In turn this is making it harder for Europe to offer Iran economic incentives to persuade it to abandon nuclear processes that could be used to build weapons. Reuters
By Louis Charbonneau
VIENNA - The United States, determined to prevent Iran from building nuclear weapons, is piling pressure on European firms to stop them doing business with Tehran, diplomats say.
In turn this is making it harder for Europe to offer Iran economic incentives to persuade it to abandon nuclear processes that could be used to build weapons.
"They're being pressured by Washington. Major European companies are unwilling to deliver," an EU diplomat said. "This means we really have no incentives to offer Iran at this point."
Iran denies U.S. charges it is seeking a nuclear bomb and says its nuclear programme is purely for civilian purposes.
Although publicly the United States is saying it wants to stop Iran acquiring equipment for a military nuclear programme, it is interpreting this very widely to cover any "dual use" goods which could be used for either civilian or military purposes.
In November, U.S. ambassador Jackie Sanders told the board of governors of the International Atomic Energy Agency, the U.N. nuclear watchdog, that selling even small items with potential military use would be punished.
"We want any proliferators, from multinational conglomerates to small exporters of dual-use machine tools, to understand that the U.S. will impose economic burdens on them, and brand them as proliferators," Sanders said.
The pressure seems to be working, diplomats say, by deterring European companies wary of damaging their business in the United States from trading with Iran.
Among firms that have told their governments they will stay out of Iran for now are German engineering giant Siemens
COMPANIES SAY NOT CONSULTED
Senior officials from some companies -- such as BP and ThyssenKrupp -- have already discussed these issues publicly.
Areva has told its government that it did not want to do anything to harm its U.S. sales, a French source familiar with the case told Reuters.
French electricity group EDF and the French Atomic Energy Commission are also concerned, the source said.
The same applied to Siemens and other German firms, diplomats said. "German industry told the government that it will not get involved in Iran," one source said.
The new reticence of European companies in turn is blunting efforts by France, Britain and Germany to persuade Iran to abandon nuclear processes that could be used to build weapons in return for economic incentives.
Among these incentives, the EU's "big three" have promised to help Iran cut deals with EU firms in civilian nuclear, aeronautic, telecoms and other industries.
European diplomats complained about the U.S. increasing pressure on trade just as the European governments were trying to persuade Iran to accept economic incentives.
"We were surprised by this," one European diplomat said.
But diplomats said European companies had also complained they had not been consulted before their governments promised Iran goods and equipment that they would be unable to provide.
"The politicians should have talked to industry before starting negotiations with Iran, not after," one said.
One of the items promised to the Iranians was a light-water reactor of the type that does not produce large quantities of plutonium. But no European company is willing to build it.
Iran, under pressure to give up its uranium enrichment programme, is also getting frustrated that the European governments are unable to offer it anything.
"Iranian expectations are too high. We can't order our companies to do business with Iran. All we can do is create a political atmosphere to build confidence," an EU diplomat said.
Germany and France were the top exporters to Iran in 2003, accounting for 11 and 8.6 percent respectively of Iran's $25.26 billion of imports.
On Friday, the head of the International Atomic Energy Agency urged the United States to join forces with Europe to persuade Iran to give up nuclear processes that could be used to make weapons.
"I would hope that the U.S. eventually would be actively engaged with the Europeans in the dialogue with Iran," Mohamed ElBaradei told Reuters on the sidelines of the World Economic Forum in Davos, Switzerland.
Washington wants the U.N. Security Council to impose sanctions on Iran to stop it developing nuclear weapons. (Additional reporting by Paul Taylor in Davos, Switzerland)