EU Enacts New Sanctions On Iran Including Oil Ban, Banking Sanctions

BRUSSELS (Dow Jones Newswires), Jan. 24, 2012

The European Union Tuesday enacted new sanctions on Iran, including a planned oil ban effective July 1 and banking and shipping sanctions that will have the potential to cripple trade between both sides.

However, the EU said it was not seeking a full-scale embargo on all commercial relations with Iran.

The sanctions were agreed Monday by foreign ministers and represented the most significant ratcheting up of pressure on Iran thus far from Brussels over Tehran's nuclear program.

The new measure includes restrictions on the Central Bank and sanctions on Bank Tejarat, the last large Iranian state bank still operating in the EU, which was also hit by a U.S. ban Monday.

Nigel Kushner, chief executive of Whale Rock Legal Ltd., which advises companies on Iran sanctions, said the "trade can go on" between Iran and the EU but it will greatly complicate payment.

He said that's due to a combination of the new EU banking sanctions "and in parallel, the U.S. putting pressure on any bank in the world" after enacting a ban on dealings with the Central Bank of Iran.

Trade will also be hindered by sanctions on two shipping companies and an Iran port operator, Tidewater Middle East Co., which reportedly has operations at seven of the main ports in Iran.

"This begs the question as to whether shipments may now be made to the seven ports where Tidewater is said to have operations," Kushner said.

According to the European Commission, the EU exported EUR11.3 billion worth of goods to Iran in 2010, notably machinery, cars and chemicals. Tehran sells mostly oil and some petrochemicals to Europe.

However, an EU official said Tuesday: "We don't want a full trade embargo on Iran."

The new measures aim to stop the Central Bank of Iran from circumventing previous sanctions, the official said.

The EU said that CBI transactions were still allowed when the member state involved has ensured, on a case-by-case basis, that they will not involve a designated entity or person.

The EU also tightened the noose with new sanctions on Syria, notably on its oil and banking sectors.

The EU targeted Ebla Petroleum Co. and the Deir-ez-Zur Petroleum Co., with which Suncor Energy Inc and Total SA where involved before stopping production due to previous sanctions and unrest Total reiterated that it had already "stopped activities that contribute to oil and gas production" in December. Suncor didn't return a request for comment.

Dijla Petroleum Co., a joint-venture with which Gulfsands Petroleum PLC is conducting exploration in Syria, also had sanctions imposed. A spokesman for the U.K. oil company said there was no "further impact on Gulfsands' activities in Syria" from the sanctions.

Copyright (c) 2012 Dow Jones & Company, Inc.


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Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Lettice | Jan. 31, 2012
Nothing I could say would give you undue credit for this story.

Oilblur | Jan. 24, 2012
The EU embargo will have very, very little effects on Iran. Do you know what? One word................ China. China will take all of Iran's diverted oil and then some. Although nice the EU finally gets on board "trying" to stop Iran's nuke dreams, to little too late.


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