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Monday 20 January 2014

UPDATE 3-West, Iran activate landmark nuclear deal

Reuters


* IAEA report shows Iran suspending some nuclear activity

* EU eases some economic sanctions in return

* White House says will ease some sanctions, enforce others

* Interim deal seen as step towards broad nuclear settlement (Recasts with EU, US lifting sanctions, adds Hague quotes)

By Fredrik Dahl and Justyna Pawlak

VIENNA/BRUSSELS, Jan 20 (Reuters) - Iran has halted its most sensitive nuclear activity under a preliminary deal with world powers, winning some relief from economic sanctions on Monday in a ground-breaking exchange that could ease the threat of new war in the Middle East.

The United States and European Union both announced they were suspending some trade restrictions against the OPEC oil producer after the United Nations' nuclear watchdog confirmed that Iran had met its end of the Nov. 24 agreement.

Tehran is expecting to be able to retrieve $4.2 billion in oil revenues frozen overseas and to resume trade in petrochemicals, gold and other precious metals.

The mutual concessions are scheduled to last six months, during which time six powers - the United States, Russia, China, France, Britain and Germany - aim to negotiate a final accord defining the scope of Iran's nuclear activity.

Western governments want to lay to rest their concerns that Iran could produce an atomic weapon and to end decades of hostility with Tehran that goes back to the Islamic revolution of 1979. Iran wants an end to painful U.S. and EU trade and financial sanctions that have severely damaged its economy.

The interim accord, struck after years of on-off diplomacy, marks the first time in a decade that Tehran has limited its nuclear operations, which it says have no military goals, and the first time the West has eased economic pressure on Iran.

"This is an important first step, but more work will be needed to fully address the international community's concerns regarding the exclusively peaceful nature of the Iranian nuclear programme," the EU's foreign policy chief Catherine Ashton said.

"The iceberg of sanctions against Iran is melting," the head of Iran's Atomic Energy Organisation, Ali Akbar Salehi, told Iranian state television.

The breakthrough is widely seen as a result in part of the election of Hassan Rouhani, a relative moderate, as Iran's president last year. Rouhani is expected to court global business this week at the World Economic Forum in Davos, although any future trade bonanza depends on the long-term success of nuclear diplomacy.

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