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Stepping Up Sanctions

EU Freezes Assets of Iran's Biggest Bank

The European Union has imposed new sanctions on Iran in an effort to halt the country's nuclear program. The European assets of a major Iranian bank are to be frozen and more restrictions may be on their way.

Erik Seemann

The EU froze the assets of Iran's biggest bank on Monday.

At a meeting of European foreign ministers in Luxembourg, a new sanctions package was announced that included measures against Iran's biggest financial institution, Bank Melli.

Bank Melli has been under close financial monitoring since March as part of a United Nations sanctions program. The EU has accused the bank of helping to finance Iran's efforts to produce enriched uranium, a first step towards building a nuclear weapon. The bank was placed on a US blacklist last year.

International authorities say Iran is pursuing nuclear weapons technology under cover of a civilian nuclear power program. Iran insists it only wants nuclear power for electricity generation.

Pressure on Iran has been building steadily for weeks. On June 10, at an international summit in Slovenia that included US President George W. Bush, EU leaders promised "additional measures" on top of sanctions imposed by the United Nations.

Freezing the assets of Iranian banks is intended to prevent them from supporting terrorism or nuclear proliferation. The next step would be European sanctions on Iranian natural gas and oil, a move that would put serious pressure on the country, which is a major oil and gas producer. However, such a move would also drive the world's already high oil prices even higher.

agc/ap/reuters/dpa

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