EU readies ban on Iran oil imports, central bank sanctions

Sun Jan 22, 2012 6:34pm EST
 
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By Justyna Pawlak

BRUSSELS (Reuters) - European Union governments are expected to agree Monday new economic sanctions against Iran over its nuclear program, including plans to phase in an oil embargo.

The sanctions follow fresh financial measures signed into law by U.S. President Barack Obama on New Year's Eve, and will mainly target the oil sector, which accounts for some 90 percent of Iranian exports to the EU. Europe is Iran's second-largest oil customer after China.

"We want them to think 'This is really getting very, very serious now'," said one European diplomat.

Western countries believe Iran is seeking nuclear bombs; Tehran says its nuclear program is to generate electricity.

Other than the oil embargo, the EU measures are also expected to include sanctions against the Iranian central bank and a ban on trading in gold with the government, diplomats say.

But EU sanctions are likely to take effect slowly. During weeks of negotiations among the EU's 27 members, Greece and other southern European states pushed hard for a lengthy grace period to limit their own economic costs.

Greece, in particular, is heavily dependent on Iranian oil -- it sources nearly a quarter of its oil imports from Iran -- and has argued that it needs time to find alternative sources.

EU foreign ministers meeting in Brussels are expected to agree to phase in the embargo, allowing existing contracts to be fulfilled for several months after the ban is imposed.   Continued...