EU adds Iran sanctions, US eyes its central bank

By REUTERS
December 1, 2011 17:03

European governments add 180 entities, people to sanctions list; US talks of freezing assets of Iran's central bank.

4 minute read.



European foreign ministers ahead of EU meeting

European foreign ministers ahead of EU meeting 311 (R). (photo credit: REUTERS/Thierry Roge)

The European Union on Thursday agreed to draft new sanctions against Tehran that would target its energy, transport and financial sectors; but stopped short of formally pledging to consider an embargo on Iranian oil.

At a meeting of foreign ministers in Brussels, the EU also added 180 Iranian people and entities to a sanctions blacklist that imposes asset freezes and travel bans on those involved in the nuclear work, which Tehran says is for peaceful purposes.

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Iran needs to “take seriously the international community’s call for it to respect its obligations and move away from the pursuit of nuclear weapon technology,” EU foreign policy chief Catherine Ashton told reporters after the meeting.

Any sanctions would need the approval of all 27 member countries. European countries have increased their focus on approving stiffer economic sanctions, as it appears likely that Russia and China would block any attempt by the UN Security Council to impose such harsh measures.

Swedish Foreign Minister Carl Bildt said he was prepared to agree to a crude oil embargo, but questioned its effectiveness.

“I am prepared to go along with that,” he told reporters. “I don’t think it will necessarily have that much of an effect because of the nature of the global oil market.”

A diplomatic source said that Germany was also open to considering an oil embargo as well as measures against financial channels.

In the past, either step would have been taboo, the diplomat said. “Now Germany is willing to discuss this.”

But when pressed by a reporter about a possible EU oil embargo against Iran, Ashton said, “What we agreed in the meeting, was to look at a range of issues including the energy sector, but the detaila of what should be done now goes to the technical experts, who decide what will work and what is appropriate for European member states to do. So those issues will be debated.”

Concern over Iran’s nuclear program grew in November after the International Atomic Energy Agency issued a report that suggested the Islamic Republic has worked on designing an atom bomb.

Britain, along with France, had pushed for decisive EU action after Tuesday’s storming of its Tehran embassy by protesters angry over London’s decision to impose sanctions on the Iranian banking sector, including the Central Bank.

Britain shut Iran’s embassy in London on Wednesday, saying the attack on the British mission could not have taken place without consent from Iranian authorities.

In solidarity with Britain, EU foreign ministers issued a statement saying they were “outraged” by the Tehran attack.

At Thursday’s meeting the EU also agreed to draft measures that could lead to gradual cuts in Europe’s imports of Iranian crude, although some EU governments want assurances that any impact on their economies would be limited before giving their final approval, diplomats said.

“We are working on it,” French Foreign Minister Alain Juppé told reporters when asked about the possibility of an oil ban. “We have to work with different partners so that the interruption of [oil] deliveries from Iran could be compensated by a rise in production in other countries.”

Experts say global crude prices could rise if the EU bans Iranian oil, increasing economic pain as Europe struggles with a debt crisis and the specter of recession.

Greece is wary, because financial woes have led it to buy more Iranian crude. Sources say Tehran has been offering better financing terms while banks are reluctant to lend to Athens.

“Greece has voiced some concerns, we have to take them into account,” Juppé said.

British Foreign Secretary William Hague said after the meeting in Brussels details of any energy sanctions had yet to be ironed out. He said the UK was eager to see the EU target Iran’s banking sector.

“There is more work to be done on what we will do in the energy sector,” he said. “So I think it would be going too far to say an embargo has been agreed.” He argued previous measures had hurt Tehran’s nuclear work.

Hague said later: “The EU made very clear that it will not bow to Iran’s intimidation and bullying tactics... We want Iran to come to the table and negotiate meaningfully about its nuclear program. Despite events this week we still want a diplomatic solution.”

Hague’s Italian counterpart, Giulio Terzi, said the economic impact of sanctions had to be taken into consideration when any new measures are finalized.

EU experts will discuss details of new sanctions in the coming weeks, foreign ministers of the bloc’s 27 states said in Thursday’s statement.

A new proposal for sanctions will be presented to the foreign ministers at a January meeting. It is unclear if there will be enough consensus among the member states to immediately approve the sanctions.

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