Iran News and Discussions

wig · Post by **wig** » 29 Nov 2010 14:04

'Blasts kill Iran nuclear scientist, wound another'

Tehran, Nov 29 (AFP) Twin blasts in Iran's capital killed a nuclear scientist and wounded another today, said state media reports that promptly blame Israeli agents on motorbikes of attaching the bombs to their cars.

"In a criminal terrorist act, the agents of the Zionist regime attacked two prominent university professors who were on their way to work," the website of Iran's state television network reported, referring to arch-foe Israel.

"Dr. Majid Shahriari was killed and his wife was injured. Dr. Fereydoon Abbasi and his wife were injured," the report said.

Fars news agency said the scientists were targeted in two different locations by men on motorcycles who approached their vehicles and attached bombs to their cars.

Shahriari was a member of the nuclear engineering department of Shahid Beheshti University in northern Tehran, according to the official IRNA news agency.

http://www.ptinews.com/news/1150690_-Bl ... d-another-

Philip · Post by **Philip** » 01 Dec 2010 18:05

More news on the hit.

Yossi Melman: Mossad, MI6, the CIA and the case of the assassinated scientist

http://www.independent.co.uk/news/world ... 46995.html

, 30 November 2010

Three events – not seemingly related – took place yesterday. The leaking of State Department documents, many of which deal with the world's concerns about Iran's nuclear programme; the mysterious assassination in Tehran of a top Iranian nuclear scientist and the wounding of another, and the appointment of Tamir Pardo as the new head of Mossad, Israel's foreign espionage agency.

But there's a link between them. They are part of the endless efforts by the Israeli intelligence community, together with its Western counterparts including Britain's MI6 and America's CIA, to sabotage, delay and if possible, to stop Iran from reaching its goal of having its first nuclear bomb.

The attack on the two scientists, one of them mentioned as a top nuclear scientist working with Iran's Ministry of Defence, was part of these efforts. No organisation claimed responsibility but it is obvious, not just because of accusations by Iranian officials and Iran's media, that Israel was behind it. Most experts who follow Middle East politics and Mossad history would agree.

It is at least the fourth attempt to assassinate Iranian scientists linked with the country's nuclear programme in four years. There were probably other attempts which did not hit the headlines. The attribution to Mossad is not because of the use of motorcycles, though in the past Mossad has been involved in similar operations. The best known one was in 1995 in Valletta, Malta, when a Mossad hit-team liquidated Dr Fathi Shkaki, the leader of the Islamic Jihad.

It has more to do with the policy of Mossad to deal a blow to Iran's nuclear programme. On top of assassinating nuclear scientists to terrorise others and force some to quit, it is believed that Mossad was also behind penetrating Iranian purchasing networks and selling them flawed equipment of its nuclear enrichment centrifuges and most recently by planting a virus which has damaged the nuclear computers at Natanz.

Yet despite these daring ploys, it is obvious to Israeli decision-makers as well as to western leaders that if a country is determined enough to develop nuclear weapons nothing would stop it.

Yossi Melman is a senior commentator for the Israeli daily 'Haaretz' who specialises in strategic issues, terrorism and intelligence

Austin · Post by **Austin** » 02 Dec 2010 09:24

Russia has no grounds to suspect Iran of nuclear weapons plans - Putin

Asked during a satellite interview with U.S. talk show host Larry King, aired on CNN Wednesday, what Russia's attitude is toward Iran's nuclear program, Putin said: "Iran's nuclear program has been implemented for 20 years."

"Iran has recently in this or that way shown that it is ready for dialogue with the international community and the IAEA. Yes, we know that there are questions at the initial stages of work on the program, and we support the IAEA in its desire to receive exhaustive answers," he told King.

"We are concerned... about any theoretical possibility of proliferation of weapons of mass destruction. This relates to absolutely all states, including Iran," Putin said.

"At the same time, we have no grounds to suspect Iran of striving to possess nuclear weapons," the Russian premier said.

"I see nothing blameworthy here, nothing infringing upon Iran's interests if it makes its programs open as much as possible and satisfies the legitimate interest of the specialized international organization - the IAEA - in its work," he said.

