Iran says moving assets By Parinoosh Arami

George better hurry up and bring freedom to Iran--Wasnt Iraq in the process of doing this B4 the Neo-Cons Invaded Iraq....................................
Fri Jan 20, 11:13 AM ET



Embroiled in a nuclear standoff with the West, Iran said on Friday it was moving funds out of Europe to shield them from possible U.N. sanctions and flexed its oil muscles with a proposal to cut OPEC output.

"Yes, Iran has started withdrawing money from European banks and transferring it to other banks abroad," said a senior Iranian official, who asked not to be named.

Central Bank Governor Ebrahim Sheibani was quoted earlier as saying Tehran had started shifting funds, but he sidestepped a question on whether the assets would go to accounts in Asia.

Financial markets reacted nervously to the uncertainty about Iran's foreign holdings, estimated at more than $30 billion, helping send oil to a four-month high above $67. The dollar dipped against the euro and the safe-haven Swiss franc.

It is far from clear how placing assets in Asia or anywhere abroad would protect them from being frozen as few governments or major banks would be willing to flout U.N. sanctions openly.

The United States and the European Union want the International Atomic Energy Agency (IAEA) to refer Iran to the Security Council at an emergency board meeting on February 2.

The council has the power to impose trade or diplomatic sanctions, though no swift action to punish Iran is likely.

Russia, China and India, which all have major commercial interests in the Islamic Republic, have urged caution.

Anxious to maintain neutrality, IAEA chief Mohamed ElBaradei has refused an EU request to speed up a report on Iran's atomic activities in time for the February 2 meeting, diplomats said.

Officials close to the IAEA said ElBaradei also felt Western pressure to refer Iran to the Security Council at the meeting was premature. Diplomats said he had promised the Iranians they would have until the next regular IAEA board on March 6 to meet his demand for better access to nuclear sites and documents.

A U.S. official denounced Iran as a threat to regional and global peace and said it had breached international law.

"Iran has overstepped the bounds of international law in seeking to use its facility at Natanz for centrifuge research and enrichment," Undersecretary of State Nicholas Burns told a news conference in New Delhi after meeting Indian officials.

INDIA URGES CAUTION

India, a nuclear weapons power with increasingly warm ties with Washington as well as an old friendship with Iran, advocated restraint, echoing Chinese calls for more talks between Tehran and the EU trio of France, Germany and Britain.

"We remain very supportive of the initiatives taken by the European three to engage Iran in finding an amicable solution," said Indian Foreign Secretary Shyam Saran.

The EU trio scrapped the talks last week after Iran removed IAEA seals on uranium enrichment equipment and resumed a suspended nuclear research program. U.S. and EU officials say there can be no more talks unless Tehran reverses these steps.

Iran is trying to avoid U.N. censure or sanctions over its nuclear program, which it says is entirely peaceful. The West suspects it of secretly seeking nuclear weapons.

Talk of shifting foreign assets indicates how seriously the Islamic Republic is taking the threat of U.N. sanctions.

Iran has bitter memories of its U.S. assets being frozen shortly after the 1979 Islamic revolution.

Worries over Iran helped push oil above $67 on Friday and an Iranian proposal to slash a million barrels a day from OPEC production from April was not calculated to calm markets.

OPEC governor Hossein Kazempour Ardebili told the Mehr news agency the cut was needed because markets are oversupplied by some two million barrels per day, which he said could cause an oil price collapse in the second quarter of the year.

Most traders are more concerned about a shortage of spare capacity and an array of geopolitical risks than any glut.

Iran is the world's fourth biggest oil exporter and OPEC's second largest. Oil revenue, 80 percent of its export earnings, is expected to exceed $40 billion in the year to March 2006.

Shailesh Dash, head of strategic asset management at Kuwait's Global Investment House, said Iran might seek friendly havens for its funds in the Gulf or Asia.

"It's a similar pattern to that which we have seen for the Gulf countries after September 11. If you feel there is a risk of the U.S. imposing sanctions then it makes sense to move those assets to friendly countries, such as the Gulf or Asia."

Swiss banks would welcome asset transfers by Iran, a leading financial industry representative in Geneva said.

(Additional reporting by Christian Oliver in Tehran, Mark Heinrich in Vienna, Dayan Candappa in Dubai, Thomas Atkins in Geneva and Kamil Zaheer in New Delhi)
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