EU to Impose Sanctions on Iran in Bid to Halt Nuclear Drive

Bloomberg – European Union governments are set to impose their toughest sanctions yet on Iran, backing U.S. efforts to force the clerical regime to halt uranium enrichment as proof it’s not seeking a nuclear weapons capability.

The package includes a ban on investing or selling equipment to Iran’s oil and natural gas industries, restrictions on export-credit guarantees and insurance, and closer monitoring of banks doing business with Iran.

“We have a comprehensive set of sanctions,” EU foreign- policy chief Catherine Ashton told reporters before an EU meeting in Brussels today. “This is something where you’ll see all 27 countries working together.”

European curbs will go beyond what was spelled out in a United Nations Security Council resolution in June, in a boost to U.S. President Barack Obama’s bid to deepen Iran’s international isolation.

Obama on July 1 signed legislation that punishes foreign suppliers of Iran’s gasoline and blocks access to the American financial system for banks that do business with the country.

EU foreign ministers paired the sanctions with a renewed offer of economic incentives that Iran could tap if it stops enriching uranium, a key ingredient in nuclear weapons.

“The goal is to bring Iran back to the negotiating table,” German Deputy Foreign Minister Werner Hoyer said. “We don’t believe in the inevitability of escalation. We have always extended our hand for negotiations, but it has to finally be accepted.”

Sanctions Rounds

Iran has shrugged off three previous sets of UN sanctions and denies Western suspicions that it is building bombs, saying the nuclear program is designed to generate electricity for a growing population.

Iranian President Mahmoud Ahmadinejad yesterday threatened retaliation against countries that back the U.S.-led drive for sanctions.

“Any country that sides with the U.S. in its plot against Iran will be considered our enemy and will be provided with an answer,” Ahmadinejad was quoted as saying by the official Islamic Republic News Agency.

While Iran is the second-largest oil producer in the Middle East after Saudi Arabia, it imports as much as 40 percent of its gasoline since it lacks refining capacity for domestic consumption.

Iranian banks will be prohibited from setting up new branches or joint ventures in Europe, and ordered to seek approval to process payments of more than 40,000 euros ($51,700).

Ship Searches

In line with the UN resolution, the EU will mandate the inspection of ship cargoes suspected of carrying equipment for the nuclear program and banned Iranian air freight from European airports.

Sale to Iran of mainstream technologies with potential “dual use” in conventional, chemical or biological weapons will also be banned.

Passed on June 9 in a 12-2 vote with one abstention, the UN resolution also widens the array of Iranian officials and companies subject to asset freezes.

“I have yet to meet anyone who thinks this issue is going to be sorted out by sanctions alone,” Swedish Foreign Minister Carl Bildt said. “There’s also a downside to sanctions. They tend to reinforce and strengthen and enrich the wrong people.”

 

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