"At the same time, I still have the opinion that Iran has the right to pursue nuclear programs under international organizations' control," Putin said.

abhishek_sharma · Post by **abhishek_sharma** » 14 Dec 2010 07:58

Iran’s Foreign Minister close to Khamenei fired

http://www.indianexpress.com/news/Iran- ... ed/724325/

Philip · Post by **Philip** » 14 Dec 2010 16:57

Iran tries a "nuclear-first" foreign policy.
The ascent of Ali Akbar Salehi, head of Iran's nuclear programme, to the position of foreign minister shows where Iran's priorities lie

http://www.guardian.co.uk/world/julian- ... ar-weapons

Manouchehr Mottaki was dismissed as foreign minister in the most humiliating way. His departure was announced while Mottaki was performing his duties abroad. He found out about it while in Senegal, like a classic coup. It may have been Mahmoud Ahmadinejad's revenge for Mottaki's tenacity. He hung on in the foreign ministry a good two years after rumours began circulating that he was finished, with the protection of the Supreme Leader, Ali Khamenei. It is not clear whether Mottaki's departure means he lost that patronage, or whether this represents a challenge to Khamenei.

Ali Akba Salehi, the head of the Atomic Energy Organisation of Iran, and one of the country's several vice presidents, has been named caretaker minister in his place. It says something about Iran and its priorities for a nuclear physicist to get the top foreign policy job, even if it is temporary for now. The preservation of the nuclear programme has become the central organising principle of Iran's foreign policy.

On the other hand, Salehi is one of the few people in the shrinking circle of Iran's policy elite who has significant experience of life abroad. He studied at the American University in Beirut and at the Massachusetts Institute of Technology. Western diplomats generally prefer dealing with him rather than the chief nuclear negotiator, Saeed Jalili (an expert on political thought in the Koran), because he speaks much better English and is less inclined to rant.

Salehi after all signed the "additional protocol" with the International Atomic Energy Agency in 2003 allowing more intrusive inspections, but then had to defend the decision on television back in Iran. Implementation of the protocol was suspended in 2006.

In the Wikileaks US cables from the mission in Vienna (which covers the IAEA), the general consensus of western diplomats there in 2009, when Salehi took over at the AEOI, was that he was a slick operator but relatively powerless.

All described Salehi as an intelligent and skilled interlocutor and prefer dealing with him than some other Iranian officials.

The US Vienna embassy added this:

Comment: Mission's experience on the Tehran Research Reactor negotiations does not give us any confidence that Salehi will be able to deliver cooperation on long outstanding issues.

The then head of IAEA safeguards, Olli Heinonen, took a similar view.

Currently, Heinonen summed up, he cannot be sure about Salehi's level of influence in the regime and with the president, and said while it is clear that Salehi is "good at speaking," it's not clear whether he can "deliver."

Western diplomats, however, are generally cheered by the appointment because it might mean that their contacts with the foreign ministry will now have more substance. During the prolonged sparring between Mottaki and Ahmadinejad, the ministry increasingly became an empty shell, bypassed over major decisions, and irrelevant on the nuclear dossier.

PS:This is a smart move as from his CV,Salehi has excellent knowledge of the west and woud be easier to negotiate with on the key nuclear issue.

Pratyush · Post by **Pratyush** » 15 Dec 2010 16:25

Suicide attacks kill dozens in southeast Iran

How soon the TSP connection is established in this atrocity??

ramana · Post by **ramana** » 15 Dec 2010 22:04

NPR's Frontline Webpage:

Iran's trade with major powers grows despite sanctions

Has a very good table.

arun · Post by **arun** » 17 Dec 2010 06:47

Pratyush wrote:Suicide attacks kill dozens in southeast Iran

How soon the TSP connection is established in this atrocity??

Quite soon it would seem.

The status of the Islamic Republic of Pakistan as being intimately connected with very many of the global acts of Isamic Terrorism is reaffirmed.

Iran’s Fars News Agency, citing Iranian Interior Minister Mostafa Mohammad Najjar is claiming that the attackers of the Imam Hussein Mosque in Chabhar have been trained in the Islamic Republic of Pakistan:

Minister: Chabahar's Bombers Trained in Pakistan

arun · Post by **arun** » 17 Dec 2010 07:03

X posted from the Pakistani Role In Global Terrorism Thread.

