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Middle East

New Iran sanctions target oil and banking

  • European Union High Representative Catherine Ashton, second left, speaks with German Foreign Minister Guido Westerwelle, center, during a meeting of EU Foreign Ministers in Luxembourg on Monday Oct. 15, 2012. (AP Photo/Virginia Mayo)

BRUSSELS: European Union governments imposed sanctions Tuesday against major Iranian state companies in the oil and gas industry and strengthened restrictions on the central bank, cranking up financial pressure over Tehran’s nuclear program.

Iran’s supreme leader said his country would not give in to “bullying,” as China opposed the move and Israel welcomed it.

More than 30 firms and institutions were listed in the EU’s Official Journal as targets for asset freezes in the EU, including the National Iranian Oil Company (NIOC), a large crude exporter, and the National Iranian Tanker Company (NITC).

Both are vital to the Iranian oil industry, the main source of revenue.

Their importance has risen recently as the EU and the United States seek to reduce Tehran’s access to cash by forcing Western companies to halt trade with the OPEC producer. Tuesday’s decision complements previous moves by the EU, such as this year’s embargo on Iranian oil imports to Europe and a decision Monday to ban gas purchases.

“We are now comprehensively capturing all possible elements of this sector and sources of funding for the regime,” a senior EU official said.

Western governments fear Iran wants the ability to build an atomic bomb, but Iran denies having any military intentions.

The West “keeps saying pressure against Iran is aimed at forcing the Islamic Republic to return to the negotiating table” about the nuclear program, Ayatollah Ali Khamenei said Tuesday on state television. “But when did we leave the table that now we need to return?” he asked during his visit to the northeastern province of North Khorasan.

“Their real objective is [forcing] the Iranian nation to surrender to their bullying at the negotiating table ... [but] you are too weak to bring Iran to its knees,” Khamenei said. “European officials are still stuck in the bullying mindset of the colonial 19th century.”

China, Iran’s largest crude oil customer, criticized the new sanctions, calling again for talks to resolve the standoff. “We oppose the imposition of unilateral sanctions on Iran and believe that using sanctions to exert pressure cannot fundamentally resolve the Iran nuclear issue,” Chinese Foreign Ministry spokesman Hong Lei told a daily news briefing.

“We hope that all relevant parties can show flexibility, increase communication and push for a new round of talks as soon as possible.”

Israeli Prime Minister Benjamin Netanyahu praised the move but reserved judgment on whether it would halt Tehran’s nuclear drive. “These are serious sanctions against Iran,” he told EU diplomats in Jerusalem. “When the centrifuges stop spinning and the Iranian nuclear program is halted, we shall know that they have achieved their aim.”

In Tuesday’s list, the EU also targeted NIOC subsidiaries NaftIran Intertrade Company, the National Iranian Gas Company and National Iranian Oil Refining and Distribution. Several banks were also listed.

NaftIran owns a 10 percent stake in the Shah Deniz project in Azerbaijan which is co-led by BP and Norway’s Statoil and which is estimated to contain 1.2 trillion cubic meters of gas. The senior EU official said sanctions were structured to protect the Azeri project from financial impact.

Neither the U.S. nor Europe imports Iranian oil, and both are trying to curb Iran’s sales elsewhere. Justifying the decision, EU governments said that both NIOC and NITC provide financial support to Iran’s government.

A senior NITC official said this EU argument was “baseless” adding the group was privatized in 2000 and was owned by three pension funds. In addition, he said, the poor state of the tanker market meant the company didn’t have money to spare.

The new listings follow a decision Monday by the 27 EU governments to bring sweeping new sanctions against Iranian banking and energy sectors to try to draw Tehran into serious negotiations about its atom project.

Separately, Iran slammed a decision by France’s Eutelsat and Arqiva of Britain to stop broadcasting Iranian state television channels.

“The Islamic Republic of Iran Broadcasting has contracts going back 20 years with Eutelsat, which were renewed for five- or 10-year periods,” IRIB vice president Mohammed Sarafraz was cited by state television as saying.

“The contract was still valid, and the decision to stop broadcasting 19 Iranian channels is political. Eutelsat broke the contract between us unilaterally and without legal justification,” he said, adding that IRIB lawyers planned a complaint.

 
A version of this article appeared in the print edition of The Daily Star on October 17, 2012, on page 1.
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