EU trio targets tougher list of Iran sanctions

France, Germany and the UK - the so-called EU3 - are proposing a tough list of additional sanctions to be imposed against Iran in order to give the Obama administration more muscle in its expected engagement of the Islamic republic.

A confidential document seen by the Financial Times and Il Riformista, an Italian newspaper, lists 34 Iranian entities and 10 individuals allegedly linked to Iran's covert nuclear or biological weapons programmes.

European diplomats confirmed the existence of the list but differed over the reasoning behind it. Some said it was intended to provide Washington with a "bigger stick" option in continuation of the existing carrot-and-stick approach. Others said the EU3 wanted to influence a more hardline outcome of Washington's current review of its Iran policy, expected to be completed next month.

Internal debate has already reopened European divisions. Diplomats said five countries - Greece, Cyprus, Spain, Austria and Sweden - were opposed.

Bernard Kouchner, French foreign minister, is said to have argued for a strong common European front regardless of Washington's next tack. The UK views it as a post-review option.

The six-page list includes some entities already listed by the US and the United Nations for sanctions. But all the individuals on the new EU-wide sanctions proposal face penalties for the first time, including the commander and deputy of the paramilitary Basij force.

Some state-run organisations are named for the first time, including the prestigious Sharif University of Technology, Iran Insurance Company, Iran Air Cargo, which is affiliated to the state-owned airliner, Khatam ol-Anbia, a construction contractor affiliated to the elite Revolutionary Guards, Iran Space Agency and Razi Institute for Serum and Vaccine Production.

Six banks and their Tehran headquarters are named, including Bank Tejarat, one of Iran's largest commercial banks, for the first time. Previous EU sanctions were directed mostly at foreign affiliates.

Critics argue that the policy of coercion has failed so far, leading to an impasse over the nuclear issue and negative repercussions for efforts to influence Iranian behaviour in other crucial areas, such as Iraq, Afghanistan and the Israeli-Palestinian conflict.

Trita Parsi, Washington-based head of the National Iranian American Council, which urges direct dialogue between Iran and the US, is concerned that the US will stick to "the mentality of threats and coercion".

He also sees a danger of losing a comprehensive approach. "It would be alarming if on the one hand Iran is invited to the [G8] Afghan conference in June and at the same time sanctions are slapped on Sharif University," he said.

Dennis Ross, a veteran Mideast negotiator, was appointed on Tuesday as the US state department's special adviser for the Gulf and south-west Asia. Mr Ross has championed a more forceful carrot-and-stick policy and helped shape Mr Obama's stance on Iran during the election campaign.

Franco Frattini, Italy's foreign minister, is expected to meet Richard Holbrooke, US envoy for Afghanistan and Pakistan, in Washington today to discuss Iran's possible participation in the regional conference proposed by Italy as holder of the G8 presidency.

In Tehran, a regime insider said he doubted further sanctions could make Iran change its nuclear policy. Iran continues to enrich uranium to a low level in defiance of UN resolutions. UN experts said last week that Iran had produced enough for a nuclear bomb but only if it undertook the highly visible and protracted step of enrichment to weapon grade levels.

Source: The Financial Times