Deputy Chairman of Iran’s Majlis Committee on National Security and Foreign Policy Hossein Ebrahimi accuses elements within the Government of the Islamic Republic of Pakistan of supporting terrorists:

"Pakistan should wipe out terrorists"

Thu Dec 16, 2010 11:56PM …………………….

The Iranian lawmaker further expressed dismay over Pakistan's failure to rein in terrorism in its soil, adding that "there are some elements within the Pakistani government that back the terrorists, a weakness that the county has not yet managed to address adequately." …………………….

Press TV, Iran

shyamd · Post by **shyamd** » 18 Dec 2010 01:57

U.S. tried to put the screws on India over Iran

The U.S. had pressured India in a variety of ways in an attempt to persuade it to downgrade its ties with Iran, according to several confidential cables from the New Delhi American Mission leaked by WikiLeaks on Friday.

In cables sent after Iranian President Mahmoud Ahmadinejad briefly stopped over in India in mid-2008, the then U.S. Ambassador, David Mulford, told the then Foreign Secretary Shiv Shankar Menon that “Americans, particularly members of the Congress, will view Ahmadinejad's visit as India providing a platform for an enemy of the U.S.”

This was also the time when India was negotiating the civil nuclear deal with the U.S., and Mr. Mulford sought to link it with New Delhi maintaining close ties with Iran.

While in one cable Mr. Mulford served a mild warning, he later got told off by Mr. Menon when he sought to put the screws on. The telling-off led to Mr. Mulford concluding that “the India-Iran relationship does not need U.S. interference.”

DEMARCHE

A year earlier, several cables reveal how the U.S. harried India on one of its companies trying to supply graphite blocks to allegedly further the Iranian nuclear programme. The Americans served a demarche to India on the issue and forced New Delhi to cancel or withhold the shipments.

One cable also has a U.S. Embassy official complaining to South Block about a meeting between an official of the Indian company with a person they suspected of furthering Iran's ballistic missile programme. In the end, the U.S. was all praise for India's non-proliferation efforts by blocking the graphite shipment.

While the India-U.S. deal was being negotiated, Mr. Mulford told Mr. Menon that “the average American will wonder why the U.S. has gone out of its way to have a nuclear cooperation initiative with India, when India is so friendly to Iran. I cannot predict what the effect of this visit will be, but noted that he expected the Ahmadinejad stop to exercise those members of Congress who have gone out of their way on India's behalf [for the nuclear deal].”

Mr. Menon responded by observing that “there is nothing in this visit that should upset you,” and explained that the Indian government had little choice to say yes when the Iranian government requested a stop in transit. Moreover, he said India and Iran needed to talk about Afghanistan and energy issues.

“We can talk with him without affecting our other relationships,” Mr. Menon contended, and cited the strong India-Israel relationship that withstood India's flirtation with Iran. He also said that in his view, Mr. Ahmadinejad's criticism of the West was a “performance.”

‘NO DICTATION FROM U.S.'

Mr. Menon later got tough with Mr. Mulford when he persisted with this line.

“Menon also cautioned the U.S. against telling India what to do, especially in public. This government has to be seen following an independent foreign policy, not responding to dictation from the U.S. He recognised that Iran presents a global problem, and the U.S. and India differ in how to fix the situation because of geography. For instance, Menon pressed, India must work with Iran to deal with Afghanistan,” the cable said.

‘MILD OPINIONS'

The U.S. does not seem to have been mollified by briefings given by Mr. Menon after Mr. Ahmadinejad's visit. Mr. Menon's reading was that Mr. Ahmadinejad “voiced more mild opinions, and called for strengthening the governments in Afghanistan and Iraq.”

In another briefing, Mr. Menon said Mr. Ahmadinejad was “broadly ideological but mild on specifics.” He admitted: “I had not realised how ideological Ahmadinejad is, and noted that while Mr. Ahmadinejad did not attack the U.S. explicitly, he opined that the U.S. has destabilised Iraq and would withdraw soon.”

