U.S. Signals Harder Line on Iran as EU Chafes

Dan Bilefsky and David E. Sanger, The New York Times:

New U.S. sanctions against state-owned Chinese companies accused of aiding Iran's missile and chemical programs could signal a harder line toward Tehran taken by the Bush administration and could hinder already strained diplomatic efforts being explored by Europe to end the standoff over Iran's nuclear program, EU officials and analysts said Wednesday.

The sanctions, announced Tuesday by the U.S. State Department, are part of a complex effort to cut off the flow of technology into Iran that could aid its weapons programs while pressing China and Russia to threaten action against Tehran at the UN Security Council. In recent months, the EU has argued that negotiations and diplomacy need to be exhausted first. READ MORE

EU officials said an increase in U.S. pressure on Iran could complicate the diplomatic efforts of the Union, which is trying to end the nuclear standoff with Iran while also acting as a mediator between Tehran and Washington.

"It is very important that the EU and Washington speak with a united voice and that the EU continue to take the diplomatic lead," said a senior EU official, noting that the European Union itself was growing increasingly impatient with Iran over its intransigence.

The official, who requested anonymity because of the sensitivity of the talks, said Washington and Brussels were in close contact and had been taking a coordinated approach.

Iranian nuclear negotiators met this month with counterparts from Britain, Germany and France, representing the EU, for the first face-to-face talks in several months. They agreed to meet again in January.

In talks last year in Brussels, Washington and European leaders brought their stances on Iran closer together, with Bush giving tacit support to EU countries' negotiations with Iran after years of the United States refusing to negotiate with Iran or to publicly endorse European diplomatic efforts.

Bowing to European pressure, Bush also agreed to offer limited incentives to Iran to abandon its nuclear ambitions, including dropping U.S. opposition to Iran starting talks to join the World Trade Organization.

But EU diplomats acknowledged that relations with Iran had cooled since then and that recent comments by the Iranian president, Mahmoud Ahmadinejad, that the Holocaust was a myth had taken relations to a new low. At an EU summit meeting this month, EU leaders said that given provocative political moves by Iran since May, the EU was keeping its diplomatic options under close review and might even consider imposing sanctions.

In an angry response to the U.S. sanctions announced this week, the Chinese government warned Wednesday that the move would not be beneficial to cooperation between the two countries on controlling the spread of weapons of mass destruction and demanded that the restrictions be lifted.

"We are strongly dissatisfied with and firmly opposed to the U.S. government sanctioning Chinese companies," the Chinese Foreign Ministry said in a statement. "The Chinese government has always adopted a serious and responsible attitude on the anti-proliferation issue and has adopted a series of effective measures to strengthen export management and control."

Included in the latest sanctions are two firms closely tied to the Chinese military: China North Industries, known as Norinco, and China National Aero-Technology Import and Export, or Catic, one of the country's largest producers of military aircraft.

The sanctions will have little practical effect on most of the nine companies named, including two Indian companies and one Austrian one that makes assault rifles and other small arms. The Chinese companies are already barred from doing business with the United States.

But Adam Ereli, a U.S. State Department spokesman, called the move "an important and effective tool in constraining Iran's efforts to develop missile and WMD capabilities," in a reference to weapons of mass destruction.

"It does have an impact, I think, particularly in alerting governments to activity taking place in their countries and instituting measures or taking actions to prevent those kinds of activities," Ereli said.

Bush administration officials said they had no evidence that President Hu Jintao or other Chinese leaders were aware of the sales, and they said Beijing had been helpful in cutting off shipments of crucial technologies to the Iranians.

The announcement on Tuesday was the third time since July 2003 that the administration had published a list of Chinese companies that they say are bolstering Iran's missile and chemical programs. There is little evidence so far that China has cracked down on the companies that are owned or effectively controlled by the military.

While the State Department announcement did not describe the technology exported to Iran, information that is classified, officials said none of it specifically dealt with nuclear weapons or the integration of Iran's nuclear program with its missile program.

Nonetheless, they said, they were concerned that Iran was strengthening its missile technology at the same time that its new president had declared that Israel should be "wiped off the map," and that new evidence, acquired from a stolen laptop computer in Iran, suggested that Iranian engineers were grappling with the technical difficulties of fitting a nuclear device atop a missile. Iran does not yet possess such a device, U.S. intelligence officials say.

Dan Bilefsky of the International Herald Tribune reported from Paris and David E. Sanger of The New York Times from Crawford, Texas. David Lague of the International Herald Tribune contributed reporting from Beijing.