Iran Shifts Funds Out of E.U. Banks

Iran Shifts Funds Out of E.U. Banks

yesterdays news...

PARIS, Jan. 20 -- Facing threats of international economic sanctions over its nuclear program, Iran has started moving its foreign currency reserves out of European banks, according to the chief of the Islamic republic's Central Bank.

"We transfer the foreign exchange reserves to wherever we deem fit," the bank governor, Ebrahim Sheibani, told Iranian journalists, the semiofficial Iranian Students' News Agency reported Friday. "We have begun transferring."
(yes, you already told us that)

Sheibani dodged questions about where the money was being sent, the news agency said. He spoke on Wednesday, but his comments had not been reported.

International analysts estimate that Iran has $35 billion to $50 billion in banks outside the country.

The shift of funds comes as European countries and the United States are pressing for international action against Iran for resuming uranium enrichment research. The International Atomic Energy Agency, the U.N.'s nuclear watchdog, has called an emergency session for Feb. 2 to consider the issue.

European diplomats said this week that the European Union and the United States did not have the necessary support for measures that would result in immediate economic sanctions against Iran.

But Iranian officials appear to be trying to avoid a repeat of the losses the country suffered when President Jimmy Carter froze all Iranian assets in the United States after Iranian students took 52 Americans hostage at the U.S. Embassy in Tehran in 1979.

Iranian authorities estimated that the country lost $14 billion in assets after the freeze, including cash, oil seized from ships in transit and 1.6 million ounces of gold in the U.S. Federal Reserve Bank.

The escalating tension over Iran's nuclear program contributed to a surge in oil prices this week, reaching about $67 a barrel Thursday, the highest price in four months. Iran is the world's fourth-largest oil exporter.

Some Iranian officials have suggested Iran could retaliate against any international financial sanctions by reducing its oil flows. The Associated Press reported Friday that Iran's Oil Ministry said it was pushing the Organization of the Petroleum Exporting Countries to cut its overall production but said the call was related to anticipated declines in oil demand in the second quarter of 2006, not the nuclear dispute.

Although the United States maintains economic sanctions against Iran, the Islamic republic has cultivated strong business ties with Russia, China, India and Western European countries, including France.

Iran triggered the current crisis nearly two weeks ago when officials ordered inspectors from the IAEA to remove seals they had put on equipment at an enrichment plant at Natanz two years ago.

Iran maintains it would use enriched uranium only to generate electricity, but U.S. and E.U. officials have said they believe Iran is attempting to develop nuclear weapons.

For the last two years, France, Britain and Germany have been trying to persuade Iran to stop the controversial aspects of its nuclear program. But relations have chilled, and no discussions have taken place for months.