Japan Wary Of Plan for Sanctions Against Iran

By Anthony Faiola and Dafna Linzer
Washington Post Foreign Service
Tuesday, June 13, 2006

TOKYO, June 12 -- Despite months of pressure from Washington, Japan has become increasingly reluctant to join a Bush administration plan for sanctions against Iran if negotiations fail to resolve concerns over the country's nuclear program, Japanese and U.S. officials said Monday.

Japanese officials are suggesting that their country, which has more at stake in Iran financially than any other potential sanctions partner, may not join in punitive measures unless there is a broad international consensus along the lines of a U.N. Security Council resolution or other measure backed by nations now reluctant to impose sanctions, such as China. The White House had hoped instead to bring Japan into a "coalition of the willing" that avoided dealing with "recalcitrants" such as Russia and China.

The administration's fallback plan if talks with Iran fail -- tough financial measures imposed by a small group of like-minded countries -- depends strongly on Japanese participation. Without it, administration officials have calculated, the impact would significantly decrease.

Japan consumes 22 percent of Iranian oil exports and is slated to begin development this year of the largest and most modern onshore petroleum fields built in Iran since the 1979 Islamic revolution. That has caused Japan to experience an uncomfortable tug of war between its allegiance to Washington and its financial and energy interests in Iran.

Analysts and Western diplomats have called the Bush administration's bid to sway Japan -- by far Iran's largest trading partner -- a key test of the likelihood that U.S. allies will ultimately agree to make painful sacrifices to force Tehran into compliance.

At a meeting of finance ministers of the Group of Eight major industrial powers in Russia last Friday, Treasury Secretary John W. Snow asked Japan to consider sanctions, including barring financial institutions from conducting transactions in Iran. Japan's finance minister, Sadakazu Tanigaki, replied that any such move would first need to be discussed "more broadly with Europe and others."

On Monday, Secretary of State Condoleezza Rice and Japanese Foreign Minister Taro Aso discussed the Iranian situation by telephone, agreeing to cooperate in resolving the standoff, the Japanese Foreign Ministry said in a statement.

Initial sanctions under consideration against Iran would largely spare the global trade in Iranian crude oil. But the most severe sanctions -- including cutting Tehran off from access to the dollar, euro, British pound and yen -- would be a step "potentially imperiling European and Japanese trade, including the oil trade," according to a Treasury Department task force report on the measures' likely international impact.

Privately, Japanese officials have said they intend to set a high bar for any action. "We would not do anything without the full support of the international community," a senior Japanese government official said, speaking on condition of anonymity because of the issue's sensitivity. "For example, we would need a vote of the U.N. Security Council or a similar measure that would have to include China and Russia. Otherwise, Japan might end up moving out of Iran only to see someone else's oil companies rush in."

Japanese officials have said that while they have deep concerns about Iran's nuclear program, they worry that aggressive sanctions could create a foothold for China. Viewed by Japan as its prime competitor in the global energy market, China ranks just behind Japan in consumption of Iranian oil.

Iranian officials have already threatened to nullify a massive contract signed with Tokyo-based Inpex, an energy giant that is partly owned by the Japanese government, for development of the Azadegan petroleum fields along Iran's long and treacherous border with Iraq.

Inpex has so far postponed full-scale development work, citing a dispute over the number of land mines to be cleared from a drilling area that is estimated to contain reserves of about 26 billion barrels of oil. But sources familiar with the project have also described the delay as an effort by Japan to buy time -- to ensure that progress is made in the nuclear standoff before the Japanese company pumps hundreds of millions of dollars into the project.

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