When asked about specifics, Mr. Menon said: “Ahmadinejad became relatively mild.” He highlighted Mr. Ahmadinejad's opinions on Afghanistan and Iraq wherein he noted that “there was no alternative to Hamid Karzai and called for strengthening the government in Kabul, and regarding Iraq, he called for greater law and order, but considered the Maliki government good. There was no fire and brimstone in the details.”

shyamd · Post by **shyamd** » 21 Dec 2010 02:56

Iran hangs 11 Sunni rebels, urges Pakistan to act

By Mitra Amiri
TEHRAN (Reuters) - Iran has hanged 11 people linked to a Sunni rebel group that killed 39 people in a mosque bombing, the Justice Ministry said on Monday.
Iran says the rebels of Jundollah, who say they are fighting for the rights of the ethnic Baluch people, find shelter across Iran's southeastern border with Pakistan.
President Mahmoud Ahmadinejad held a telephone conversation with his Pakistani counterpart Asif Ali Zardari, urging Pakistan to arrest "identified terrorists" and hand them over to Iran, state television reported.
The Justice Ministry said those executed were all supporters of Jundollah, which claimed a double suicide bombing of Shi'ite worshippers in the southeast on December 15.
Iran says the group is linked to al Qaeda.
"The people of Sistan-Baluchestan province, in their continuing campaign against the elements of cruelty and insecurity, hanged 11 people at Zahedan prison," the ministry said in a statement on the semi-official Fars news agency.
Iran hoped it had neutralised Jundollah when it executed its leader, Abdolmalek Rigi, in June. But the mosque bombing in the town of Chabahar, which also wounded more than 100 people, was the group's latest riposte.
Jundollah says it is defending the rights of the Baluch people, an ethnic minority group that it says face "genocide."

The families of the bombing victims sent a letter to Zardari calling for "serious measures" against Jundollah and other "terrorist" groups, echoing a call from some Iranian officials.
"These anti-revolutionary groups which have been given shelter in neighbouring countries like Pakistan and are being supported there should be pursued and suppressed on Pakistani soil," said Qolamali Rashid, a senior military official, according to Fars.
"The land forces of the Revolutionary Guard have the ability to do this," he said, referring to Iran's elite military force.
A member of parliament's national security and foreign policy committee said on Sunday that "Pakistan should be served notice" to destroy what he called terrorist training camps.
"If the Pakistan government refused to take measures to destroy the terrorist centres in that country, then the Islamic Republic would have the right to take steps and make the atmosphere unsafe for the terrorists in defence of its own nationals," Kazem Jalali told the semi-official Mehr news agency.
(Reporting by Mitra Amiri; writing by Robin Pomeroy; Editing by Kevin Liffey)

RamaY · Post by **RamaY** » 21 Dec 2010 03:14

Hats off to Iran for single mindedly pursuing its national interests even if they are at odds with many powers.

Suppiah · Post by **Suppiah** » 30 Dec 2010 08:23

http://www.thehindu.com/news/national/a ... epage=true

In a move that is being seen worldwide by who? Beijing puppets? Any evidence? as an example of India succumbing to American pressure, the Reserve Bank of India has barred companies from using the Asian Clearing Union (ACU) to process current account transactions for oil and gas imports — a decision that directly hits at Indian energy imports from Iran. or is it the Iranian oil trade that funds terrorism in ME and elsewhere and favors TSP when push comes to shove?

We should have complete confidence that the good doctor knows what is good for the country and he must have good reasons to do what he is doing. We should not have any confidence in Beijing puppet stalinist rapist goons and their yellow puppets.

Pranay · Post by **Pranay** » 30 Dec 2010 22:00

http://www.nytimes.com/2010/12/31/world ... ?ref=world

Officials in India and Iran scrambled Thursday to keep the $11 billion in oil and gas trade between them going after India’s central bank declared last week that a regional clearinghouse could no longer be used to settle such transactions.

The move, which was long sought by the United States as a way to tighten sanctions against Iran, makes it tougher for Indian firms to buy Iranian oil and gas because they can no longer use the Asian Clearing Union, which was set up by the United Nations in the 1970s to ease commerce between Asian countries, to handle payments.

krisna · Post by **krisna** » 31 Dec 2010 06:45

India restores oil payment to Iran

Having restored payments to Iran for oil imports two days ago, India is now urgently looking for alternative options to process payment to Iran for long-term basis. The Reserve Bank of India (RBI), which had stopped Indian companies from using the Asian Clearing Union (ACU) to process current account transactions for oil and gas imports following American pressure, was asked to “restore” status quo in a high-level meeting early this week. Contrary to reports, sources said India hasn't closed down the ACU route.

WTF is going on.
why cant GOI do the necessary homework before this nonsense.

