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Britain and Europe to tighten sanctions on Iran By Steven Lee Myers Monday, June 16, 2008 LONDON: Prime Minister Gordon Brown announced Monday that Britain and Europe would freeze the overseas assets of Iran's largest commercial bank, joining the United States in intensifying financial pressure against Iran over its refusal to address international concern over its nuclear activities. Brown, appearing with President George W. Bush after discussions here, also pledged to send additional troops to Afghanistan, and indicated that he would not bend to political pressure at home to withdraw British forces in southern Iraq more quickly. Both leaders said that they remained open to resolving the dispute with Iran diplomatically, but only after it suspended uranium enrichment. Bush and others hold that Iran intends to develop nuclear weapons; Iran's leaders insist the nuclear program is for peaceful purposes. Iran offered a cold welcome to a proposal from Western powers delivered Saturday that offered economic and diplomatic incentives to suspend enrichment and begin talks to resolve unanswered questions about its nuclear work. While Iran has not yet formally responded to the new proposal, Brown announced that Europe would move to restrict European transactions of the Iranian bank, Bank Melli, immediately. He also said that if Iran continued to defy existing United Nations resolutions calling for it to halt uranium enrichment, European leaders would begin considering sanctions on investments in Iran's oil and natural gas industries. That would be a far more significant penalty, though one that causes unease because of already soaring global energy prices. "We await the Iranian response and we'll do everything possible to maintain the dialogue," Brown said at a news conference with Bush at the Foreign and Commonwealth Office. "But we are also clear that if Iran continues to ignore united resolutions, to ignore our offers of partnership, we have no choice but to intensify sanctions." Iran did not immediately respond to Brown's announcement, but economists in Tehran said sanctions could put further strain on Iran, especially at a time when Iran is highly dependent on imports, from Europe in particular, forcing it to look elsewhere for trade. "The sanctions will put further pressure, but Iran can use its windfall oil revenue and pay further costs to import through smaller banks," said Saeed Leylaz, an economist. "Iran will also shift its trade from Europe to Asia, to countries like China and India, even Russia, which are still willing to do trade with Iran despite the sanctions." New sanctions would be the latest move to gradually increase punitive measures against Iran, while offering an option to ease them if its government, led by President Mahmoud Ahmadinejad, backed away from its enrichment program. The European Council, the administrative body of the European Union, has yet not adopted the sanctions, nor were they discussed at a meeting Monday of the union's foreign ministers, though Bush's national security adviser, Stephen Hadley, announced that they would be. European diplomats, speaking on condition of anonymity about the deliberations, said the foreign ministers were in broad agreement about imposing the bank measure soon. Divisions remain, however, about the sanctions against the oil and gas sector. Still, a senior British official, speaking on condition of anonymity in keeping with government policy, said the sanctions were expected to be formally adopted "in the next few days." Although the pressure on Iran has been glacial in pace, it appears to have had some effect. A newsmagazine in Iran, Shahrvand Emrouz, reported that $75 billion had been withdrawn from European banks and returned to Iran in the last week in anticipation of steps like the ones Brown announced. The United States, which severed diplomatic relations and most economic ties with Iran after the Islamic revolution in 1979, has long sought to interfere with Iran's offshore financial transactions. The Bush administration imposed largely symbolic sanctions against Bank Melli, which handles most of Iran's overseas trade, and other banks last autumn. "If we freeze the assets of Bank Melli, they start to run out of places they can do business in Europe," the British official said. "That starts to apply real pressure." Brown's strong support for Bush on Iran, Afghanistan and Iraq came as Bush was ending a weeklong visit to Europe that featured confrontations over a variety of issues but produced what administration officials described as progress in several areas. Brown's announcement of additional troops to Afghanistan was designed to bolster the NATO mission there at a time when the alliance has been accused of responding slowly to reemerging threats from the Taliban and other militants and tying its own hands with individual limits on certain operations. Frustrated American defense officials have urged the NATO allies to contribute more forces and let those there operate more aggressively. Britain has 7,800 troops serving in Afghanistan, second only to the United States, which has 34,000, some operating within the NATO-led operation. The NATO force has more than 50,000 troops in all. The British defense minister, Desmond Browne, later told Parliament that 230 more troops, including engineers, trainers and reconnaissance specialists, would deploy to Afghanistan. That would bring the British total by next spring to more than 8,000. An official traveling with Bush said that while the additional number might seem small, the new troops would not operate with the constraints other nations have imposed on their forces serving there. The announcement came as the bodies of five British soldiers killed in Afghanistan last week returned home. Since 2001, 102 British soldiers have died in Afghanistan. The two leaders, whose relationship has appeared cooler than that between Bush and Brown's predecessor as prime minister, Tony Blair, also expressed solidarity on Iraq. The war's unpopularity has led to calls here for more rapid withdrawals and prompted speculation in the press that Brown might clash with Bush over withdrawing the remaining 4,200 British troops from Iraq by the end of the year. "Can I just say that in Iraq there is a job to be done and we will continue to do the job," Brown said, "and there's going to be no artificial timetable." In a television interview broadcast Sunday night, Bush tried to deflect questioning on whether his relationship with Brown could ever be as close as that with his predecessor. He said each relationship was unique, shaped by different times and events. "Blair's and my relationship was forged in fire," he said on Sky News. Bush and Brown are both deeply unpopular domestically, fueled by resentment over Iraq and staggering economies. Bush praised Brown's resoluteness. "He's tough on terror," he said, "and I appreciate it." Bush has already visited Slovenia, Germany, Italy, the Vatican and France, a trip he himself described as a farewell tour a week ago. As the week went on, Bush and his aides appeared annoyed with tributes that tended to highlight the end of his presidency. "You kind of wrote my political obituary," Bush told President Nicolas Sarkozy of France after a glowingly reminiscent toast. On Monday, Bush had another message for Europe and its leaders: "By the way, some are speculating this is my last trip. Let them speculate. Who knows?" Alan Cowell contributed reporting from Paris, Nazila Fathi from Tehran and Stephen Castle from Luxembourg. The New York Times
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