The New York Times
By NEIL MacFARQUHAR and DAVID E. SANGER
American and European officials said Wednesday that the reference, passing though it is, could give them a legal basis in the future for choking off finanical transactions between Iran and banking centers in Europe and elsewhere. Previous sanctions have taken aim at specific banks suspected of financing proscribed nuclear activity, but never anything as pivotal as dealings with the central bank itself.
What is notably absent from the draft resolution, however, is any binding restriction on transactions with Iran’s central bank. Among the many compromises that the United States accepted to get China and Russia to back new sanctions against Iran was an agreement to limitany reference to the bank — or Iran’s entire energy sector, for that matter — to the introductory paragraphs rather than the sanctions themselves, according to American officials and other diplomats, yielding a weaker resolution than the United States would have liked.
The haggling over the central bank illustrates both the opportunities and the frustrations that American and European officials see in the resolution. One the one hand, it provides an opportunity to expand the range of financial activity that the West can try to impede. On the other, it provides a loophole for any nation that wants to continue relations with Iran, allowing it to argue that a cut off is not mandatory.
The standoff between Washington and Beijing over what economic measures to include in the final resolution consumed the last 10 days of the negotiations, diplomats said. China expressed concern that if you singled out the central bank for sanctions it would paralyze the entire Iranian economy, they said.
Even so, both Obama administration officials and diplomats underscored the mention of the central bank as an important tool to try to limit any trade with Iran that contributes to nuclear proliferation.
Security Council diplomats expressed confidence that they had at least 10 votes on the 15-member council, and maybe more depending on how negotiations unroll. Turkey and Brazil, both current members, have said they will not engage in talks on the draft, and Lebanon is also expected to sit out the vote. The position of other members, especially Nigeria and Uganda, remain unclear since they are awaiting instructions from their capitals, diplomats said.
Iran reacted with outrage on Wednesday to the proposed new sanctions, particularly since the agreement was announced just a day after the Islamic republic had been trumpeting a compromise agreement on nuclear enrichment for an experimental reactor in Tehran that had been worked out with Brazil and Turkey.
Iran’s foreign minister, Manouchehr Mottaki, said “there was no chance that the resolution would be approved,” given that Tehran had agreed to ship a chunk of its enriched uranium to Turkey, the Fars news agency reported. He described the countries favoring the draft as a minority, Fars said.
Mojtaba Samareh-Hashemi, an adviser to President Mahmoud Ahmadinejad, dismissed the draft as having “no legitimacy,” the news agency reported. All of the new sanctions come under the umbrella of limiting activity linked to nuclear proliferation, and Iran maintains its program is strictly peaceful but it is suspected of trying to develop a nuclear bomb.
The carefully worded compromise emerged after the United States said it would not support the passage of any resolution that did not at least mention the central bank and Iran’s lucrative energy sector, while the Chinese were equally adamant that no economic targets be singled out.
In the end, both the energy sector and the central bank were mentioned with somewhat tortured wording in the preamble, with the draft noting the “potential connection between Iran’s revenues derived from its energy sector” and possible financing for its nuclear program.
That is enough to pursue companies dealing with either the banks or the energy sector, American officials said. Whenever the negotiations stalled, Ambassador Susan E. Rice, the American envoy, warned the Chinese that any measures passed by Congress in the absence of a United Nations resolution would likely have much greater consequences for Chinese banks and its trade relations with the United States, one United Nations diplomat said.
Russia generally supported the Chinese position, although Moscow focused its attention on the arms embargo. The United States and its European allies in the talks —Britain, France and Germany — had proposed a total arms embargo, which Russia rejected.
The final compromise required a telephone call from President Obama to President Dmitry Medvedev to break the deadlock, one United Nations diplomat said. Russia then accepted the wording in the resolution, which bans the sale of all heavy combat equipment to Iran, namely battle tanks, armored combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, missiles or missile systems.
That would seem to include the S-300 surface-to-air missiles that Russia sold to the Islamic Republic in 2005 but has repeatedly delayed delivering. Diplomats were divided on whether the sanctions actually covered the deal, but one noted that it gave Russia a convenient excuse to further delay — its hands were tied by the Security Council.
The White Hosue said Wednesday that President Obama called Prime Minister Erdogan of Turkey, in what appeared to be an effort to mollify the Turks after they negotiated a deal with Iran to place about half of the country’s uranium stockpile on Turkish territory for a yar, while they awaited fuel for a research reactor used to produce medical isotopes.
Turkish officials say that together with Brazil, they believed they were coaxing Iran back to the terms of a confidence-building agreement with Iran that fell apart last year. But White House officials were disparaging of the effort, noting that Iran would continue to enrich uranium at high levels, and made no commitment to negotiate over the key demands made by the Security Council over the past four years — including answering all questions put to Tehran by international nuclear inspectors.Mr. Obama apparently reinforced that point. The White Hosue said that he “stressed the international community’s continuing and fundamental concerns about Iran’s overall nuclear program as well as Iran’s failure to live up to its international obligations.” Mr. Obama said he would continue to negotiate over the new round of sanctions against Iran — a step that clearly surprised and miffed the Turks and the Brazilians, who thought their agreement would short-circuit that effort, at least for now.
Previous Iran resolutions have taken up to six weeks between the time they were agreed to by the permanent members and then passed by the full council. Among the hardest remaining issues is the list of Iranian companies and individuals to subject to an asset freeze and travel ban.
A Western list that runs to some 10 pages has been circulating for months, one diplomat noted. But many of the listings refer to multiple names of a single organization, switching names being a favorite tactic in avoiding sanctions.
The Americans seek passage as fast as possible and the European Union hopes the new resolution will be in place before a summit of their leaders in mid-June, which would allow them to discuss broader European sanctions against Iran.
