Iran won't trade with countries imposing sanctions

Iran won’t trade with countries imposing sanctions

Impact of latest sanctions played down.

July 24, 2010 3:08 by Reuters

Iran warned on Saturday it would stop trading with countries that impose restrictions on its assets abroad in the face of tightening international sanctions over the Islamic state’s disputed nuclear activities.

The United States, the United Nations and the European Union have imposed new restrictions on Iran over its nuclear enrichment activities, which the West fears could lead it to make a bomb.

The fourth round of U.N. sanctions calls for measures against new Iranian banks abroad if a link to the nuclear or missile programmes is suspected and for vigilance on transactions with any Iranian bank, including the central bank.

“Any country that creates limitations for Iran’s assets, we will stop trading with them,” Hamid Borhani, deputy head of the Central Bank of Iran, told the semi-official Mehr news agency. “We have to protect our assets.”

Iran, the world’s fifth-largest crude oil exporter, says it needs nuclear technology to generate power.

The latest measures are mainly aimed at vital sectors of Iran’s economy such as banking and energy, which analysts say will raise the cost of trade by making it more difficult to transfer funds or insure cargoes.

Iran says any sanctions imposed on its banking sector will create instability in the world’s financial system although the Islamic state will find ways to protect its assets.

The United Arab Emirates, a Washington ally, told financial institutions in the Gulf Arab country in June to freeze any accounts belonging to dozens of firms targeted by the fourth round of U.N. sanctions.

The hardline Iranian leader has consistently played down the impact of sanctions. President Mahmoud Ahmadinejad has called the U.N. sanctions a “used handkerchief”.

The new sanctions imposed on Iran’s banking and financing system may block transactions in euros and dollars.

Iran said on Friday it will shift to other currencies for payment of its oil exports. The dollar is the standard currency for oil trade, but transactions can in theory be carried out in whatever currency the parties involved decide.

(Writing by Ramin Mostafavi, Editing by Sonya Hepinstall)