Suppiah · Post by **Suppiah** » 31 Dec 2010 07:23

You dont restore status quo, it is already there. It should have been status quo ante..why cant our DDM use simple English?

BTW sometimes the puppets dance first and then the string pullers react...

Shamefull surrender says CPM

Wonder what Beijing puppet mass murderers would have said if India had not sent representative to Nobel prize ceremony after PRC pressure...

Neshant · Post by **Neshant** » 31 Dec 2010 07:50

Suppiah wrote:Shamefull surrender says CPM

For once they are right!

abhishek_sharma · Post by **abhishek_sharma** » 01 Jan 2011 13:09

The Shah's Atomic Dreams

http://www.foreignpolicy.com/articles/2 ... mic_dreams

shyamd · Post by **shyamd** » 01 Jan 2011 18:07

Shameful surrender? What does India want in return is the question....

Manny · Post by **Manny** » 01 Jan 2011 23:50

http://www.atimes.com/atimes/Middle_East/LL18Ak02.html

The value of a nuclear Iran
A nuclear-capable Iran may be exactly what is required to destabilize the Wahhabi establishment, reduce support for extreme groups such as al-Qaeda - and usher in a new era of democracy across the Middle East. If the issue of Iran's attitude towards Israel can be addressed comprehensively, a strong Shi'ite state may well suit the strategic requirements of both the West and Asia.

shyamd · Post by **shyamd** » 02 Jan 2011 04:22

^^ India needs Iran so is not really going all out, but at the same time it needs the US. So India is playing a balancing act.

Wahhabism is a belief. Its prevalent and drilled into a lot of the elite. Having a nuclear Iran is not going to help get rid of it. In fact, it will aggravate it and perhaps increase pervalence. Supporting AQ also has internal dynamics for many of these nations. Oh and btw how much does it cost to fund an attack? Not much.

Democracy in the Middle East will make it even worse for these countries. Iran will just buy out groups (just as what PRC does today in India) and make these countries even more weaker. Also, if Iran nuclearises, what do you think the GCC will do? They will weaponise as well. Which means, no one can touch any of the GCC states politically. Say good bbye to democracy.

krisna · Post by **krisna** » 02 Jan 2011 05:12

Can sanctions prevent Iran from going nuclear?

To further coerce Iran on its nuclear program, the United States has slammed more sanctions on Iran. This time the Revolutionary Guards and Iran’s economically vital sectors of energy and shipping were targeted. Iran’s Pars Oil and Gas Company, which is also responsible for tapping some of the world’s largest oil fields, fell under the sanctions regime.
The North and South Pars fields are a potential economic life line for Iran but are affected for paucity of funds, lack of technology and investment, which is either held back or delayed for an indefinite period

The sanctions applied on Iran are aimed at achieving two results: one to economically drain out Iran so that it refrains from pursuing its nuclear program; and to hurt and psychologically twist the Iranian pride.

In case of Iraq, the sanctions were broad based and hurt the ordinary Iraqis that started creating anxiety amongst them and hence greater discords that translated into movements against the presence of foreign forces at the grassroot levels.

However, the Americans and international community widely believe that sanctions will force Iran to come to terms with the IAEA resolutions and provide a greater leverage for diplomacy with Iran. One thing that is forgotten is that the United States had already in place comprehensive sanctions for the last twenty years. However, the Iranians learnt to live with them.
Overtime, Iran has started feeling the economic ill-effects of these sanctions. It is increasingly finding it difficult to woo the international banks to handle the sales of its oil revenues. The value of its currency has also dropped.

For Iran, the big reserves of energy resources have been a double edged sword.
It has proved to be Iran’s greatest vulnerability on the one hand as it relies heavily on energy exports and foreign direct investment in its massive oil infrastructure and on the other hand, it seeks to invest the revenues so generated in its nuclear program in the absence of any alternate funding.

I recall somewhere(dont know from where) that uncle will not act on Iran as long as dollar supremacy is not threatened.
saddam made that mistake, and dealt with non dollar currencies

and bush went to war to defend the dollar supremacy in world market.(by punishing the upstart)

Ravi Karumanchiri · Post by **Ravi Karumanchiri** » 03 Jan 2011 03:44

Iran halts oil sales to India
Trade row escalates as new rules from New Delhi prompt Tehran to refuse payments for crude.

