http://today.reuters.com/news/NewsA...4Z_01_L18188832_RTRUKOC_0_US-NUCLEAR-IRAN.xml Iran says moving assets Fri Jan 20, 2006 9:54 AM ET By Parinoosh Arami TEHRAN (Reuters) - Embroiled in a nuclear standoff with the West, Iran said on Friday it was moving its foreign assets 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. 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," Indian Foreign Secretary Shyam Saran told the news conference. China's state-run press urged Iran to halt nuclear work and return to the EU talks, but argued against sanctions. 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. Iran's ambassador to the IAEA, Aliasghar Soltaniyeh, said referral "lacks a legal basis" and would be hard because of the views of Russia, China and some European and developing nations. 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 off 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 the second largest in OPEC. Oil provides 80 percent of its export earnings, which have soared over the past two years. Economists estimate Iran will have earned more than $40 billion in oil revenues by the end of the year to March 2006. Of this, $16 billion goes straight to budgeted government spending. The rest goes to the Central Bank of Iran which keeps an unknown amount in foreign accounts. 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. -------------------------------------------------------------------------------- © Reuters 2006. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.