctions were having on the flow of banking funds.

“The biggest issue we face is liquidity ... Currently, even many of the smaller and low-ranking (international) banks are refusing to engage in deals with us,” the assessment said.

“These even include banks in Turkmenistan, to the extent that in order to make purchases we have to send suitcases full of money,” the NCRI quoted the assessment as saying.

Editing by Tim Pearce