Friday, July 20, 2007

US steps up effort to stop EU firms trading with Iran

The Guardian is reporting an escalating crackdown by the US on foreign companies and banks doing business with Iran is provoking opposition in Britain and Europe, where diplomats say the action could lead to a trade war. Congress wants all international companies to end their investment in Iran and is pushing through a bill that would penalise companies which fail to do so. The British, along with other European governments, see the US approach as draconian and are lobbying against it.

The American move reflects frustration at the failure, so far, of western diplomacy to persuade Iran to stop its uranium enrichment programme which the US, Britain and others suspect is a step towards a nuclear weapons capability. Iran denies it has ambitions to build a nuclear weapon. A senior British banking source said yesterday there was a great deal of annoyance in the City with the US approach. The two British banks most frequently mentioned in Washington in relation to Iran are HSBC and Standard Chartered. The source said both banks have scaled down their operations in Iran and maintain a modest presence in Tehran. But much of their former business, which consisted principally of managing payments between companies, has been picked up by German and French banks whose governments have resisted pressure from Washington, the source said. The state department has been pressing for disengagement for months. But the move is being given added impetus by the Iran counter-proliferation bill going through Congress that would penalise the American interests of companies that continue to have a presence in Iran. Tom Lantos, chairman of the House foreign affairs committee, said: “Our goal must be zero foreign investment.” The bill appears to have overwhelming support in Congress. Congress passed the Iran and Libya sanctions act in 1996 that threatened action against foreign governments and companies, but gave the state department discretion over when to implement it. The new legislation proposes to remove that discretion. The state department prefers persuasion to coercion, fearing the latter would alienate allies, and opposes the legislation. The security council has imposed limited sanctions on Iran, mainly economic and travel bans, and a third round of sanctions is being discussed. The White House sees it as inconsistent for European countries to support sanctions but to allow companies to continue trading. Britain says it has no legal basis to order the banks to close their Iranian operations. European diplomats say the US is aiming at the wrong targets and should focus on Arab and far east companies that have a greater exposure to the Iranian market. Any penalties imposed by the US would be in breach of World Trade Organisation rules, they argue. A senior US official said there have been discussions between Stuart Levey, the under-secretary of state at the treasury, and the British government, though he acknowledged that the involvement of British banks and companies was not as deep as some on the continent. He said the EU had £11bn in export credits to Iran in 2005, the latest figure available. “So we have been in discussions with many of the leading governments - Germany, France, Italy, Spain - the four largest countries with exposure to export credits. This is really quite inconsistent with where we are going with UN sanctions,” he said. “We have had two sanctions resolutions: so why would you be promoting trade with Iran?”

Posted by Editors at 23:51:04 | Permalink | No Comments »

The riddle of Iran

“THE Iranian regime is basically a messianic apocalyptic cult.” So says Israel’s once and perhaps future prime minister, Binyamin Netanyahu. If he is right the world is teetering on the edge of a terrifying crisis. While the world has been distracted by Iraq, Afghanistan and much else, Iran has been moving relentlessly closer to the point where it could build an atomic bomb. It has converted yellowcake into uranium hexafluoride gas. Now it is spinning the gas through thousands of centrifuges it has installed at the underground enrichment plant it built secretly in Natanz, south of Tehran. A common guess is that if it can run 3,000 centrifuges at high speed for a year, it will end up with enough fuel for its first bomb.

 

According to the International Atomic Energy Agency, the UN’s nuclear watchdog, Iran could have 3,000 centrifuges hooked up by the end of this month. The Iranians say their next aim is to scale up to 54,000 centrifuges. Figuring out how to put the fuel into a usable weapon will also take time—perhaps a year or more. But for would-be bomb-builders, making the fuel is by far the hardest part. The upshot, say Israel and some American experts, is that Iran may have a bomb by the end of 2009. Mohammed ElBaradei, the IAEA’s director-general, is more cautious. But even he says that if Iran really wants a bomb it could now build one within three to eight years. What Iran is doing at Natanz is entirely illegal. It has signed the Nuclear Non-Proliferation Treaty and says its nuclear aims are peaceful. But having spent decades deceiving nuclear inspectors, it is disbelieved even by its friends. A year ago this month Russia and China therefore joined the rest of the UN Security Council in ordering Iran to stop. It carried on regardless. The Security Council followed up with two resolutions, in December 2006 and March this year, repeating its demands and applying sanctions. The centrifuges spin defiantly on. So what next?

