Tuesday, July 27, 2010
As anticipated, the European Union (EU) issued new economic sanctions against Iran yesterday. Canada also followed suit. The new EU sanctions take effect immediately and target the petroleum, banking, insurance, and transportation industries. They are designed to prevent investment, assistance or technology transfers by European companies in the oil and gas industries that form the basis of the Iranian economy. The sanctions also aim to freeze foreign holdings of Iranian banks and to prohibit European insurance firms from doing business with Iranian companies. Additionally, they block holdings of Iranian shipping companies accused of helping Iran avoid previous sanctions.
Canada's sanctions are similar and include a ban on any new Canadian investment in Iran's oil and gas sector and restrictions on exporting goods that could be used in nuclear programs. In addition, Iranian banks will be barred from opening branches in Canada and Canadian banks will not be able to operate in Iran.
Russia described these unilateral efforts at sanctions as "unacceptable" because they undermine international efforts to curb Iran's nuclear program. Russia is unhappy with the unilateral application of sanctions against companies and individuals from third countries who are complying with UN sanctions.
The US, EU and Canada hope these expanded sanctions will force Iran into serious negotiations regarding its nuclear program. In response to the additional sanctions, Iranian President Mahmoud Ahmadinejad is quoted as warning that: "Anybody who participates in the U.S. scenario will be considered a hostile country." Iran insists its nuclear program is for peaceful purposes only, but has been unable to convince the international community of that claim.