Japan to Support Sanctions Against Iran

Guy Dinmore and David Pilling, The Financial Times:

Japan has told the US it is ready to freeze bank accounts held by Iran and its leadership in support of an America-led coalition preparing sanctions in the event that Iran refuses to halt its nuclear fuel programme, officials have told the Financial Times.

Japan’s decision to join the “coalition of concerned countries” will be seen as a serious setback for Iran, which has tried to exploit divisions within the international community over how to respond to its alleged development of nuclear weapons. READ MORE

Japan’s move reaffirms the close relationship between Junichiro Koizumi and George W. Bush, US president, who will host the Japanese prime minister at the White House next week.

Iran is under growing international pressure to accept a package of incentives tabled by the five permanent members of the United Nations Security Council and Germany. The proposal includes a US offer to join European-led talks with Iran, provided that it first suspends its uranium enrichment programme.

Should Iran reject the package, or negotiations break down, the coalition – which appears to be built around the group of seven leading industrialised nations but is unlikely to include Russia or China – would start imposing targeted sanctions, diplomats said. The coalition would act without Security Council approval if necessary.

However, Japanese officials were reluctant to be pinned down on the timing, or trigger, for any possible move. Japan could use its foreign exchange powers to freeze foreign assets in an emergency, as it had with North Korean accounts linked to money laundering, one official said.

Thomas Schieffer, US ambassador to Tokyo, said reports that Japan would not go along with sanctions were wrong. “I think Japan will be fine and I don’t think it will go its separate way,” he said. “I don’t think our differences are that great over Iran. Japan has repeatedly assured us that they will be with us.”

Japan expects Iran would respond by suspending loan repayments to Japan. But Tokyo is betting Iran would not cut off oil supplies. Iran provides more than 10 per cent of Japan’s oil imports.

Japan’s proposed development of Iran’s Azadegan oil field could be a casualty of the crisis. Japan has long been under pressure from the US to cancel the agreement.