LAT : U.S. move on Iran alienating for Europe

U.S. move on Iran alienating for Europe

Frustration over its failure to impose a third round of international sanctions on Tehran pushes the administration to strike out on its own.

By Paul Richter, Los Angeles Times Staff Writer | October 26, 2007

WASHINGTON -- The Bush administration's new package of sanctions against Iran widens the gap between the United States and its European allies over how to confront Tehran.

For two years, the administration has sought to work closely with Europeans and other world powers, convinced that collective action offered the best chance to pressure Iran to abandon its nuclear ambitions.

But efforts to push through a third round of United Nations sanctions snagged and prospects for a new international coalition to impose economic penalties appear unlikely, so the administration decided to strike out on its own Thursday.

Secretary of State Condoleezza Rice and Treasury Secretary Henry M. Paulson Jr. announced unilateral sanctions that aim to cut off Iran's Revolutionary Guard Corps, three key Iranian banks and others from any contact with the worldwide U.S. financial system.

The State Department designated Iran as a state sponsor of terrorism in 1984. The sanctions imposed Thursday are aimed at any remaining financial ties.

Although few such ties are left between U.S. firms and Iranians, officials hope that the effect will be powerfully amplified with other international companies and banks shunning the Iranians to avoid jeopardizing their contacts with the United States.

Advocates say this approach will hit the Iranian elite where it most hurts. But it also puts the United States on a separate track from the Europeans. And U.S. intervention in European business interests could deepen the unwillingness of European countries that already are reluctant to take part in any U.S. actions.

Rice stressed that the United States was committed to a diplomatic solution, although she followed that comment with a warning to Tehran, saying if it chose a path of confrontation, the U.S. and other countries would "resist these threats."

The new steps are bound to appeal to administration and congressional hard-liners, led by Vice President Dick Cheney, who favor a tough U.S. approach to Iran. However, some Democrats criticized the announcement as an indication that President Bush considers military action a first resort.

The U.S. move was praised by the British government, but was considered unlikely to be welcomed by others, such as Germany.

"Those [in Europe] who were reluctant yesterday will probably be more so tomorrow," said one senior European official in Washington, speaking on condition of anonymity in keeping with diplomatic protocol.

The U.S. designation named the Revolutionary Guard Corps as a proliferator of weapons of mass destruction, and labeled its Quds Force unit as a supporter of terrorism. It said Iran's Bank Melli and Bank Mellat had helped finance Tehran's proliferation program, and that Bank Saderat has taken part in financing terrorism.

Five Revolutionary Guard Corps leaders, nine other businesses and the Iranian Ministry of Defense and Armed Forces Logistics also face sanctions.

Iran denies U.S. accusations that its uranium enrichment program is aimed at developing nuclear weapons, saying it is only for civilian energy purposes. Tension between Washington and Tehran has been heightened during the last year by U.S. charges that Iran is supplying Iraqi insurgents.

Reports in August that U.S. officials were considering even more drastic sanctions touched off an outcry among Europeans, who read such a move as a clash with Iran over Iraq rather than over nuclear enrichment. Europeans told U.S. officials that they did not want to conflate the two issues.

U.S. officials have been frustrated recently by the Europeans' reluctance to impose sanctions through the European Union.

At a meeting last week in Brussels, Britain and France showed support for the idea, whereas Italy and Austria opposed it and German officials were lukewarm.

U.S. Undersecretary of State R. Nicholas Burns, the administration's point person on Iran, said in an interview that the sanctions would not alienate European allies.

"Countries want to see diplomacy succeed, and you'll see the Europeans go ahead with their own [sanctions] effort," he said. He said the United States had heard from many who support the move, although he acknowledged that "the reaction has not all been positive."

J. Scott Carpenter, a top State Department official on the Middle East until last month, favors the new package but said European cooperation was vital.

At this point "only they can add anything to the sanctions regime," said Carpenter, now a scholar at the Washington Institute for Near East Policy. He said he believed the U.S. package would make it more difficult to win over the divided European community.

Suzanne Maloney, a top Iran analyst at the State Department until this year, said the sanctions appeared to be a recognition by the administration that European cooperation was unlikely.

Maloney, now at the Brookings Institution's Saban Center for Middle East Policy, said Europeans have been reluctant to adopt sanctions, especially ones that are written into law and can't be quickly reversed.

"You always inevitably get a lot of talk," she said. "But when push comes to shove, they don't take such steps."

The Iranian government did not comment on the new U.S. steps Thursday. But Western diplomats and Iranian businessmen acknowledge that U.S. restrictions already in place on banking with Iran have become a major inconvenience, although perhaps for the wrong people.

Wire transfers and letters of credit used in the import-export business have become difficult as international banks shy away from doing business with Iran.

Diplomats say that some Western embassies in Tehran now pay staffers and other expenses by bringing bundles of hundred-dollar bills into the country.

Without international support, unilateral U.S. sanctions won't have much impact, experts say. Companies such as French oil behemoth Total continue huge oil exploration projects in Iran. Renault, Peugeot and BMW continue automotive joint ventures.

As Rice detailed the sanctions, Ryan Crocker, the U.S. ambassador to Iraq, said that intermittent meetings in Baghdad between U.S. and Iranian officials probably would proceed. He and his Iranian counterpart have met twice, and Crocker said he expected another session "at some point."

Crocker said Iran may have played a positive role in the recent reduction in Shiite Muslim militant activities in Iraq, including by militias affiliated with radical cleric Muqtada Sadr, but that he could not be sure.

paul.richter@latimes.com

Times staff writers Borzou Daragahi in Beirut, Ned Parker in Baghdad and Kim Murphy in London contributed to this report.