EU expected to back more Iran sanctions next week

The restrictions would target a number of Iranian banks and insurance companies, particularly those involved in trade finance, as well as more units of Iranian shipping group IRISL.

The companies would in effect be added to a UN blacklist of firms whose assets around the world are frozen on suspicion of providing aid to Tehran's nuclear or missile programmes.

"I think it is very important that the European Union does take further measures, that we show the European Union is prepared on this subject and others to use its weight in the world," British foreign minister William Hague said on Thursday during a visit to Berlin.

Some EU member states, notably France, would also like to impose restrictions on Iran's energy imports and exports, but the most that could be expected is limits on exports of equipment used in Iran's oil and gas sector, EU sources say.

European Union foreign ministers will meet in Luxembourg on Monday to discuss details of the additional measures and help prepare a statement to be issued by EU heads of state and government at a summit in Brussels on June 17.

The statement is expected to give "a clear and strong mandate" to EU foreign ministers to agree the technical details of the extra sanctions package and sign off on it at their next meeting in mid-July, the diplomats said.

The move is designed to put extra pressure on Tehran to return to negotiations over its uranium enrichment programme, which the West believes is aimed at developing nuclear weapons but Iran says is purely for peaceful purposes. It coincides with efforts by the US Congress to draw up additional measures against Iran in the next month.

The measures are also designed to add bite to Wednesday's UN sanctions package, parts of which were watered down by Russian and Chinese opposition. The impact of the package was also lessened by Turkish and Brazilian votes against it.

"DUAL-TRACK" APPROACH

The effort to get the 27-country European Union to impose more restrictions in Iran is driven by the EU foreign policy chief, Catherine Ashton, as well as by France, Britain and Germany, the three countries which agreed the UN sanctions package along with the United States, Russia and China.

While Britain, France and Germany are broadly agreed on the need for an extra layer of restrictions on Iranian finance and trade firms suspected of supporting Tehran's nuclear programme, there are differences among EU countries over what to target.

Germany has strong trade links with Iran, particularly in the energy sector, and is seen as reluctant to support measures to limit activities of Iran's oil and gas companies. Others including Cyprus and Spain are reluctant to back sanctions beyond those agreed at the UN Security Council, diplomats say.

French officials acknowledged on Wednesday they were unlikely to get EU agreement on a ban on Iranian energy imports or exports, but pointed out that Iranian oil exports to Europe had in any case fallen 40 percent in recent years.

In tandem with the move to tighten restrictions on Iran, the United States and European Union have also increased efforts to engage with the country and try to get it back to negotiations.

Ashton, with the backing of the United States, Britain, France, Germany, China and Russia -- the so-called EU3+3 -- is hoping to meet Saeed Jalili, Iran's chief nuclear negotiator, in the weeks ahead to see if any progress can be made.

"The aim of our efforts is to achieve a comprehensive and long-term settlement which would restore international confidence in the peaceful nature of Iran's nuclear programme," Ashton's spokesman said in a statement on Wednesday.

Iran has described the UN sanctions as a "used handkerchief" and said it will not halt its uranium enrichment work. Turkey and Brazil, which have negotiated with Iran in recent months, also dismissed the sanctions as a mistake.