EU passes unprecedentedly tough Iran sanctions

The EU passed sanctions today that surpass the UN's Iran sanctions and all previous European measures. As Tehran's largest trading partner, the EU is likely to make a serious dent economically.

By , Staff writer

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    Iran's President Mahmoud Ahmadinejad arrives for a meeting in Tehran July 15. EU foreign ministers approved tighter sanctions Monday despite dire warnings in recent days by Tehran, including comments by President Ahmadinejad such as, 'Are you helpless, do you fear one Iranian atomic bomb?'
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The European Union instituted sweeping and legally binding sanctions against Iran Monday amid ongoing concerns about Tehran's nuclear ambitions and brinkmanship – and continued reprocessing of nuclear fuel.

European foreign ministers in Brussels finalized measures that will take effect tomorrow, targeting a wide range of banks, individuals, shipping, insurance, and oil refining technology – despite financial losses to European firms that have greater investment and dealings with Iran than their US counterparts.

These Iran sanctions go farther than a fourth round of United Nations sanctions approved June 9 and are seen as the most comprehensive the EU has ever undertaken against a single state.

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Sanctions target Iran's crucial energy sector

The precise sanctions list will be published tomorrow. But Iran’s energy sector is known to be a main target of the sanctions. Oil accounts for roughly 80 percent of total exports and more than half of the government's revenues.

Despite being the No. 2 OPEC exporter of crude oil, however, Iran must import some 40 percent of its refined gasoline – making it vulnerable to European limits on such imports. Tehran announced on Sunday a $46 billion program to increase its oil refining capacity, adding seven new refineries and improving its nine existing ones.

The EU sanctions are also known to include restrictions on some 40 senior Iranian officials, bank freezes, bans on sale or transfer of technology (especially of natural gas liquefaction), and prior approval of cash transfers higher than $52,000, to outline a few.

After the meeting EU foreign policy chief Lady Catherine Ashton said the measures "sent a powerful message" that Iran's "nuclear program is a cause of serious and growing concern to us ... because of the failure to comply with the UN Security Council resolution and the IAEA board resolutions" and because of a lack of interest in negotiations.

Why Europe is pressing hard now

In the past, Europe has been resistant to pressing Iran, which counts the EU as its top trade partner.

But EU foreign ministers went ahead with the sanctions Monday despite dire warnings in recent days by Tehran, including comments by Iranian leader Mahmoud Ahmadinejad such as, “Are you helpless, do you fear one Iranian atomic bomb?"

“The possibility of [nuclear] proliferation in close proximity to Europe means that European elites will even do things that cut against their commercial interests,” said Nick Whitney of the European Council of Foreign Relations in London.

But despite Iran's brash talk and refusal to suspend uranium enrichment, Ashton left room for reconciliation.

The larger aim of the EU, Ashton said after Monday's meeting, is to "persuade Iranian leaders it is in their interest to return to the table ... sanctions are not an end in themselves." The EU wants a solution "that enables all to have confidence in the civilian nature of the program," Ashton added.

Ashton has been corresponding with Iranian chief nuclear negotiator Saeed Jalili and has stated she is ready to talk further with him in September, following the Muslim holy month of Ramadan.

Under pressure, Iran pursues diplomatic track

The sanctions were finalized as Iran continues to push its nuclear efforts, which it declares to be purely civilian but which the West suspects is paving the way for nuclear weapons.

Tehran Sunday petitioned the International Atomic Energy Agency to allow Brazil and Turkey to join in negotiations in Vienna on a proposed swap of Iranian low-enriched uranium for fuel rods to be used in a medical reactor. Iran last year rejected a similar proposal by Europe, Russia, and the US.

Now it proposes that Turkey, not Russia, take part of its uranium for reprocessing. Iran also said yesterday it wishes to pursue a “fusion reactor” – technology that has eluded the West.

EU foreign ministers left the door open for diplomacy, offering Iran a package of economic incentives if it halts uranium enrichment – a process necessary for nuclear power but also weapons.

How effective will sanctions be?

Iran government spokesman Ramin Mehmanparast was quoted by the official news agency IRNA as saying the sanctions would "have no impact."

How effective sanctions may prove in deterring Iran’s assumed march toward nuclear capability – in a country where Revolutionary Guard businesses are known to profit greatly from black-market goods – is unknown and debated. But some Europeans feel the bloc has no other choice.

“We don’t know if a sanctions regime will affect [Iran’s] nuclear program,” says François Heisbourg of the Paris-based Foundation for Strategic Research. “We simply don’t. The only difference between doing sanctions, and doing nothing, is that doing nothing means nothing will happen.”

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