Still Trying to Squeeze Iran

[TIME] Adam Zagorin - A new UN Security Council resolution punishing Iran for its failure to cease uranium enrichment remains weeks away, despite agreement between the five permanent Council members plus Germany. The news that U.S. intelligence believes Iran currently has no active nuclear weapons program undermined the case for urgency claimed by the Bush Administration. Several months ago, the U.S. banned all dealings with three of Iran's largest financial institutions, claiming they were facilitating terrorism and supporting weapons proliferation. "Iran is having a much harder time financing its trade - whether that's difficulty in obtaining letters of credit or establishing correspondent accounts abroad," said Adam Szubin, Director of the Treasury Department's Office of Foreign Asset Control. "Gradually, it's becoming more difficult for Iranian companies to do business, whether it's in the financial sector or industry and the great majority of reputable banks around the world are exhibiting much more care in dealing with Iran today than even a year ago." Last year, the OECD raised its risk rating on Iran, as export credits from countries such as Germany, France and Japan fell off sharply, which also pinched Iran's ability to import. A number of leading European banks have cut ties with Iran or are limiting their Iranian operations. But there's only so much that U.S. and allied pressure can achieve, and more than 18 months after the first UN sanctions were imposed, Iran's foreign currency reserves are high, largely the result of high oil revenues.

2008-02-05 01:00:00

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