This story could have at least three unhappy endings. In one, Iran ends up with nuclear weapons, bringing new instability and a hair-trigger face-off with nuclear Israel into one of the world’s least-safe neighbourhoods. In another, America or Israel take pre-emptive military action and manage to stop it, even though such an attack would almost certainly have very dangerous consequences of its own. In the third ending, Iran is attacked, and enraged, and retaliates—and still ends up with a bomb anyway. It is vital to understand that this third finale is not a nightmare dreamt up by editorial writers. After the false intelligence that led America into Iraq, and the mayhem that followed, it may seem hard to believe that America or Israel are pondering an attack on a much bigger Muslim country. But they are—and they are not mad. This time, after all, there is no question of false intelligence: the world’s fears are based on capabilities that Iran itself boasts about openly. Nor would there be another invasion: this would be an attack from the air, aimed at disabling or destroying Iran’s nuclear sites. From a technical point of view, launching such an attack is well within America’s capabilities (America has lately reinforced its carrier fleet in the Persian Gulf) and perhaps within Israel’s, too. Yet such an attack would nonetheless be a huge gamble. Even if it delayed or stopped Iran’s nuclear programme, it would knock new holes in America’s relations with the Muslim world. And if only for the sake of their domestic political survival, Iran’s leaders would almost certainly hit back. Iran could fire hundreds of missiles at Israel, attack American forces in Iraq and Afghanistan, organise terrorist attacks in the West or choke off tanker traffic through the Strait of Hormuz, the world’s oil windpipe. How could any Western leader in his right mind risk initiating such a sequence of events? The succinct answer of Senator John McCain is that although attacking Iran would be bad, an Iran with nuclear weapons would be worse. He is not alone: most of America’s presidential candidates would consider military force. If Iran really is no more than the “messianic cult” of Mr Netanyahu’s imagination, it would be worth running almost any risk to stop it acquiring nuclear weapons. But as our special report argues, Iran is not that easy to read. Iran is a self-proclaimed theocracy.

Yet it has conducted foreign relations since the revolution of 1979 in a way that seems perfectly rational even if it is not pleasant. Its president, the Holocaust-questioning Mahmoud Ahmadinejad, is widely reported to have threatened to “wipe Israel off the map”. But in fact he may never have uttered those precise words, and there is both ambiguity and calculation behind the bluster. Look closer and Mr Ahmadinejad is vague about whether he means that Iran should destroy Israel or just that he hopes for Israel’s disappearance. Knowing that a nuclear attack on Israel or America would result in its own prompt annihilation, Iran could probably be deterred, just as other nuclear powers have been. Didn’t Nikita Khrushchev promise to “bury” the West? Since Israel has memories of a real Holocaust, it may not set much store by that “probably”. This newspaper continues to believe that even for Israel containment of a nuclear Iran would be less awful than a risky pre-emptive attack that would probably cause mayhem, strengthen the regime and merely delay the day Iran gets a bomb. Yet the whole world still has a huge interest in preventing that day from coming. Even if Iran never used its bomb, mere possession of it might encourage it to adopt a more aggressive foreign policy than the one it is already pursuing in Iraq, Lebanon and the Palestinian territories. And once Iran went nuclear other countries in the region—such as Saudi Arabia, Egypt and perhaps Turkey—would probably feel compelled to follow suit, thereby entangling the Middle East in a cat’s cradle of nuclear tripwires. Is there a way to avoid all of the unhappy endings by finding a peaceful way to stop Iran going nuclear? The Europeans hoped they had stumbled on such a solution last year, when they at last talked Russia and China into imposing sanctions and George Bush into dangling the prospect of normal relations with Iran once enrichment stopped. But the mild sanctions imposed so far are not working, and now the technological clock in Natanz is outrunning the diplomatic clock at the United Nations. Iran may soon work out how to spin its centrifuges at full speed for long periods; and once it learns how to do that the odds of stopping it from building a bomb will rapidly lengthen. This suggests that a third sanctions resolution, with sharper teeth, needs to be enacted without delay. Iran is obstinate, paranoid and ambitious. But it is also vulnerable. A young population with no memory of the revolution is desperate for jobs its leaders have failed to provide. Sanctions that cut off equipment for its decrepit oilfields or struck hard at the financial interests of the regime and its protectors in the Revolutionary Guards would have an immediate impact on its own assessment of the cost of its nuclear programme. That on its own is unlikely to change the regime’s mind. If at the same time Iran was offered a dignified ladder to climb down—above all a credible promise of an historic reconciliation with the United States—the troubled leadership of a tired revolution might just grab it. But time is short.

Source: Economist

Posted by Editors at 23:41:42 | Permalink | No Comments »

ABC News Exclusive: Deal in Works to Release Americans Detained in Iran

 Dealsinworks_mnU.S. intelligence officials tell ABCNews.com. A deal is in the works to gain the release of four American civilians being detained in Iran. The officials say the appearance of two of the Americans on Iranian television this week was “part of the process.” A U.S. State Department spokesman said he was unaware of any deal but said, “I hope it is true.” Earlier this week, the State Department said it was “appalled at the mistreatment” of the two Americans who were “paraded” on state-run television. Like almost every dealing between the U.S. and Iran, this one touches on the sensitive and volatile issue of nuclear weapons and sanctions.

 

The U.S. officials told ABCNews.com that a European country is brokering the deal, which they say Iran hopes will help delay a third set of sanctions being considered by the United Nations Security Council over Iran’s refusal to halt its nuclear program. Three of the Americans are being held in an Iranian prison and a fourth, Parnaz Azima, of the U.S.-funded Radio Farda, has been released on a $50,000 bail. Iran has previously admitted holding Haleh Esfandiari, of the Washington-based Woodrow Wilson Center; Ali Shakeri, a California businessman; and Kian Tajbakhsh, a consultant for the Soros Open Society Institute. The officials say a fifth American, former FBI agent Robert Levinson, is not part of the deal. Levinson disappeared in Iran in March. U.S. officials believe he is in a Tehran prison although Iran has never acknowledged he is in custody.

Posted by Editors at 01:10:24 | Permalink | No Comments »