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Ahmadinejad Undeterred As Sanctions Take Bite
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Ahmadinejad Undeterred As Sanctions Take Bite

Middle East

Ahmadinejad Undeterred As Sanctions Take Bite
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ROBERT SIEGEL, host:

This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.

DAVID GREENE, host:

And I'm David Greene.

The president of Iran, Mahmoud Ahmadinejad, was in New York today for the United Nations meeting on poverty. His message: Suffering around the world can be blamed on capitalism and transnational corporations. Some of those corporations, in fact, are causing problems for Iran itself.

As NPR's Tom Gjelten reports, the latest round of sanctions has prompted Western banks and other firms to back out of business deals with Tehran.

TOM GJELTEN: There are now sanctions on Iran imposed by the United Nations, by the European Union, and by individual governments with the U.S. leading the way. It's all with the goal of dissuading Iran from pursuing nuclear weapons.

Treasury Undersecretary Stuart Levey ran the sanctions program under President Bush, and President Obama kept him on. In a speech here yesterday, Levey said the sanctions have been so effective that Iranian banks now have a hard time carrying out major transactions in euros or in dollars.

Mr. STUART LEVEY (Undersecretary, Department of Treasury): This trend is no longer limited to the financial sector. Almost daily, we receive reports of major firms around the world deciding to pull out of business dealings with Iran.

GJELTEN: In 2007, Levey personally contacted a major European bank, asking why it was going to let Iran use the bank to solicit contractor bids to build Iranian power plants. The practice was immediately blocked. Other Western companies have also broken off deals with Iranian companies, under U.S. pressure.

David Kirsch is with the consulting firm PFC Energy. He cites the example of an oil marketing firm in Iran called Naftiran, a company now under sanction.

Mr. DAVID KIRSCH (Director, Market Intelligence, PFC Energy): Banks that do transactions with Naftiran will find their access to the U.S. financial system shut off. So Iran has had to find other channels through which to direct its crude-oil exports.

GJELTEN: The U.S. financial market is the biggest in the world, and no Western company wants to jeopardize its connections here.

Insurance companies are increasingly reluctant to cover Iranian cargoes. Shipping companies think twice about sending tankers to Iranian terminals. Kirsch says they worry someone may suggest they are facilitating Iran's nuclear program.

Mr. KIRSCH: Nobody wanted that reputation. Nobody wanted that tag applied to them. So we have seen a number of companies walk away from the Iranian trade even before sanctions were approached. And now, you're seeing a lot of companies take a very broad interpretation and just limit their exposure across the board.

GJELTEN: There is even evidence that the impact of the sanctions is causing dissension within the Iranian leadership. Former President Hashemi Rafsanjani last week cautioned other Iranian leaders quote, to take the sanctions seriously, and not as a joke.

But there's no sign that Mahmoud Ahmadinejad, the current president, is worried. In an interview with ABC on Sunday, he scoffed at the idea that sanctions have been effective in Iran. He spoke through an interpreter.

President MAHMOUD AHMADINEJAD (Iran): (Through Translator) None of this is a problem. If you want to say it's effective, why not wait for the next six months or a year to see with your own eyes whether there are effects or not? And I tell you, there are none.

GJELTEN: In fact, some governments still support investing in Iran - China, for one, but also Turkey, a U.S. ally. Just last week, Turkish Prime Minister Tayyip Erdogan said he'd like to see his country triple its trade with Iran over the next five years. Bottom line: Though sanctions are having an effect, there's no sign they're moving the Iranian government any closer to halting any plans it has for nuclear weapons.

Ray Takeyh, a senior fellow at the Council on Foreign Relations, does not see Ahmadinejad or other Iranian leaders backing down no matter how much sanctions hurt.

Dr. RAY TAKEYH (Senior Fellow, Council on Foreign Relations): The Iranian government may just be too ideologically intransigent to make those - cost-benefit analysis.

GJELTEN: The Iranian regime sees its opposition to the United States and U.S. policy in the Middle East as the foundation of its very legitimacy, Takeyh says, and simply cannot afford to be seen making concessions to U.S. and Western demands.

Tom Gjelten, NPR News, Washington.

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