David Cameron joined the leaders of France and Germany to accuse Iran of threatening the “peace and security of us all” on Monday as the European Union imposed sweeping sanctions and an unprecedented oil embargo on the Islamic republic.
The steps, agreed by EU foreign ministers in Brussels, amounted to the most punitive restrictions yet imposed on Iran. All member states have signed up to an immediate ban on any new contracts for the purchase or transport of Iranian crude oil or refined petroleum.Any existing agreements will be honoured until July 1, after which all imports must cease. Last year, EU countries – mainly Greece, Italy and Spain – bought almost 600,000 barrels of oil from Iran every day, accounting for 24 per cent of the country’s total exports.
Mr Cameron issued a rare joint statement with President Nicolas Sarkozy of France and Angela Merkel, the German Chancellor. The three leaders described the sanctions as “unprecedented,” adding: “The Iranian leadership has failed to restore international confidence in the exclusively peaceful nature of its nuclear programme. We will not accept Iran acquiring a nuclear weapon. Iran has so far had no regard for its international obligations and is already exporting and threatening violence around its region.”
The leaders urged Iran to obey six United Nations resolutions and stop enriching uranium. “The door is open to Iran to engage in serious and meaningful negotiations about its nuclear programme,” they said. Until then, Mr Cameron and his French and German counterparts promised to be “united behind strong measures” that would demonstrate to Iran the “cost of a path that threatens the peace and security of us all”.
In addition, the EU has imposed financial sanctions, freezing assets held in Europe by the Iranian Central Bank and banning any trade in gold, diamonds and precious metal with Iranian public bodies. Eight new financial institutions will be added to an existing list of Iranian entities subjected to asset freezes in the EU. Their identities will be disclosed on Tuesday. However, Bank Tejarat, the last Iranian bank with a sizeable operation in the EU, is understood to have been included for the first time.
The final details of any measures taken against this bank are unclear. They are expected to be complex in order to minimise any disruption to legitimate trade: EU exports to Iran still totalled £9.5 billion last year. But any restrictions could have significant consequences.”The downside to the EU in placing Tejarat on the asset freeze list is that this will make it more difficult moving forward to track the flow of funds going to and from Iran,” said Nigel Kushner, chief executive of Whale Rock Legal, which advises on sanctions and export controls. “This will be driven underground through international money exchanges, private financiers and barter deals.”
The oil embargo follows over six months of negotiations designed to cushion the highly indebted Mediterranean members from any damage. Greece, Italy and Spain import 450,000 barrels of Iranian crude every day, often on preferential terms. To fill the gap, Saudi Arabia and Kuwait are expected to increase their own output.The sanctions will also be reviewed on 1 May and the imposition of a full embargo could be delayed if supply problems are encountered.Iran responded on Thursday by repeating its threat to close the Strait of Hormuz, a vital link in the global oil supply chain. Mohammed Ismail Kowsari, deputy chairman of the Iranian parliament’s national security committee, said the waterway “would definitely be closed if the sale of Iranian oil is violated in any way.”
Ivo Daalder, the US ambassador to Nato, sent a conciliatory signal, saying: “We are ready at any time to sit down with them and have a conversation about how to resolve this issue through negotiation. Increasing the isolation of Iran is designed to confront it with a fundamental choice, between either finding a way to cooperate to find a resolution to this issue ..or choosing the path of further isolation.”Benjamin Netanyahu, the Israeli prime minister, offered a guarded welcome, describing the EU’s decision as a “a step in the right direction”. However, he also expressed concern that the oil embargo would be phased in over six months, noting that time was of the essence in constraining Iran’s nuclear ambitions.
One Israeli official said the latest measures were qualitatively different from any that had gone before. “With these sanctions, the EU has now moved into a regime change dynamic in the sense that the Iranian government now faces questions over its survival if it persists in its nuclear programme,” the official said. “But the EU is still behind the curve because, although the sanctions are crippling, by the time they bite it may be too late and Iran will have passed the threshold. – Thetelegraph