China balks at proposed financial bans on Iran

By Evelyn Leopold
March 9, 2007
Reuters
Original Source: http://investing.reuters.co.uk/news/articleinvesting.aspx?type=oilRpt&storyID=2007-03-09T232507Z_01_N09279294_RTRIDST_0_IRAN-NUCLEAR-RESOLUTION-UPDATE-1.XML

UNITED NATIONS, March 9 (Reuters) - China, backed by Russia, balked on Friday at financial sanctions against Iran during talks among six powers on a new U.N. Security Council resolution that would penalize Tehran for its nuclear program.
At issue are proposals, set out in a March 3 working paper obtained by Reuters, to expand a list of people, firms and groups whose assets would be frozen or trade with whom would be restricted, such as Iran's Revolutionary Guards and the state-owned Bank Sepah.
They also call for a ban on new commitments for grants, loans and credits to Iran, which both Russia and China had opposed.
China's main difficulty is with the financial and the trade sanctions against Iran because we feel that we are not punishing the Iranian people. We should punish the Iranians for their activities in the nuclear field, China's U.N. Ambassador Wang Guangya said after Friday's talks.
I don't think we will be ready by next week, Wang said, although Russian Ambassador Vitaly Churkin said there was some hope of a text next week.
We went through the whole list of elements. There are some on which we are quite close, there are some on which there is some serious concerns and differences, Churkin said.
Other envoys close to the negotiations said Western nations had offered several ways to accommodate China and others on the financial sanctions but the draft was not ready.
The new resolution is a follow-up to one adopted by the Security Council on Dec. 23 that imposed trade sanctions on sensitive nuclear materials and technology and froze assets of key Iranians individuals, groups and businesses. That measure demands Iran suspend uranium enrichment, which can provide fuel for power plants or for bombs, but Tehran refused to comply.
Ambassadors from the five permanent council members -- the United States, Britain, France, Russia and China -- as well as Germany met on Friday for the fourth time this week.
China and Russia usually back each other, but Wang said Moscow had difficulties with sanctions against bodies and businesses controlled by Iran's Revolutionary Guard because they feel it's an institution in Iran and you don't have to penalize an institution.
The U.S. negotiator, Ambassador Alejandro Wolff, said, I think the financial issue is probably the main point of concern.
Russia and China also have not signed on to a mandatory travel ban on Iranian officials connected with the nuclear program.
ARMS EMBARGO
The proposals would ban weapons exports by Iran but leave intact its ability to import -- expanding the scope of the measure beyond trade in nuclear materials, which was restricted in the December resolution.
China and others want to name the categories of weapons that would be banned, such as battle tanks, combat aircraft, warships, missiles or missile systems as defined in U.N. registers on conventional arms.
The Chinese view is that we have to focus on the nuclear and missile area but since they see a need to expand it to arms embargo then China would define it in the seven categories of arms in the U.N. registrate, Wang said.
But Wolff said, there is little logic in allowing and encouraging that country to sell arms for money to finance nuclear activities.
Russia and China, according to the seven-page March 3 working paper, also had reservations on a related provision that would allow nations to take cooperative action to prevent weapons trafficking.
The United States and leading European countries suspect Iran is seeking to build nuclear weapons under the cover of a civilian atomic program. Tehran denies the charge and says its program is for generating electricity only. (Additional reporting by Michelle Nichols)