UPDATE 3-EU tightens screw on Iran with extra sanctions

* EU foreign ministers target Iran oil, gas investment

* Details to be published on Tuesday

(Adds reaction from Iranian official, paragraphs 5-7)

By Luke Baker

BRUSSELS, July 26 (BestGrowthStock) – The European Union imposed
tighter sanctions on Iran over its disputed nuclear programme on
Monday, approving measures to block oil and gas investment and
curtail Tehran’s refining and natural gas capability.

The restrictions go well beyond sanctions imposed by the
United Nations last month and mirror steps taken by the United
States this month to apply extra pressure on Tehran to return to
negotiations over its uranium enrichment programme.

The measures include widespread limits on dealings with
Iranian banks and insurance companies and were accompanied by a
call from EU foreign ministers for Iran to resume talks over its
enrichment work, which Western powers see as a covert quest for
nuclear weapons. Iran says it is for peaceful purposes only.

Diplomats conceded that the sanctions’ impact will depend on
steps to enforce them fully, a problem in the past.

A spokesman for the Iranian foreign ministry dismissed the
EU’s new restrictions, saying they would not affect Iran.

“Sanctions will only further complicate the conditions and
they will have no impact,” Ramin Mehmanparast was quoted as
saying by the official news agency IRNA.

“One should think about the necessity of cooperation by all
countries in resolving the global crisis.”

Britain, which with France and Germany has been the heart of
the push for extra Iran sanctions, welcomed the EU’s move.

“The message to the Iranian Government could not be clearer:
the longer it refuses to talk … about its nuclear programme,
the greater the pressure and isolation Iran will bring upon
itself,” Foreign Secretary William Hague said.

“But Iran does have a choice: Britain and the international
community stand ready to engage, and still believe that the way
forward on this issue is multilateral negotiation.”

The extra sanctions, which also limit dealings with Iran’s
state shipping company and with air cargo flights, will not
legally come into force until they are published in the European
Union’s official journal on Tuesday, diplomats said.

Perhaps the hardest-hitting element of the sanctions is the
move to prohibit new investment in and technical assistance to
Iran’s refining, liquefaction and liquefied natural gas sectors
which are a mainstay of Iran’s energy-based economy.

There is a broad clampdown on the “supply, sale or transfer
of items, materials, equipment, goods and technology” that could
have “dual-use” — civilian or military — purposes, including
software, and curbs on financial transfers and bond sales or
purchases.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a factbox on some of the measures, please double click
on [ID:nLDE66D0Y3]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

PRESSURE AND DIPLOMACY ALIKE

The broadened sanctions are intended to apply financial heat
on Iran, which is the world’s fifth largest crude oil exporter
but has little refining capability and has to import around 40
percent of its gasoline needs for domestic consumption.

Traders said this month Iran was depending more on friendly
countries for fuel supplies to sidestep sanctions intended to
hinder its fuel imports, and was buying about half of its July
gasoline imports from Turkey and the rest from Chinese sellers.

Only three cargoes of gasoline have so far reached Iran this
month, however, according to shipping documents seen by Reuters,
a sign that sanctions are biting. Because Iran subsidises fuel
for consumers, pump prices will not be affected. [ID:nLDE66P1GA]

While China, Turkey, Malaysia and others may now step in to
furnish Iran with goods it will no longer be able to get from
the European Union, analysts said the EU sanctions were
well-enough designed to ensure they would be effective.

“Most of the sectors that have been targeted in the EU
sanctions are ones over which Europeans have a substantial
leverage,” Mark Fitzpatrick, an Iran specialist at the
International Institute for Strategic Studies, told Reuters.

“Not so many other countries can provide the kind of
financial services that will be cut off. Few other countries
supply technology for liquefied natural gas, nobody else does
re-insurance … The European Union has very wisely found areas
over which it has real leverage and cannot be supplanted.”

As part of its “dual-track” approach that twins sanctions
and diplomacy, the EU is also hoping that Iran will agree to
resume negotiations last carried out in October 2009.

The EU foreign affairs chief, Catherine Ashton, and Iran’s
chief nuclear negotiator, Saeed Jalili, have exchanged letters
in the last few weeks and it looks possible that they will meet
for talks as early as September, diplomats say.

Iran experts caution that any resumption of talks — the
first negotiations with the West since October 2009 — are
unlikely to produce quick results, instead beginning a lengthy
process of Iran manoeuvring to get sanctions lifted and the West
seeking a moratorium on its uranium enrichment.

Iran says it has an inalienable, sovereign right to nuclear
energy for civilian purposes and this will not be negotiable.
Growth Stocks

(Additional reporting by David Brunnstrom and Justyna Pawlak
in Brussels, Amena Bakr in Dubai and Luke Pachymuthu in
Singapore; Editing by Mark Heinrich)

UPDATE 3-EU tightens screw on Iran with extra sanctions