IRAN'S URANIUM PROGRAM, EU SANCTIONS AND IRISL

C O N F I D E N T I A L BRUSSELS 000233

SIPDIS

STATE FOR EUR/WE, EUR/ERA, T, NEA, ISN/CPI:KMCGEEHAN,
JCHALMERS AND ISN/RA:RNEPHEW

E.O. 12958: DECL: 02/26/2020
TAGS: KNNP MNUC PARM EWWT IR BE
SUBJECT: IRAN'S URANIUM PROGRAM, EU SANCTIONS AND IRISL
ACTIVITIES IN PORT OF ANTWERP

REF: A. SECSTATE 15979

B. SECSTATE 16219

C. BRUSSELS 381

Classified By: ACTING POL/ECON COUNSELOR ROBERT KIENE FOR REASONS 1.4 (
B) AND (D)


1. (C) SUMMARY: On February 25, Acting PolEconCouns and
PolIntern met with Werner Bauwens, the Belgian MFA's Special
Envoy for Disarmament and Nonproliferation, regarding ref A
and B demarches. Bauwens said Belgium regards Iran's
insistence on moving forward with a higher level of uranium
enrichment as a violation of Iran's international
commitments, highly provocative, and useless as a practical
matter for any purpose other than weapons production. He
said that the EU is currently discussing the technical issues
involved in possible new sanctions. Bauwens said the EU will
wait until the UNSC imposes its sanctions, which he believes
will be fairly light, and then issue its own sanctions which
will be much more onerous. He believes that new sanctions
should address and impact Iranian interests directly related
to nuclear proliferation and not be linked to political or
human rights concerns, especially in the eye of the Iranian
public. Bauwens said that Belgium is aware of the insurance
issues surrounding the Islamic Republic of Iran Shipping
Lines (IRISL) and the UK's ban on its companies doing
business with the company. This information has been
forwarded to the Port of Antwerp for review. He said that
the Belgian company Antares, formerly the IRISL subsidiary
IRISL Benelux, has been fully acquired by the Belgian company
Ahlers. He reluctantly admitted that Antares continues to
provide services to IRISL, as do other Belgian companies in
the port of Antwerp. END SUMMARY.

IRANIAN URANIUM ENRICHMENT & POSSIBLE EU SANCTIONS
-------------- --------------


2. (C) Acting PolEconCouns deliverd ref A demarche and
non-papers to Bauwens. Buwens said that Iran's move to
enrich uraniumto the 20% level is a clear violation of its
commitments to the UN and IAEA. Iran's step is very
provocative, and comes at a time when the world needs of
signal of Iran's willingness to cooperate. The practical
uselessness of the enrichment process, in view of Iran's lack
of capacity to fabricate reactor elements, indicates Iran's
real intent. The history of clandestine operations and
intelligence reports about the real nature of Iran's nuclear
program make it impossible to trust Iran, he said. He said
he never thought that the time President Obama gave Iran to
negotiate in good faith would produce results.


3. (C) Bauwens said that the EU foreign ministers confirmed
the dual track approach to Iran's nuclear program in a
meeting this week, but given the lack of success on the
negotiations track, has begun to discuss sanctions. The EU
wants to give priority on imposing sanctions to the UNSC,
where a concensus of the P5 will be necessary. This will
show the matter is truly of global concern. He mentioned
Catherine Ashton's recent trip to Moscow, and said that she
had received contradictory messages from the Government of
Russia about its support for sanctions. President Medvedev
seemed to be on board, he said, but FM Lavrov seemed to
believe that outreach to Iran was still necessary. In the
end, he thinks, Russia will not want to put the brakes on a
consensus. China is a much bigger problem, he said,
especially in light of recent tensions between the United
States and China. Bauwens said that while a P5 consensus is
not possible now, March would be a good time to try for one,
because in April Lebanon will become the chair of the UNSC
and will be unlikely to support a resolution.


4. (C) Bauwens said that as the U.S. and EU consider new
sanctions against Iran, they should try to keep them targeted
on proliferation activities, and avoid the appearance of
linkage to human rights or domestic Iranian politics. A
message that the nuclear program is unacceptable is
necessary, but when and how to intervene should be carefully
considered in order to prevent a strong, adverse domestic
reaction in Iran, he said. Sanctions should be as firmly
based in international law as possible, because the Iranians,
no less than the Russians, take a formalistic approach to
such matters. As examples of appropriate linkages, Bauwens
mentioned banks, the Revolutionary Guards, insurance
companies and the Iranian national bank. In the end, he
said, Belgium is willing to go "quite a long way" on
sanctions, but wishes that great care be taken in what is
said and how the sanctions are imposed. He said that

technical discussions are now getting under way in the EU
about the shape of new sanctions. The Belgians have been
urging the EU to get going on such discussions since
December, because they want the EU to be ready to announce
measures it will take immediately after the UNSC announces
its own. He expects any UN sanctions to be the result of the
least common denominator of negotiations, but the EU
sanctions to be much tougher. Belgium, he said, wants EU
sanctions to be fair to all member states and not impact the
economy of any states disproportionately. "We are not afraid
to pay," he said, "but all others in the EU should pay as
well." Another concern, Bauwens added, is that sanctions the
EU may impose should be implementable and enforceable by
national customs and other trade officials with reasonable
effort.

IRISL INSURANCE PROBLEMS AND PORT OF ANTWERP
--------------


5. (C) Acting PolEconCouns delivered ref B demarche and non
paper to Bauwens. Bauwens said he is aware of the IRISL
fleet's difficulties in finding insurance and that the UK and
Bermuda governments have banned port operators from dealing
with the Iranian company. Bauwens said that before Belgium
would take similar action, Antwerp port officials and
companies will have to evaluate the situation and the
consequences of a ban on dealing with IRISL. Post intends to
discuss the situation with officials in Antwerp.


6. (C) Bauwens reconfirmed that the Belgian company Ahlers
has completed its takeover of IRISL's subsidiary in Belgium,
IRISL Benelux (ref C). IRISL Benelux is under the same USG
sanctions as its parent company, IRISL. Bauwens said that
IRISL has no remaining financial interest in its former
subsidiary, now known as "Antares". He added that Ahlers
has tried to set up "a Chinese wall" between IRISL and
Antares. Bauwens had no information about whether Ahlers
and/or Antares have made an application to the State
Department to remove IRISL Benelux/Antares from the list of
IRISL subsidiaries subject to USG sanctions. Bauwens was not
comfortable talking about existing arms-length commercial
relations between Antares and IRISL, although he did admit
that Antares provides services to IRISL, as do other
companies operating in Antwerp.

GUTMAN
.