EU states back new sanctions on Iran

By Mark John

BRUSSELS (Reuters) - European Union states agreed on Monday to impose new sanctions against Iran, including an asset freeze on its biggest bank, over its refusal to meet demands to curb its nuclear programme.

But the EU said the door remained open to possible talks over an international package of incentives delivered to Tehran earlier this month by EU foreign policy chief Javier Solana for Iran to suspend uranium enrichment.

The new EU sanctions are the latest attempt by the West to put pressure on Iran over the nuclear issue and will target businesses and individuals the West alleges are linked to its nuclear and ballistic programmes.

"The individuals will be banned from entering the EU and the entities will be banned from operating in the EU," said an EU official, who wanted to remain anonymous, after EU ministers rubber-stamped the measures at a meeting in Luxembourg.

The EU was due to publish the names of those affected on Tuesday but the official said Bank Melli would face an asset freeze under the moves, while the visa bans would target "very senior experts" inside Iran's nuclear and ballistic programmes.

"Its impact (will be) more expensive imports," Iranian analyst Saeed Laylaz said of the impact on Iran of the move against Bank Melli, a key supplier of export guarantees.

"The economy of Iran will be more dependent on Chinese markets," he added of a growing shift in Iran's focus to Asia that has seen Europe's share of the Islamic Republic's trade dwindle to 25-30 percent from twice that five years ago.

The European sanctions follow a similar U.S. asset freeze imposed on Bank Melli last year and a senior U.S. Treasury official hailed them as another step in isolating Tehran from the international financial system.