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Japan to support sanctions against Iran

June 23, 2006

by Guy Dinmore in Washington and David Pilling in Tokyo
Published: June 23 2006

Japan has told the US it is ready to freeze bank accounts held by Iran and its
leadership in support of an America-led coalition preparing sanctions in the
event that Iran refuses to halt its nuclear fuel programme, officials have told
the Financial Times.

Japan’s decision to join the ‘coalition of concerned countries’ will be seen as a
serious setback for Iran, which has tried to exploit divisions within the
international community over how to respond to its alleged development of nuclear
weapons. Iran provides more than 10 per cent of Japan’s oil imports.

Tokyo’s move reaffirms the close relationship between Junichiro Koizumi and
President George W. Bush, who will host the Japanese prime minister at the White
House next week.

Iran is under growing international pressure to accept a package of incentives
tabled by the five permanent members of the United Nations Security Council and
Germany. The proposal includes a US offer to join European-led talks with Iran,
provided that it first suspends its uranium enrichment programme.

Should Iran reject the package, or negotiations break down, the coalition ‘ which
appears to be built around the group of seven leading industrialised nations but
is unlikely to include Russia or China ‘ would start imposing targeted sanctions,
diplomats said. The coalition would act without Security Council app-roval if
necessary.

However, Japanese officials were reluctant to be pinned down on the timing, or
trigger, for any possible move. Japan could use its foreign exchange powers to
freeze foreign assets in an emergency, as it had with North Korean accounts
linked to money laundering, one official said.

Thomas Schieffer, US ambassador to Tokyo, said reports that Japan would not go
along with sanctions were wrong. ‘I think Japan will be fine and I don’t think it
will go its separate way,’ he said. ‘I don’t think our differences are that great
over Iran. Japan has repeatedly assured us that they will be with us.’

Japan expects Iran would respond by suspending loan repayments to Japan. But
Tokyo is betting Iran would not cut off oil supplies.

Japan’s proposed development of Iran’s Azadegan oil field could be a casualty of
the crisis. Japan has long been under pressure from the US to cancel the
agreement.

Copyright The Financial Times Limited 2006

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