VIENNA, May 8: The United States has outlined a strategy for Iran to be ‘shunned by the international financial community’ over its nuclear programme, Western officials said in recent interviews.

“The objective of this strategy is for the United States government and key overseas partners to pressure and isolate the Iranian regime by creating a dynamic in which the government of Iran, or key elements thereof, is shunned by the international financial community,” said one official.

The financial front is clearly a key one in this drive, especially as it has a ‘relatively small cost’ for Western nations and avoids ‘using oil or trade embargoes’, the official said.

Non-proliferation analyst Mark Fitzpatrick said: “It’s important for the West to have other sanctions options outside the United Nations and employing the United States’ leverage on the international banking system is one that is very appealing to Washington.”

“Financial measures are seen as the perfect sanctions that can directly impact the leadership and not the general public,” Mr Fitzpatrick said at the International Institute for Strategic Studies (IISS) think tank in London.

He said the US administration had already last year authorised the Treasury and State departments to freeze the assets of companies or individuals ‘involved in the proliferation of weapons of mass destruction’ and three Iranian entities were named, including the Atomic Energy Organisation.

The Western official said the isolation of North Korea was a ‘model’ for what the United States wants to do to Iran financially, ‘although Iran is a far more integrated and sophisticated target’, with better banking connections.

The strategy ‘is to approach key governments and win support for financial measures against the government of Iran’, the official said, in comments he said were drawn from a document outlining US thinking.

The official said that given Iran’s ‘international banking profile’, the United States should ‘engage Britain, Germany, France, Italy and, separately, Japan’.

On the private level, ‘key financial institutions, primarily in Europe’ should be persuaded doing business with Iran ‘is not worth the risk’, the official said.

Specific measures would be to:

— financially isolate Iranian supporters of weapons of mass destruction proliferation

— financially isolate Iranian government members involved in illicit or corrupt behaviour

— close Iranian government accounts

— cease to process Iranian government financial transactions

— freeze Iranian government assets

— deny export credit to projects aimed at the Iranian government

“Creating the perception of increasing Iranian government isolation, in the eyes of worldwide financial institutions and in the eyes of the Iranian regime, will itself be of enormous significance and may generate market reactions based on expectation of further isolation,” the official said.

The Swiss banking group UBS said in January that it had ceased business activities with Iran, and Switzerland’s second banking group Credit Suisse also said in January that it would not establish new business relations with Iran, as well as with Syria and North Korea.

A second Western official said it was becoming ‘increasingly difficult and costly for foreign exporters to get their bankers to confirm letters of credit from Iranian banks’.

The official, citing what he said was a Western government’s analysis of the situation, said that ‘major operations in the oil and petrochemicals sector are now blocked, such as the pipeline 11 project signed by the German Linde (for over one billion dollars) and the deal for the Khuzestan petrochemical complex signed by the Italian Technimont’. —AFP