An oil trading dispute between India and Iran has further escalated, with Tehran refusing to sell oil to India under new rules instituted by New Delhi.

The Reserve Bank of India has said that deals with Iran must be settled outside the Asian Clearing Union (ACU) system used by it and other member nations' central banks to settle bilateral trades.

...

The ACU includes the central banks of India, Bangladesh, Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.

India is the biggest buyer of Iranian crude in the group, consuming around 400,000 barrels per day between two state-owned refiners and privately-owned Essar Oil.

http://english.aljazeera.net/news/middl ... 12814.html

pgbhat · Post by **pgbhat** » 03 Jan 2011 04:00

India and Iran oil payment impasse still unresolved

"When it comes to Iran, India can ignore pressure from the U.S. and noises from Israel, but it cannot ignore concerns from the Arab countries," said P.R. Kumaraswamy, head of West Asian studies at New Delhi's Jawaharlal Nehru University.

"In a very subtle way, India is sending a message that its closeness with Iran will not affect relations with other Middle Eastern countries."

shyamd · Post by **shyamd** » 03 Jan 2011 06:47

My comments on the GCC reaction to the wikileaks expose's: http://middleeast-analysis.blogspot.com/

Bits and pieces about Iran too.

Pranav · Post by **Pranav** » 03 Jan 2011 07:12

pgbhat wrote:India and Iran oil payment impasse still unresolved

Regrettable development. There are no UN sanctions which require this. Being done to please Uncle Sam. The danger is that we will burn bridges with Iran with no assurance that the US will ever stop supporting the Paks.

shiv · Post by **shiv** » 03 Jan 2011 07:40

Ravi Karumanchiri wrote:Iran halts oil sales to India

The ACU includes the central banks of India, Bangladesh, Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.

India is the biggest buyer of Iranian crude in the group, consuming around 400,000 barrels per day between two state-owned refiners and privately-owned Essar Oil.

http://english.aljazeera.net/news/middl ... 12814.html

Before we start kicking and screaming about this I think it is necessary to look at what this ACU might be.

http://www.asianclearingunion.org/

From the above site
http://www.asianclearingunion.org/History.aspx

A clearing union can be defined as a multilateral payments arrangement that periodically offsets the debits and credits accumulated by each member against the other members in the process of trade and other transactions. Multilateral clearing or payments arrangements facilitate the use of national currencies, and thus serve to relax the foreign exchange constraints of the members.

This means that India could well be helping Pakistan buy buying oil from Iran via ACU

Pranav · Post by **Pranav** » 03 Jan 2011 08:21

shiv wrote:
Before we start kicking and screaming about this I think it is necessary to look at what this ACU might be.

http://www.asianclearingunion.org/

From the above site
http://www.asianclearingunion.org/History.aspx
A clearing union can be defined as a multilateral payments arrangement that periodically offsets the debits and credits accumulated by each member against the other members in the process of trade and other transactions. Multilateral clearing or payments arrangements facilitate the use of national currencies, and thus serve to relax the foreign exchange constraints of the members.
This means that India could well be helping Pakistan buy buying oil from Iran via ACU

The ACU appears to be a way to minimize use of the US Dollar and the Euro, and the main issue seems to be that the the system makes it difficult for the US to monitor flows of funds.

IMHO, bridges to Iran should be preserved while the US continues to support the Paks.

shiv · Post by **shiv** » 03 Jan 2011 08:31

Pranav wrote: The ACU appears to be a way to minimize use of the US Dollar and the Euro, and the main issue seems to be that the the system makes it difficult for the US to monitor flows of funds.

Paying in US$ is not a problem for India so bypassing the dollar helps Pakistan. Iran should be happy to accept dollars from us.

Pranav · Post by **Pranav** » 03 Jan 2011 09:45

shiv wrote: Paying in US$ is not a problem for India so bypassing the dollar helps Pakistan. Iran should be happy to accept dollars from us.

I would only say that if India is to help the US monitor flows of funds, and also help the elite families that own the Fed by promoting use of the dollar, then there should be proper reciprocation.

