BICOM

The United Kingdom yesterday announced new measures designed to isolate Iran’s financial and energy sectors. The measures were implemented following Iran’s continued refusal to cooperate with the international community over its nuclear programme. The British government ordered all British financial institutions to sever business ties with their Iranian counterparts – including the Iranian central bank. This is the first time that the UK has used these powers to cut ties with an entire country’s banking sector, underlining the severity of the UK Government’s concerns about Iran’s activities.

Explaining the measures, Chancellor George Osborne said the Government believes “that the Iranian regime’s actions pose a significant threat to the UK’s national security and the international community. Today’s announcement is a further step to preventing the Iranian regime from acquiring nuclear weapons.” Foreign Secretary William Hague also explained the new measures, saying the UK “consistently made clear that until Iran engages meaningfully, it will find itself under increasing pressure from the international community. The swift and decisive action today coordinated with key international partners is a strong signal of determination to intensify this pressure.”

The United States and Canada also announced new sanctions yesterday. The US named Iran as a ‘primary money-laundering concern’, and added 11 new Iranian entities to its blacklist and expanded sanctions to include companies aiding the Iranian oil and petro-chemical sectors. The US has not, however, targeted Iran’s central bank in an effort to prevent a global hike in oil prices. Canada banned exports of goods used in Iran’s petrochemical and oil industries and has blocked nearly all transactions with the Iranian financial sector.

The new sanctions come in response to the latest report by the International Atomic Energy Agency that details Iran’s continued efforts to develop a nuclear weapons capacity, in defiance of international demands. The new moves represent a hardening of the stance of the international community, amid concerns that the Iranians are drawing close to the achievement of this ambition.

The sanctions will undoubtedly have a real effect on Iran’s economy. Experts remain sceptical, however, as to whether they will be sufficient to force a change of mind in the Iranian leadership regarding the nuclear programme. George Perkovich, director of the Nuclear Policy Program at the Carnegie Endowment for International Peace in Washington DC, was quoted by the Reuters news agency today as dismissing the possibility that the new moves would be the ‘straw that broke the camel’s back.’