Iran takes a hit from US, but catches a break from Europe

Iran takes a hit from US, but catches a break from Europe

Treasury puts new restrictions on financial transactions and Tehran's media while EU court says blocks on large bank should be lifted

The EU's General Court (photo credit: Courtesy Court of Justice of the European Union)
The EU's General Court (photo credit: Courtesy Court of Justice of the European Union)

The White House added several sanctions to ramp up pressure on Iran Wednesday, even as a European court ruled the EU would have to pull back on some restrictions on the Islamic Republic.

Among the expanded measures announced Wednesday by the US Treasury Department was a move to deny Iran access to revenue garnered from its oil exports.

However, a court in Luxembourg ruled that the European Union should rescind sanctions against Iran’s Bank Saderat, one of the country’s largest financial institutions, saying the EU had not sufficiently proven the firm was involved in Iran’s oil industry, Reuters reported.

Western countries have passed wide-ranging sanctions against Tehran over the last several years in a bid to pull the Islamic Republic back from its nuclear program.

Many countries think Tehran is working to develop nuclear weapons. Iran has said repeatedly that its nuclear program is meant for peaceful purposes.

Under the new oil sanctions announced Wednesday Iran would only be able to use revenue from its oil sales in a country that purchased its crude, significantly limiting its access to the money.

“This provision will significantly increase the economic pressure on Iran, as it will effectively lock up Iran’s oil revenues in accounts abroad, restricting use of oil-related revenue to the purchase of goods from the country in which the funds are confined and precluding Iran’s ability to move funds across jurisdictions,” an unnamed official told reporters, according to Foreign Policy’s Cable blog.

The sanctions had been passed by Congress last year and Wednesday was the deadline for the White House to enact them.

The financial sanctions also apply to Iran’s state-run media, the Islamic Republic of Iran Broadcasting, as well as its director, Ezzatollah Zarghami, who are now blocked from accessing the US financial system.

The blocks on the state-run media were aimed at cutting supports for human rights abusers, officials said.

In Europe though, sanctions on Iranian banking may ease up after the ruling by the EU’s General Court that Bank Saderat, under restrictions since 2010, was not proven to be involved in the country’s nuclear program.

The ruling may set a precedent for other Iranian firms with cases pending at the General Court, including the Central Bank of Iran and Tehran’s state-run oil company, according to Reuters. Some 30 claims by Iranian firms are currently pending at the court.

A spokesperson for EU foreign policy chief Catherine Ashton said only that the body would examine the ruling.

On Tuesday, Iran said it would renew talks over its nuclear program with the West on February 26 in Kazakhstan, after Ashton confirmed the timing to chief Iranian negotiator Saeed Jalili.

Talks between Iran and the five UN security council nations plus Germany, or P5+1 group, have been at a standstill for several months. Several earlier rounds of talks have failed to produce any Iranian commitment to limit its enrichment activity, though officials on both sides of the table have called the meetings “constructive.”

A former Israeli military intelligence chief on Monday said Iran was four to six months away from being able to build a nuclear bomb. However, Amos Yadlin, like most Western officials, maintains that time remains for diplomacy and sanctions to work to pull the program back before military action is necessary.

Some in Congress have already begun working on a new round of sanctions, The Cable reported Wednesday.

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