Iran and the European Moment

Last week, only days after a U.N. Security Council Resolution introduced new sanctions against Iran, Europe's leaders approved guidelines to expand their scope. Given that Europe is Iran's main trading partner, a bold move now could have devastating implications for Ahmadinejad, Khamenei & Co. But will Europe go far enough? Scepticism seems in order. Everything will depend on the details that must be worked out before next month's meeting of foreign ministers.

After years of fruitless engagement, the U.N. resolution offers a basis for those European Union countries pushing for tougher sanctions—chiefly France, Great Britain and the Netherlands—to convince their reluctant partners to finally hit the Islamic Republic where it will hurt.

Unlike the U.N. measures, which were significantly watered down to keep Russia and China on board, Europe's guidelines sound tough. In addition to visa bans and asset freezes on Tehran's stalwarts, governments called for new restrictions on trade, the financial sector, shipping and air cargo, and, most crucially, the energy sector. Specifically, the guidelines push for barring “new investment, technical assistance and transfers of technologies, equipment and services related to these areas, in particular related to refining, liquefaction and LNG [liquefied natural gas] technology.”

But EU decision-making is cumbersome and consensual. The last time the U.N. passed sanctions against Iran, in March 2008, it took the EU five months to pass its own set of implementation rules. Although those rules went beyond the U.N. measures, it was a case of the mountain bringing forth a mouse.

Why would it be different this time? EU diplomats have been working for months to overcome all objections, have obtained the political agreement of their leaders, and have a draft of specific measures ready to pass before the EU goes on holiday in mid-July. Old divisions, though, remain.

The EU's newcomers from eastern and central Europe are fence-sitters. Their economic relations with Iran are negligible. But in some cases, such as the Czech Republic, skepticism about sanctions stems from a belief that Iran, like all tyrannies, is impervious to sanctions. If anything then, the tougher the measures, the more enthusiastic this group's support would be.

The real contest is among western Europeans. First, there are the “shipping” states (Cyprus, Malta, and Greece); their revenues from port services make them strong opponents of any measure to expand the scope of U.N. sanctions against Iran's shipping lines.

Then, there are the “U.N. states” (Austria, Belgium, and Sweden), who, having turned peaceful multilateralism into an article of faith, shun confrontation at all costs. For them, EU sanctions were unthinkable before a U.N. resolution; even now, they remain unpalatable, for philosophical reasons. Expanding them is a hard act to swallow, especially because some of these countries' U.N. worship is augmented by profitable business deals with Iran.

Which brings us to the “energy states,” (Denmark, Spain, Italy, and once more Austria), whose national energy companies' exposure and interests in Iran make their governments less enthusiastic about additional sanctions that could target Iran's natural gas or petrochemical sectors.

Then there are the “Chamber of Commerce states” (Germany, and again, Austria and Italy), whose industries enjoy lucrative trade deals with Iran, making them a powerful lobby against sanctions.

Finally, there is Sweden. Its economic involvement inside Iran may not be significant but according to diplomatic sources, its foreign minister, Carl Bildt, still seems to resent the fact that he was not appointed to be the EU's foreign policy chief. EU diplomats say that Mr. Bildt has stalled the process out of pure spite. It's worth noting also that, during Sweden's EU presidency, the country refused to endorse even the mildest sanctions in response to Iran's arrest of the British embassy's non-diplomatic personnel in Tehran. Sweden's ambassador was also one of a handful of Western diplomats in attendance at Mahmoud Ahmadinejad's inauguration last year. Despite Sweden's general support for the U.N. on virtually any other topic, Mr. Bildt has even criticized the latest round of U.N. sanctions.

That leaves France, Britain, and the Netherlands with a formidable challenge. One argument they might offer is that, if tough new sanctions against a regime like Iran's are beholden to economic interests, philosophical scepticism, and ego, how can anyone ever rely on the European Union to deliver?

They could also note the U.N. resolution's reference to “the potential connection between Iran's revenues derived from its energy sector and the funding of Iran's proliferation-sensitive nuclear activities,” as well as its point that “chemical process equipment and materials required for the petrochemical industry have much in common with those required for certain sensitive nuclear fuel cycle activities.” Given the EU's stated commitment to fighting proliferation, the resolution thus gives reluctant policymakers a strong prompt to impose energy sanctions.

That could lead the EU to deliver the most far-reaching measure possible: By banning exports, investments, and transfers of technology in strategically critical areas of Iran's energy sector, they could set back for years Iran's efforts to modernize its technologies, and cut the regime's financial lifeline at a time when it is particularly vulnerable internally.

Similarly, thanks to the U.N.'s broad references to Iran's Revolutionary Guard companies, the EU could expand the U.N. list and add dozens more, especially those with procurement branches in European jurisdictions. U.N.-mandated vigilance on Iranian banks, including Iran's Central Bank, could also pave the way for heavier EU banking restrictions against Iran, that could ultimately push the Islamic Republic outside the euro zone. So too could a U.N. embargo on heavy weaponry sales give the EU the excuse to ban the kind of light weaponry the regime needs for internal repression. And the U.N.'s “enhanced vigilance” on shipping and air cargo, coupled with an EU ban on such companies and the services they need, could cripple Iran's procurement efforts.

Ultimately, France, Britain, and the Netherlands must convince the rest that nuclear weapons in the hands of Iran's leaders, and the arms race in the Middle East that would likely follow, would be a menace to all they cherish. Only then will they sacrifice their narrow economic interests to enact tough sanctions against the Islamic Republic.

The language and the legal framework so paramount for Europeans as a cover for this kind of action have now been provided. Europe no longer has a valid excuse not to act, and its responsibility to do so has never been greater.

Mr. Ottolenghi is a senior fellow at the Foundation for Defense of Democracies and the author of the forthcoming book “Iran: The Looming Crisis” (London, Profile Books: 2010).