News of a new round of EU sanctions against Iran this week has provoked a defiant response from Tehran, writes Amani Maged The approval by EU foreign ministers of a further round of economic sanctions against Tehran raises several questions, especially since it coincided with a call for dialogue from EU high representative on foreign policy Catherine Ashton, made during a meeting with Iranian Foreign Minister Manouchehr Mottaki in Kabul. The sanctions also provoked protests from Tehran, made on Monday in answers to questions posed by the Vienna-based International Atomic Energy Agency (IAEA). The timing of the new sanctions reflects the ongoing quarrel between the West and Iran, which many commentators believe is in fact in large part about manoeuvring into a better negotiating position once the pressure eases. It is therefore not necessarily surprising that even as sanctions against Iran are reinforced, someone in the EU will at the same time be calling for enhanced negotiations with the country. Yet, for the moment both sides are contributing to the downward spiral in the dispute, with Europe issuing new sanctions and Iran retorting with fiery rhetoric. Key issues in the relationship between the two sides include the character of the recent developments, the effectiveness of the sanctions and the reason for their passage without the involvement of the UN. The new EU sanctions ban almost all types of European investment in Iran, blacklisting 41 individuals and around 75 institutions, including banks and companies, some of them affiliated to the Iranian Revolutionary Guards. The sanctions also prohibit investment in Iran's oil and gas sector and involve the close monitoring of Iranian ships and aircraft and of financial transfers and bank transactions. They ban the sale of any materials that could be used to manufacture missiles or nuclear technology, as well as of equipment or technology used for extracting and refining oil and gas. Iranian banks in Europe are to be closely monitored under the EU sanctions, with transfers of more than 35,000 euros ($45,000) needing to be approved in advance by the host country. At the same time, Iranian banks will not be allowed to open further branches in any of the 27 EU countries, and European companies are banned from providing security services inside the EU to Iranian companies, or to third- party firms working with Iran. The sanctions ban Iranian flights, or those operated on behalf of Iran, except for civilian passenger carriers. While the sanctions appear to be harsh, Iranian Oil Minister Masoud Mir Kazemi said that they would have little effect on the country's oil production. Mir Kazemi's statement coincided with the announcement of a cooperation agreement with Russia, in which the two countries agreed to cooperate in the field of oil and gas. According to the agreement, the two sides will set up a joint bank to fund projects in oil, gas and petrochemicals. Tehran and Moscow also agreed to draw up a roadmap for cooperation in electricity generation and nuclear energy. In the light of these developments, it seems unlikely that Russia will jump on the EU and US bandwagon of further sanctions against Tehran. Even as the new EU sanctions were being drafted, Turkish Foreign Minister Ahmed Davutoglu was holding talks with his Iranian and Brazilian counterparts in Istanbul, which concluded with a joint communiqué to the effect that disagreements over Tehran's nuclear programme could be resolved through diplomatic means. Agreements signed between Turkey, Brazil and Iran would govern Iranian access to uranium, and both Turkey and Brazil called for talks between Iran and the G5+1 group to be restarted to resolve the dispute. According to various sources, since the EU sanctions are intended in part to target Iranian fuel imports, Iran will have to rely more and more on friendly countries to meet its fuel needs. Almost half of the country's petroleum imports in July came from Turkey, with the rest coming from China, as most other suppliers have ceased dealing with Iran. Mir Kazemi said that the EU sanctions would not reduce Iran's domestic oil production, since scarcely any European companies were active in the country and their presence would not be missed. At the same time, Iran's Deputy Oil Minister Alireza Zeighami said that the country would be investing $46 billion in building new oil refineries. Not only has Tehran secured its oil needs from friendly countries despite the new round of sanctions, but it has also indicated that it may do battle on other fronts, such as in Iraq and Afghanistan. According to the deputy chief of staff of the Iranian armed forces, Masood Jazayeri, important developments can be expected in both countries, and he accused the US of directly and indirectly sponsoring terrorist groups. In response to the announcement of the EU sanctions, Iranian President Mahmoud Ahmadinejad called for friendly ties with Europe, while at the same time warning that any country that participated in Washington's campaign against the country would be treated as an enemy of Iran. Alaeddin Brogardy, chairman of the national security and foreign policy committee of Iran's Shura Council, warned the Europeans that Iran would reconsider cooperation with the EU and freeze economic ties, which could result in tens of billions of euros in losses for European companies. While the new sanctions do not necessarily aim to stifle Iran, they do represent further pressure on the country to enter into further talks on its nuclear programme. British Foreign Minister William Hague said that continued pressure on Iran would force it to negotiate on its entire nuclear programme, and German minister of state for foreign affairs Werner Hoyer stated that the goal of the sanctions was to bring Iran back to the negotiating table. "We are extending our hand, and all the [Iranians] have to do is hold it," Hoyer said. While it is not yet clear whether Iran will now restart negotiations with the West, it is not clear, either, whether the West will be able to compel Iran to return to the negotiating table. It may be that behind the scenes, and despite the appearances of renewed confrontation over the new round of EU sanctions, both sides' interest in fact lies in restarting responsible dialogue.
