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West lowers sights for new Iran sanctions at U.N.

UNITED NATIONS (Reuters) - Western powers are gearing up for talks on a fourth round of U.N. sanctions against Tehran over its nuclear program but will not target Iran’s energy sector to ensure Russia’s and China’s support.

The decision to begin exploring the possibilities for new punitive measures against Tehran reflects the growing impatience in the United States, Britain, France and Germany, the four Western powers that have joined forces with Russia and China to persuade Iran to freeze parts of its nuclear program.

“We have waited long enough for Iran,” a European diplomat said on condition of anonymity. “We and our friends in the (six powers) agree it is time to consider next steps at the U.N.”

But the scaling back of the West’s expectations for new U.N. steps against Iran for defying Security Council demands to stop enriching uranium shows that the Europeans and Americans have accepted that Moscow and Beijing, with their close trade ties to Tehran, will not let Iran’s economy be crippled.

Diplomats said the Western powers are eager to ratchet up the pressure on the Islamic Republic. But they also need to keep Moscow and Beijing on board to send a clear signal to Tehran that the world’s big powers are united against it.

The United States and its Western allies fear Tehran is covertly seeking atomic weapons, a charge Iran denies.

Just a few months ago U.S. Secretary of State Hillary Clinton, Israeli Prime Minister Benjamin Netanyahu and other leaders warned Iran that it could face “crippling sanctions” if it continued to reject U.N. demands about its nuclear program.

But “crippling” measures would not make it through the United Nations. The kinds of sanctions that Russia and China can accept in a new U.N. resolution, Western diplomats said, include largely symbolic measures, such as adding names to a U.N. blacklist to face asset freezes and travel bans.


One senior Western diplomat said a new U.N. sanctions resolution could be expected to target “at least another bank, more individuals, more companies -- possibly a shipping company -- a tighter ban on arms, possibly political measures.”

Another senior European diplomat told Reuters the Security Council could “never pass crippling sanctions against Iran’s oil and gas businesses because Russia and China have a veto.”

“Such sanctions will have to come from the European Union, or outside the U.N., and we hope to do that,” he said.

A senior Western diplomat said the Western powers had other options independent of the United Nations. Those options would not be symbolic, he said.

He said that if European governments were to forbid Iranian banks from engaging in any transactions in euros, it would have “quite serious consequences” for Iran. Such a measure is both feasible and possible if the “political will” exists in Europe, he added.

Other diplomats said the West could prevent Iran from getting hold of the lucrative technology to produce liquefied natural gas (LNG). Tehran has been eager to acquire LNG technology for some time but has been unable to get top industry players to close deals with it.

Iran has the world’s second largest gas reserves after Russia.

Diplomats said negotiations on new sanctions would likely begin before the end of the year, when an unofficial deadline runs out -- a deadline the U.S. and European leaders had given Iran to begin talks on their offer of economic and political incentives in exchange for halting nuclear enrichment.

Diplomats said it was highly unlikely the Security Council would be able to approve a new sanctions resolution before the end of the year. Negotiations would likely drag for weeks or months as the Russians and Chinese work hard to water down the measures, as they did with previous sanctions resolutions.

Western diplomats said their fears about Iran’s nuclear program were confirmed this week by a new report from the U.N. nuclear watchdog that said it was concerned Tehran might still be engaging in clandestine atomic activities.

Iran has also rejected a U.N. proposal to ship most of its low-enriched uranium out of the country for further enrichment and processing in Russia and France before returning it to the Islamic Republic for use in a medical reactor that produces isotopes for cancer treatment.

Tehran has enough low-enriched uranium for approximately one bomb, if enriched to a much higher purity level, and U.N. officials had said that moving most of it temporarily out of Iran would have bought time for negotiations aimed at ending Tehran’s nuclear standoff with the West.

Shortly after U.S. President Barack Obama took over from George W. Bush in January, he announced that he was willing to engage directly with Iran to mend ties between the two nations, which have not had diplomatic relations for three decades.

Western diplomats said hopes had been high that Iran would take Obama’s outstretched hand and end its confrontational approach to the West. But they have been disappointed.

“It doesn’t look like Iran wants to resolve this problem,” a diplomat said. “It’s not surprising but it’s disappointing.”

Additional reporting by Patrick Worsnip; editing by Mohammad Zargham