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FACTDROP: EU Imposes Iran Oil Embargo, Central Bank Freeze


EU Imposes Iran Oil Embargo, Central Bank Freeze

Iranian President Mahmoud Ahmadinejad had said the EU will "regret" the economic sanctions it is planning to impose on Tehran on 26 July 2010 at a foreign ministers' meeting in Brussels. 

Πηγή: WSJ
By Samuel Rubenfeld
Jan 23 2012

European Union foreign ministers agreed Monday to impose an oil-import embargo on Iran and an asset freeze on the country’s central bank, escalating the confrontation over Tehran’s nuclear program.

The embargo bans the importation of petroleum and crude oil products from Iran, as well as insurance on such products. It goes into effect as of July 1 (sub req) on existing contracts, and a review of the economic effects of the measures on oil will take place before May 1, according to a statement (pdf) from the EU Council.

Crude prices rose modestly on the news.

The Council also froze the assets of Iran’s central bank, Bank Markazi, within the EU, though the statement allowed that “legitimate trade can continue under strict conditions.” No longer can the EU trade gold, precious metals and diamonds with Iranian public bodies or the central bank.

The Iranian currency, the rial, which has been battered since U.S. sanctions targeted Bank Markazi, fell to record lows on the EU announcement.

In addition, the EU outlawed the importation of petrochemical products from Iran, along with the export of technology for the sector there. It froze the assets of eight more entities and slapped visa bans and asset freezes on three more individuals, the statement said.

The measures come as the U.S. and Europe ratchet up their efforts at isolating Iran over a nuclear program that an International Atomic Energy Agency report found was producing technology that could result in Tehran possessing the means to make nuclear weapons.

Iran maintains its nuclear program is peaceful, and President Mahmoud Ahmadinejadsaid over the weekend that any new sanctions won’t affect the country. Lawmakers, however, again threatened on Monday to close the Strait of Hormuz in response to the EU sanctions.

The Wall Street Journal reported on Monday’s measures, and there’s more from theGuardian, CNN, AP, BBC, Reuters, Haaretz, Global Post and NY Times.

Late last week, EU diplomats talking ahead of Monday’s ministerial meeting couldn’t agree on a full oil embargo because Greece, which imports a significant amount of its oil from Iran and is in the middle of an economic crisis, was holding out. Athens didn’t win a special concession it requested for extra time to implement the embargo, the Journal report said.

Refiners in Spain and Italy, both nations that also rely heavily on Iranian oil and are dealing with crises, were already phasing out some Iranian oil purchases and they will continue apace, according to the Journal report.

Separately, the EU Council followed through and expanded its Syria sanctions blacklist, bringing the total number of people facing visa bans and asset freezes to 108, and the number of entities with their assets frozen to 38.

“Today’s decision will put further pressure on those who are responsible for the unacceptable violence and repression in Syria,” said EU foreign policy chief Catherine Ashton in a statement (pdf).

The names of the individuals and entities sanctioned Monday will be published Tuesday in the EU’s Official Journal.

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