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Keep low economic profile in Iran, Einhorn urges

Kyodo

A former U.S. State Department official who had been tasked with overseeing sanctions on Iran is urging Japan to refrain from engaging in economic activities there for now in line with steps aimed at curbing Tehran’s nuclear activities.

“I think for this six-month period, it will be important for the international community to hold back especially in the sanctioned areas and wait to see if things work out,” Robert Einhorn said Tuesday during a visit to Tokyo.

His remarks came after Iran and six countries — Britain, China, France, Germany, Russia and the United States — reached a first-stage agreement in Geneva last month in which Iran is to curb its nuclear activities in return for having some sanctions eased.

Iran is to stop uranium enrichment above a fissile purity of 5 percent and halt construction of its Arak heavy-water reactor, which could yield plutonium. In return, the six countries are to remove the embargo on precious metals.

The easing of sanctions has spurred the interest of companies looking to do business again with Iran, but Einhorn said that “what the U.S. administration will want to avoid and warn against is prematurely going back into” the nation, especially in fields that are still subject to sanctions, such as the energy sector.

The former State Department official said the Obama administration will be telling governments and companies “to exercise caution especially over this six-month period to ensure that we have leverage intact” to eventually come out with a “good final deal” on the Iranian nuclear issue.

While acknowledging that “Japan’s principal need is energy” in light of the Fukushima nuclear crisis, Einhorn noted that sanctions related to the energy and financial sectors remain in place.

“It would be very risky to use Iranian banks that have been sanctioned and I think Japanese companies will want to be very cautious about that,” he said.

According to Einhorn, “all major governments that have commercial interests in Iran,” including China, South Korea and Turkey, will be warned that sanctions remain in place and told “not to go back in prematurely but wait and see” how the first stage of the agreement unfolds.

“We are not singling out Japan by any means,” he said.

The Japanese government and companies withdrew in 2010 from an oil field development project in Azadegan in southwestern Iran to avoid being included in a list of companies subject to U.S. sanctions.