Neshant · Post by **Neshant** » 03 Jan 2011 11:18

considering their (US) flow of funds go straight to terrorist promoting states like Pakistan to prop it up against India, I wonder why we even oblige them ? totally stupid policy.

somnath · Post by **somnath** » 03 Jan 2011 11:21

Pranav wrote:The ACU appears to be a way to minimize use of the US Dollar and the Euro, and the main issue seems to be that the the system makes it difficult for the US to monitor flows of funds

Not really, not at all..A clearing Union of this sort is primarily aimed at reducing transaction costs by settling on a "net" basis all trade flows between the members, rather than gross..It does not "minimise" the net requirement of dollars or Euros in country fx reserves, as the actual trades are settled in the banking system in USD and Eur only..As for the US "monitoring" funds flows, it is well beyond anyone's capabilities to monitor funds flows through the international banking systems...Its one of the perennial challenges of tracking terror financing...A system like ACU in fact makes it easier for security agencies to monitor these txns better, as a lot of txns are all "bunched up" through one clearing system..The really suspicious txns will not be routed through convenient multilateral clearing systems, but through multiple layers of the commercial banking system..

shiv wrote:This means that India could well be helping Pakistan buy buying oil from Iran via ACU

Again, not at all...A clearing system does not reduce change the "trade balance" of a country, and thereby its requirement of foreign exchange..So in a 2-country ACU scenario (where Iran and Pak were the only members), if Pak imported 100 million worth of oil and exported 20 million worth of textiles, to and from Iran resp, it would still requirr 80 million of reserves at the end of the year to fund the oil imports....

In ACU, there is also an in-built "swap facility", or the ability of member countries to borrow Fx from each other, but that is efectively like any commercial borrowing..

Pranav · Post by **Pranav** » 03 Jan 2011 11:53

somnath wrote: Not really, not at all..A clearing Union of this sort is primarily aimed at reducing transaction costs by settling on a "net" basis all trade flows between the members, rather than gross..It does not "minimise" the net requirement of dollars or Euros in country fx reserves, as the actual trades are settled in the banking system in USD and Eur only..As for the US "monitoring" funds flows, it is well beyond anyone's capabilities to monitor funds flows through the international banking systems...Its one of the perennial challenges of tracking terror financing...A system like ACU in fact makes it easier for security agencies to monitor these txns better, as a lot of txns are all "bunched up" through one clearing system..The really suspicious txns will not be routed through convenient multilateral clearing systems, but through multiple layers of the commercial banking system..

From above cited link -

A clearing union can be defined as a multilateral payments arrangement that periodically offsets the debits and credits accumulated by each member against the other members in the process of trade and other transactions. Multilateral clearing or payments arrangements facilitate the use of national currencies, and thus serve to relax the foreign exchange constraints of the members ...

In this system, at the end of each settlement period the balance (the amount which has not been cleared in the system) settled by US dollar.

http://www.asianclearingunion.org/History.aspx

So it seems that the participating nations agree to accept each other's currencies for trade within the group, and conversion to the dollar happens only at the end of each settlement period. So the requirement for dollars is much reduced.

somnath · Post by **somnath** » 03 Jan 2011 12:25

Pranav wrote:So it seems that the participating nations agree to accept each other's currencies for trade within the group

That is a bit of sophistry in definition, IMO...Take the specific case of Iran-India trade...Do we then, under the ACU pay Iran in Iranian Rial (IRR), or in Indian rupee (INR)? Neither, as none of the two currencies are freely tradeable outside their respective geopgraphical boundaries...If you theoretically still did, how do you determine the INRIRR exchange rate to be used? The only way of doing it would be by taking a "cross rate", or impute the rate from USDINR and USDIRR...In other words, in case a country is short 80 dollars on the trade acount with another country, how do you settle the difference? Do we pay Iran IRR? Or INR? We cant source IRR in the market, and Iran has no use for INR.......So finally, the net settlement has to happen in USD/EUR (or some other globally traded ccy, like SGD, HKD, maybe CNH etc)..

In ACU, there are only two nostro acocunts that member countries maintain - one in USD and the other in EUR..So settlement happens in these globally traded ccies.

