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Iran moves to protect assets from U.N.

*Also see recently posted items: 'The approaching war with Iran: Part II' (#msg-9344478) & 'The Proposed Iranian Oil Bourse' (#msg-9344859), thanks mmayr...

Iran moves to protect assets from U.N.
ALI AKBAR DAREINI
Associated Press

TEHRAN, Iran - Iran is withdrawing its foreign currency deposits from European banks, the central bank governor said Friday, a move designed to protect its assets from U.N. sanctions that might be imposed over the country's nuclear program.

The Islamic republic also confirmed it is pushing for the Organization of Petroleum Exporting Countries to cut overall production, signaling it could seek to use its oil riches in the standoff with the West.

Iran's Central Bank Gov. Ebrahim Sheibani told reporters that Iran was transferring the deposits to an undisclosed location, the semi-official Iranian Students News Agency reported. "We transfer the foreign exchange reserves to wherever we deem fit," Sheibani was quoted by ISNA as saying.

Sheibani would not say how much money was involved and it was not clear whether Iran's investments in Europe would be affected.

Oil Ministry spokeswoman Souzan Shakourzadeh also said Iran wants OPEC to cut its overall production ahead of an the expected fall in demand for oil in the second quarter of this year.

Shakourzadeh told The Associated Press she was not in a position to say by how much Iran thought OPEC should reduce its production. Iran pumps about 4 million barrels of oil a day, making it the second-largest producer in OPEC after Saudi Arabia.

Crude oil prices rose above $67 on Friday amid concern over the Iranian nuclear dispute, unrest in Nigeria and the al-Qaida threat of terrorist attacks in the United States. It is feared that oil prices could surge much higher - even beyond $100 a barrel - if the U.N. Security Council imposes trade sanctions on Iran over its nuclear activities.

The decision caused few ripples in currency trading, however, with most traders saying the news had already been factored into the market after the possibility of such a move was raised earlier.

European powers have drafted a resolution that calls for referring Iran to the Security Council for its refusal to give up its uranium enrichment program but stops short of asking for sanctions. The International Atomic Energy Agency, the U.N. nuclear watchdog, will meet Feb. 2 to discuss the draft.

Iran claims its nuclear program is peaceful and aimed only at generating electricity, but the U.S. and its allies say Tehran is seeking to develop atomic weapons.

Momentum gathered for Europe to take steps against Iran with two senior officials speaking out against the country's nuclear activities.

Italian Foreign Minister Gianfranco Fini told AP Friday that Iran's nuclear program was testing the world's resolve. "The international community must have a defined, very precise, very united strategy," Fini said in an interview in Rome.

The head of France's armed forces, Gen. Henri Bentegeat, accused Iran of trying to obtain nuclear weapons. Iran "presents a major worry because it is a country that has shown extremely bellicose intentions," he told RTL radio.

An expert on Iran, Gary Samore of the McArthur Foundation in Chicago, said Iran's decision to withdraw its European deposits "makes sense in terms of preparing for the possibility that Europe might take some measure to impose some financial sanctions."

The move suggests Iran has taken the issue of possible U.N. sanctions seriously.

Iran removed some U.N. seals from its main uranium enrichment facility in Natanz, central Iran, on Jan. 10 and resumed research on nuclear fuel - including small-scale enrichment - after a 2 1/2-year freeze.

The shift alarmed Western nations that suspect Iran may be trying to produce nuclear weapons. Uranium enriched to low levels is used as fuel in nuclear reactors that generate electricity, but further enrichment makes it suitable for atomic bombs.

Iran has insisted it has the right under the Nuclear Nonproliferation Treaty to enrich uranium to produce its own fuel for reactors.

Last year, Iran is believed to have earned its highest-ever revenues from oil - an estimated $30 billion from March 21 through December - giving it a hefty surplus to deposit in foreign bank accounts.

Crude oil exports normally account for about 80 percent of Iran's foreign currency income.

Iranian experts say Iran's accounts in Europe are protected by the Vienna Convention governing diplomatic relations, arguing that any seizure of the Iranian assets would be against international regulations.

Iran previously has complained that Britain blocked raw uranium it bought before the 1979 Islamic revolution. Germany refused to complete its only nuclear power plant, and France has refused to release Iran's uranium materials despite Iran's having a share at a uranium enrichment plant in France.

Iran's assets in the United States were frozen shortly after the 1979 Islamic revolution that toppled the pro-Western Shah Mohammad Reza Pahlavi and installed a clerical regime.


LINK: http://www.mercurynews.com/mld/mercurynews/business/13671297.htm