U.S., Europe may expand sanctions on Iran

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Michael Jacobson, a specialist on Iran’s finances at the Washington Institute for Near East Policy, said that if the talks fail, “the big thing is to cut off all export credits and insurance” for Iranian trade.

Some European countries have already sharply reduced their export credits to companies doing business with Iran. Germany last year approved $95 million in such export credits, less than one-tenth the amount it granted in 2006.

Mr. Jacobson said Germany, Italy and France had cut back substantially on credits and trade, but Spain and Austria were still doing major business with Iran.

China is even more problematic. Some Europeans began to shy away from doing business with Iran as it revived its nuclear program during the first term of President Mahmoud Ahmadinejad. But China swooped in and signed billions of dollars in deals to develop oil and natural gas as well as build pipelines and oil refineries. Chinese exports to Iran have more than doubled in the past four years, and China is a major purchaser of Iranian oil.

The talks have assumed an even more confrontational edge in the aftermath of Mr. Ahmadinejad’s disputed re-election in June. The election triggered massive internal protests, which are still continuing.

In addition, Iran confirmed last week that it had built a second uranium enrichment plant near the city of Qom that was hidden from the International Atomic Energy Agency for years.

In disclosing the facility, President Obama, flanked by the British and French leaders, said Iran was threatening world security. All have demanded that Iran provide immediate access to the Qom facility, its designers and its plans.

The strong statement “may have had some merit in establishing a rebalanced perception on the part of the Iranians, who may think of Obama as weak,” said Bruno Tertrais, a senior research fellow at the Foundation for Strategic Research in Paris.

Still, expectations going into the Geneva meeting are low.

“The only possibility for success is that Iran agrees to suspend its uranium enrichment program,” Mr. Tertrais said. “The second best is that it agrees to discuss its uranium enrichment program. … However, I don’t see any sign that would tell me the Iranians will change tack.”

“We are looking for a serious commitment from Iran that we are going to negotiate a solution to the nuclear issue,” said Volker Stanzel, political director of the German Foreign Ministry who will take part in Thursday’s meeting. “You have to realize that’s asking a lot from the Iranians: Such a decision would be a 180-degree turn for them.”

Iranian officials have insisted that they were not obliged to disclose the new uranium facility until shortly before they were ready to begin processing uranium. Ali Akbar Salehi, who heads the Atomic Energy Organization of Iran, said Tuesday that his country built the plant inside a mountain and next to a military base as insurance in case of foreign attack on a larger enrichment plant at Natanz.

Mr. Salehi said Iran was willing to discuss “nuclear technology” in Geneva, but “we will never bargain over our sovereign right” to produce nuclear fuel, the Associated Press reported.

While France, Britain and Germany are now seen as favoring new or expanded sanctions on shipping insurance and export credits, they have little appetite for the idea gaining traction in Congress to block exports of refined petroleum products such as gasoline to Iran.

“Gasoline is the supposed weakness of Iran, but this has been hugely overdone,” said Richard Dalton, an analyst and former British ambassador to Tehran who is now at Chatham House in London. “Only a naval embargo would have a real effect.”

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