JE Menon · Post by **JE Menon** » 03 Jan 2011 13:53

As far as I know, Iran has stopped nothing - so far

somnath · Post by **somnath** » 03 Jan 2011 17:59

JE Menon wrote:As far as I know, Iran has stopped nothing - so far

It doesnt need to - India does not need a multilateral clearing system to make international payments for imports, normal banking channels will do..Unless of course there is really a political diktat to go slow on Iran..

shiv · Post by **shiv** » 03 Jan 2011 20:06

somnath wrote: Again, not at all...A clearing system does not reduce change the "trade balance" of a country, and thereby its requirement of foreign exchange..So in a 2-country ACU scenario (where Iran and Pak were the only members), if Pak imported 100 million worth of oil and exported 20 million worth of textiles, to and from Iran resp, it would still requirr 80 million of reserves at the end of the year to fund the oil imports....

In ACU, there is also an in-built "swap facility", or the ability of member countries to borrow Fx from each other, but that is effectively like any commercial borrowing..

Pakistan imports 100 million worth of oil from Iran. Iran imports 20 million worth of textiles. Pakistan then exports 80 million worth of say, prostitutes, to China. China deposits 80 million in the bank in Iran's name. Everyone is happy.

Or Pakistan imports 100 million worth of oil from Iran. Iran imports 20 million worth of textiles. Pakistan supplies 80 million worth of onions and cement to India. India deposits 80 million in the bank in Pakistan's account for Iran to take.

Sounds like legal hawala to me.

shiv · Post by **shiv** » 03 Jan 2011 21:04

The wording is obscure - but it seems to m that this ACU mechanism will allow Indian dollars to be used by third party nations for oil purchases while third party nations may agree for a settlement of the account in Pakistani Rupees as long as the two countries agree to allow that.

http://www.asianclearingunion.org/ProcedureRules.aspx

When a commercial bank desires to fund its ACU dollar or ACU euro account with its correspondent bank in another participating country, it may purchase the required amount of ACU dollar or ACU euro either from a local commercial bank having a surplus in that participating country or from its central bank. In the latter case, it will surrender equivalent amount of US dollars or euros or, at the option of the Central Bank, the equivalent in the local currency to its own Central Bank for remittance through the ACU mechanism. The participant receiving the amount will advise the participant in the country concerned to make available the amount in US dollars or euros to the concerned bank in that country. After making the payment, the second participant will advise the Secretary General of the ACU to credit its account by debit to the first participant's account.

shiv · Post by **shiv** » 03 Jan 2011 21:11

http://www.deccanherald.com/content/124 ... looms.html

Under the ACU mechanism, imports by the nine nations are settled every two months with every member paying for imports after netting out its exports among the union. Till 2008, payments under the ACU mechanism were made in US dollars. But after America imposed sanctions on Iran over its suspected nuclear programme, the currency shifted to euro.

United Nations sanctions do not forbid buying Iranian oil and recently the European Central Bank (ECB) asked the RBI and other ACU central banks to provide certificates that the euro being used to import products are not on the US sanctions list. Sources said while certification for crude oil imports was easy to provide and track, RBI chose to scrap the entire system itself.

Government sources said that Indian firms could open letters of credit, which were often required for buyers and sellers of cargo to guarantee payment upon delivery or at an agreed future date.

But the bank where the money has to be transferred to is missing from the chain.
Finding an alternative bank for Iranian oil trade instead of central banks will be difficult as EIH Bank of Germany, which used to act as a facilitator for such transactions for the ACU members, has been brought under US sanctions.

In September, the United States sanctioned Tehran-owned European-Iranian Trade Bank AG, called EIH Bank in Germany, for facilitating billions of dollars of transactions with Iranian banks that the United States and European Union have blacklisted for aiding Iran’s nuclear or missile programmes.

shiv · Post by **shiv** » 03 Jan 2011 21:15

http://www.jpost.com/IranianThreat/News ... ?id=181887

German bank funding Iran nuke program
BERLIN – German authorities are facing criticism because of the role of a Hamburg-based Iranian bank in financing Teheran’s nuclear and missile development programs. Europäisch-Iranische Handelsbank (EIH) specializes in financing trade between Europe and Iran and has been blacklisted by the US government.

The Jerusalem Post has learned that Western diplomats have criticized Germany for failing to join the UK and France in their push to clamp down on EIH as part of wider sanctions against Iran. When asked about the criticism, a spokesman for the German Foreign Ministry told the Post last week that the the federal government was “working with its European partners on an intensified implementation of the recent UN Security Council resolution against Iran.” The spokesman added that efforts also included “continued restrictions in the bank sector.”