EU states back new sanctions on Iran

European Union states yesterday agreed to impose new sanctions against Iran, including an asset freeze on its biggest bank, over its refusal to meet demands to curb its nuclear programme.

But the EU said the door remained open to possible talks over an international package of incentives delivered to Tehran earlier this month by EU foreign policy chief Javier Solana for Iran to suspend uranium enrichment.

The new EU sanctions are the latest attempt by the West to put pressure on Iran over the nuclear issue and will target businesses and individuals the West alleges are linked to its nuclear and ballistic programmes.

"The individuals will be banned from entering the EU and the entities will be banned from operating in the EU," said an EU official, who wanted to remain anonymous, after EU ministers rubber-stamped the measures at a meeting in Luxembourg.

The EU is due to publish the names of those affected today but the official said Bank Melli would face an asset freeze under the moves, while the visa bans would target "very senior experts" inside Iran's nuclear and ballistic programmes.

"Its impact (will be) more expensive imports," Iranian analyst Saeed Laylaz said of the impact on Iran of the move against Bank Melli, a key supplier of export guarantees.

"The economy of Iran will be more dependent on Chinese markets," he added of a growing shift in Iran's focus to Asia that has seen Europe's share of the Islamic Republic's trade dwindle to 25-30 per cent from twice that five years ago.