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Focus on sanctions to stop Iran

Focus on sanctions to stop IranGeoff Elliott, Washington correspondent

THE AUSTRALIAN – John Howard and George W. Bush agreed "no options were off the table" for dealing with Iran, but their talks in Washington yesterday centred on finding diplomatic solutions to Tehran’s controversial pursuit of nuclear technology.

While the US President refuses to rule out military strikes, attention is focused on building support for tough UN resolutions against Iran and pressure on the world’s largest financial houses to shut Tehran out the international commerce system.
Sources at yesterday’s meetings between the President and the Prime Minister said there was a "general discussion about the strategic options" on how to handle Tehran’s nuclear ambitions, which the West believes involves enriching uranium in order to build weapons.

As The Australian reported yesterday, the US is working with Canberra on a system of financial sanctions following talks between US Secretary of State Condoleezza Rice and Foreign Minister Alexander Downer in March.

Already the US has been attempting to persuade European governments, banks and companies to isolate the Iranian Government by imposing de facto sanctions – a move that was used for the first time last year against North Korea.

Pyongyang’s ability to move funds abroad has been severely restricted thanks to Washington turning the screws on Macau bank Banco Delta Asia, which the US says has been assisting North Korea in a massive US-dollar counterfeiting scheme.

American pressure on the banking industry has led to some European institutions, including UBS and Credit Suisse, cutting their dealings with Iran this year.

Treasury Secretary John Snow gave tacit acknowledgment to the program earlier this month when he met employees celebrating the second anniversary of the Office of Terrorism and Financial Intelligence, a bureau established within US Treasury to track and close off terrorist financing.

"When the US is confronted with a threat that is unreceptive to diplomatic outreach and when military action is not an option, (financial) tools are often the best authorities available to exert pressure," Mr Snow said, also noting that "all rogue threats depend on a financial network to exist and propagate".

But analysts say isolating Iran with sanctions will be a challenge, as Tehran’s roots in the international monetary system are far deeper than North Korea’s.

The IMF estimates Iran’s exports totalled $US51 billion ($66billion) last year, while imports were $US48 billion. But Iran’s mostly US-dollar-denominated trade gives the Americans some leverage.

Washington’s demands for tough UN Security Council measures against Tehran continue to be frustrated, with Russia opposing calls for Tehran to halt its nuclear research.

Iranian President Mahmoud Ahmadinejad has sparked international concern by calling for Israel to be wiped off the map.