U.S. Drafts List of Sanctions as Iran Ignores Deadline

Helene Cooper and David Sanger, The New York Times:

With Iran defying a Thursday deadline to halt production of nuclear fuel, the United States and three European allies are assembling a list of sanctions they would seek in the United Nations Security Council, beginning with restrictions on imports of nuclear-related equipment and material.

Eventually, punitive measures might expand to restrict travel by Iran’s leaders and limit the country’s access to global financial markets, according to diplomatic officials involved in the talks who spoke only on condition of anonymity.

Aside from the effort in the Council, the Bush administration is also seeking to persuade European financial institutions to end new lending to Iran. Some Swiss banks have already quietly agreed to limit their lending, American officials say. READ MORE

Even as an agreement shapes up among the United States, Britain, France and Germany, the push for sanctions faces a high hurdle in the Council, given Russia and China’s possession of veto power and their opposition to discussion of serious punishment for Iran.

In addition, the sanctions effort may also be hampered by a report to be issued Thursday by the International Atomic Energy Agency, in which inspectors will describe only slow progress by Iran in enriching uranium.

The report, according to diplomats familiar with its contents, will describe how Iran has resumed producing small amounts of enriched uranium since temporarily stopping in the spring, but has not increased the rate of production.

Furthermore, the report is expected to say that the purity of the uranium enrichment would not be high enough for use in nuclear weapons, but only for power plants. Iran has long insisted that its program is for peaceful purposes only.

“The big question is why they appear to be moving so slowly,” said one European official who has been involved in monitoring Iran’s progress. One explanation, the official said, is that the Iranians have not wanted to escalate tensions by appearing to be racing ahead in the production of uranium.

Alternative explanations, offered by some American officials, are that the country’s scientists have run into technical problems or that they are hiding some facilities. The mystery has been deepened by Iran’s recent restrictions on where international inspectors can roam, and its refusal to allow them to see facilities that Iran has not declared to be related to its nuclear program.

The atomic agency’s report is also expected to detail questions that Iran has failed to answer about suspected nuclear activities that it has declined to show to international inspectors.

European and American officials say, for example, that Iran has refused to elaborate on President Mahmoud Ahmadinejad’s claim earlier this year that the country has an active research project under way using an advanced type of enrichment centrifuge that it obtained from the Pakistani nuclear scientist Abdul Qadeer Khan.

In an interview, R. Nicholas Burns, the under secretary of state for political affairs, said that when the agency’s report comes out on Thursday the American argument will focus on Iran’s official refusal this month to stop enriching uranium despite an international ultimatum.

“The only criterion that matters is whether they met the conditions that the Security Council said they had to meet,” he said. “And they haven’t done it.”

The list of proposed sanctions, according to American and European officials, would begin with low-impact measures like an embargo on the sale of nuclear-related goods to Iran, and the freezing of overseas assets and a ban on travel for Iranian officials directly involved in the nuclear program.

American sales to Iran have been restricted ever since the Iran hostage crisis. But European and Russian companies have sold technology for Iran’s budding civilian nuclear program, and American officials said Wednesday that it was unclear whether the sanctions would force Russia to stop helping Iran complete its nuclear reactor at Bushehr.

The Bushehr project is worth hundreds of millions of dollars to Russia, and the government of President Vladimir V. Putin is expected to argue that sanctions should not affect civilian projects that are already under way. “Stopping Bushehr would be the biggest impact of a nuclear-related sanction,” said Robert J. Einhorn, a senior adviser at the Center for Strategic and International Studies and former assistant secretary of state for nonproliferation under President Bill Clinton.

American officials expect the debate within the Council to take weeks and say it could extend through the opening of the United Nations General Assembly in mid-September, an event that will include a speech by President Bush and meetings with other heads of state. The administration is preparing to use those meetings to press for the sanctions resolution, just as it used the same meeting four years ago to begin to build its case for demands against Iraq.

But Russia and China, among other countries, are concerned about any American-led escalation of a confrontation. Unlike the Bush administration’s effort four years ago, however, American officials appear to be shying from using intelligence information to build their case. Instead, they are citing Mr. Ahmadinejad’s public statements and Iran’s refusal to comply with the Council resolution passed in July, with support from Russia and China, that demanded full suspension of enrichment by Aug. 31.

“Russia and China can’t claim they didn’t agree to impose some nonmilitary sanctions” if Iran refused to comply, Mr. Einhorn noted. American officials said Secretary of State Condoleezza Rice had received assurances in June that Russia would, at a minimum, sign on to a first phase of weak sanctions.

But it is unclear whether Russia or China will sign on to sanctions if they believe that commits them to voting in favor of further pressure.

Yet that is exactly the American strategy, as described by administration and European officials. If Iran still has not suspended uranium enrichment in a few weeks, the sanctions proposed by the United States and Europe would progress to a broader travel ban and freezing of assets for government members, a senior administration official said.

Continued noncompliance would bring a ratcheting up of sanctions to include restrictions on commercial flights and on World Bank loans.

Iran has hinted at various times in recent months that it would respond to sanctions with actions of its own, from cutting oil production to threatening to withdraw from the Nuclear Nonproliferation Treaty, as North Korea did.

Other American officials said they feared that sanctions could prompt Iran to spur the insurgency in Iraq or sponsor terrorism by Hezbollah. But Mr. Burns said on Wednesday, “We’re not going to be intimidated by the Iranians.”

He is expected to travel to Berlin next week to begin work on drafting a Security Council resolution, administration officials said.

But despite the private assurances American officials say they have received, the public comments of senior Russian and Chinese officials have remained ambiguous. Russia’s defense minister said last Friday that it was premature to consider punitive actions against Iran, adding that the issue was not “so urgent” that the Council should consider sanctions and expressing doubt that they would work in any case.