Israel praised the EU on Monday for deciding to ratchet up sanctions on the Islamic Republic, saying this sent a strong message to Tehran that Europe was “not letting Iran off the hook” until it ceased its nuclear march.
“This is definitely an important step that sends the right and strong message to the Tehran regime,” Foreign Ministry spokesman Yigal Palmor said.
Foreign Minister Avigdor Liberman said on Sunday that the failure of the EU to send a strong message at this time would be similar to the West’s failure to stop Hitler in the 1930s.
The EU’s 27 foreign ministers agreed at their monthly meeting in Luxembourg to clamp further sanctions against Iran’s banking, shipping and industrial sectors, hoping this would draw Tehran into serious negotiations on its nuclear program.
Three rounds of negotiations since April between Iran and the US, Russia, China, Germany, France and Britain – a group known as the P5+1 – led nowhere.
EU foreign policy chief Catherine Ashton said she hoped that turning up the heat on the Islamic Republic would persuade it to make concessions and that negotiations could resume “very soon.”
"I absolutely do think there is room for negotiations,” said Ashton, who represents the P5+1 in the talks. “I hope we will be able to make progress very soon.”
German Foreign Minister Guido Westerwelle was more pessimistic than Ashton about the prospect that additional economic pain might drive Tehran – whose Islamic Revolution has long thrived on defiance of the West – to make concessions.
“Iran is still playing for time,” he told reporters. “We don’t see a sufficient readiness for substantial talks about the nuclear program.”
The new sanctions mark one of the toughest moves against Iran by Europe to date and a significant change of policy for the 27-member bloc, which until now focused on targeting specific people and companies with economic restrictions.
The EU has lagged behind the US in imposing blanket industry bans, and says this is because it is concerned about punishing ordinary Iranian citizens while inflicting pain on the government.
The EU sanctions are deemed by some as more significant than Washington’s because the bloc does much more business with Iran than the US.
The foreign ministers, who already clamped an embargo on Iranian oil this summer, also decided to freeze the assets of 34 Iranian entities to hinder the government’s ability to raise funds for its nuclear program.
As a part of the new package, the EU also prohibited transactions between European and Iranian banks except for those “explicitly authorized in advance by national authorities under strict conditions,” to ensure that the bloc’s financial institutions do not process funds that contribute to the Iranian nuclear program, according to an EU statement. Restrictions were also tightened on Iran’s central bank.
The new restrictions also include a ban on exports to Iran of materials that could be used in the its nuclear and ballistic programs, in particular graphite, aluminum and steel as well as industrial software. In addition, the EU prohibited the import of natural gas from Iran and broadened the existing export ban on key equipment for the Iranian oil, gas and petrochemical industries.
Furthermore, the package imposed new restrictions in the shipping industry, prohibiting the use of vessels that belong to EU citizens and companies for transporting or storing Iranian oil and petrochemical products. The ministers banned flagging and classification services for Iranian oil tankers and cargo vessels, and decided that EU nations will no longer support trade with Iran through new short-term export credits, guarantees or insurance.
In a reversal of existing European policy, the ban will require European traders to apply to their governments for authorization before they can finance any transactions in permitted goods. Previously, the EU’s more narrow approach was to allow trade broadly while prohibiting specific products. Trade will be hampered further by a new ban on European governments extending short-term trade guarantees.
Diplomatic officials said the three EU countries involved in the direct negotiations with Iran – Germany, France and Britain – were the driving force behind the sanctions. Sweden and Austria were among the EU countries that argued for more watered down steps.
The Netherlands was another one of the EU states leading the diplomatic efforts to secure a tough sanctions package. Its ambassador to Israel, Caspar Veldkamp, told The Jerusalem Post that these steps “show our determination, as 27 EU member states, to continue to exert full pressure on Tehran’s regime.”
“It is not acceptable that Iran still does not meet its international obligations,” he said. “Until the moment that they do, we will have to continue to increase the pressure. As far as the Netherlands is concerned, we’re not speculating about other options right now. But they are not excluded either.”
Mark Dubowitz, the executive director of the Washington-based Foundation for Defense of Democracies and an Iran sanctions expert, said, “These EU sanctions fill loopholes in the current sanctions regime, but they are a long way from the sweeping action required to deal with the only fundamental question that matters: Will Iran reach an economic cripple date – when its foreign reserves prove insufficient to head off economic collapse – before or after it becomes a threshold nuclear power? “Based on our analysis of Iran’s balance of payments, Iranian foreign reserves could last at least two years under current conditions. If so, Iranian nuclear physics will beat Western economic pressure,” Dubowitz continued.
“Europe needs to go to the next stage and ban all non-humanitarian trade with Iran and blacklist Iran’s central bank for its support of proliferation and terrorism. Only if the economic pressure is massively intensified will we know if economic collapse is enough to break Iran’s supreme leader’s nuclear will.”
The widening sanctions are already doing significant damage to the Iranian economy. Earlier this month, riots broke out in Tehran in protest at the collapse of the rial currency, which has lost some two-thirds of its value against the dollar in the past 15 months, stoking inflation that is now running at around 25 percent.
Ashton last met Iran’s chief negotiator Saeed Jalili in Istanbul in September for a session that her spokesman described as “useful and constructive.”