February 02, 2010 - 14:13
West eyes Iran central bank in sanction push

By Louis Charbonneau

UNITED NATIONS (Reuters)

The United States and three European powers hope to blacklist Iran's central bank and firms linked to the Revolutionary Guard Corps in a new round of U.N. sanctions over Tehran's nuclear program, diplomats said.

Western powers have called for a fourth round of U.N. measures against Iran for refusing to halt uranium enrichment activities as demanded by five Security Council resolutions.

Iran insists it has a sovereign right to produce nuclear fuel for what it says is a peaceful civilian atomic energy program. The West fears Tehran's program is aimed at developing nuclear weapons.

The United States, Britain, France and Germany want to reach an agreement this month with Russia and China -- which have veto power on the Security Council and have opposed tough sanctions in the past -- so that they can begin work on a new U.N. sanctions resolution as soon as possible.

Western diplomats told Reuters that officials at the U.S. State Department have circulated a paper outlining possible new sanctions to senior foreign ministry officials in London, Paris and Berlin.

Officials from the four Western powers will hold a conference call soon, possibly later this week, to try to agree on a sanctions proposal to put to Moscow and Beijing, the diplomats said, speaking on condition of anonymity.

At a meeting in New York last month, senior foreign ministry officials, known as political directors, from five of the six powers discussed Iran's nuclear program. Diplomats said China sent a low-level envoy who declared Beijing felt it was not the right time to pursue further sanctions against Tehran.

U.S. plans to sell $6.4 billion (4 billion pound) in weapons to Taiwan, diplomats noted, could complicate negotiations with China.

Diplomats in New York said the four Western powers wanted to present as ambitious a sanctions package as possible to Russia and China, which have lucrative economic ties to Iran, because it would be watered down in subsequent negotiations.

They said the confidential U.S. proposal, described as a working document that would be revised, covered general areas where new or broader sanctions could be imposed -- including expanding existing travel bans and asset freezes to other Iranian individuals and companies.

TARGETING IRAN'S ENERGY SECTOR?

Several diplomats told Reuters the Western powers would like to target Iran's central bank, which they said was a key player in financing Tehran's nuclear and missile industries and in skirting U.N. sanctions.

It was not clear which other banks would be targeted. One diplomat said they were looking at Iran's five biggest banks.

Two previous sanctions resolutions passed in March 2007 and March 2008 blacklisted Iran's Bank Sepah and urged countries to "exercise vigilance" over the activities of all Iranian financial institutions, above all Bank Melli and Bank Saderat.

Iran's energy sector could also be a target, diplomats said, although they doubted Russia and China would support such measures.

"The French are pushing the strongest for energy sanctions," one diplomat said. "They say energy sector revenues are helping to support the missile and nuclear industries."

Another diplomat confirmed this.

Diplomats said Britain and the United States do not oppose energy sector sanctions, although they want a quick consensus among the five permanent Security Council members and Germany.

"If they go for the energy sector, Russia and China will oppose it," one diplomat said. "If they want to get a resolution to the Security Council quickly, and to get Russia's and China's support, they can't target the energy sector."

In November, Security Council diplomats said Western powers had resigned themselves to the impossibility of getting the Security Council to back sanctions on Iran's oil and gas industries due to Russian and Chinese resistance.

One area where the four Western powers are in total agreement, diplomats said, is the Iranian Revolutionary Guard Corps (IRGC).

"We all favour designating key IRGC members and IRGC-controlled entities," a diplomat said.

A senior U.S. State Department official denied that Washington, London, Paris and Berlin would reach a consensus among themselves before turning to Moscow and Beijing.

"We have consulted all of them," he said, adding the six powers were "some time away from putting any specific actions into the form of a draft resolution."

Diplomats said the Western powers hope to have an agreement among the six this month so they could turn it into a draft resolution that could be put to a vote in the 15-nation Security Council before the end of March.

(Additional reporting by Arshad Mohammed in Washington and Dave Graham in Berlin; Editing by John O'Callaghan)

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