EU ministers postpone decision on new Iran sanctions

By Sebastian Moffett and Justyna Pawlak | Reuters

BRUSSELS (Reuters) - European Union foreign ministers spoke out in favor of tougher sanctions against Iran Monday, but decided to wait until their next meeting on Dec 1. before taking further action. The ministers, meeting in Brussels, also ruled out any military action for now, despite last week's conclusion by the International Atomic Energy Agency (IAEA) that Tehran had worked on designing a nuclear bomb. "The Council will continue to examine possible new and reinforced measures and revert to this issue at its next meeting, taking into account Iran's action," the ministers said in a statement.

The United States and Israel have refused to rule out any way of stopping Iran from acquiring a nuclear arsenal. But the EU ministers limited themselves to condemning Iran's expanding uranium enrichment program and expressing concern over the IAEA findings that Iran was developing military nuclear technology. Arriving for the meeting, British Foreign Secretary William Hague said Britain was not yet considering military action. "We are not calling for, or advocating, military action," he said. "At the same time, we are saying that all options are on the table." He called for "peaceful, legitimate pressure" to be stepped up on Iran.

German Foreign Minister Guido Westerwelle said: "Sanctions are unavoidable and harsh sanctions are unavoidable too if Iran continues refusing to work with the IAEA." "Iran has the right to use civil nuclear power but also has the duty to refuse all means of nuclear weaponry and to make this clear before the international community," he said. He said Germany would not consider military intervention. "We won't be part of a discussion about a military intervention ... such a discussion is counter-productive." Dutch Foreign Minister Uri Rosenthal, asked about possible military intervention, said: "I don't exclude anything, now is not the moment to say anything else."

MAPPING OUT SANCTIONS

Diplomats in Brussels say EU foreign ministers may be ready to formally approve new sanctions on December 1. No specific measures have been discussed publicly so far, but one western diplomatic source said EU sanctions could focus on adding companies to a list of entities targeted by EU asset freezes in order to curb financial flows to Iran's elite military force. "The goal is to try to deny funding to the Revolutionary Guard. We don't want to target the energy sector as a whole but only where there is evidence that the money is flowing to groups that are prohibited," the source said.

Sweeping sanctions against Iran's energy sector could backfire in Europe, where governments are wary of inflicting damage on their commercial interests at a time of deepening economic woes. There are also divisions among EU governments on how to structure any new moves to minimize any pain on the Iranian population. Some capitals are also wary of shutting off lines of communication when Iranian officials are targeted.

Finally, a lack of international cooperation blunts the impact of Western moves, with experts saying Iranian firms often create front companies elsewhere to avoid sanctions. "We are looking at an expanded list of companies to stop the financial flows but Indian entrepreneurs are particularly good at setting up banks and finding mechanisms to help finance deals. It's extremely difficult," the Western source said. Iran already faces a wide range of U.N. sanctions, as well as some imposed unilaterally by the United States and the EU.

Western states would prefer further U.N. Security Council measures against Tehran. But Russia and China, both permanent Security Council members with veto power, are opposed. Tehran, which says its nuclear program is for producing electricity and other peaceful purposes, said last week it remains ready for negotiations with world powers on the issue.

(Additional reporting by David Brunnstrom and Robert-Jan Bartunek in Brussels, Emma Farge in London; Writing By Sebastian Moffett and Justyna Pawlak; Editing by Tim Pearce)