Wednesday, Aug 31, 2011


 
 
   By Laurence Norman 
   Of DOW JONES NEWSWIRES

BRUSSELS (Dow Jones)--The European Union reached a fresh deal Wednesday night on broadening its sanctions on Syria, with member states agreeing on a compromise date that will give companies with existing oil import contracts more time to comply with an oil embargo, diplomats said.

The original deal had been held up by a last-minute objection Tuesday from the Italian government, which was concerned that European companies with existing oil-import contracts weren't being given enough time to adjust to the embargo.

The EU originally proposed that temporary exemptions expire Oct 30. Italy pushed for a Nov. 30 deadline. On Wednesday, member states split the difference and agreed on a Nov. 15 deadline.

The agreement opens up what could prove the most significant step yet taken against the Syrian regime of President Bashar al-Assad over his crackdown on protesters.

The measures include the oil embargo, the withdrawal of technical assistance for European Investment Bank projects, and a change in the legal basis of the sanctions so the EU in the future can target those benefiting from or supporting the regime, not just those implicated in the violence.

However, as previously reported by Dow Jones Newswires, the measures won't include a ban on European companies investing in the Syrian energy sector, a measure that could be adopted in future sanction rounds, diplomats said.

There was also a deal on Tuesday to target four new individuals and three companies with an asset freeze and travel ban. This measure is likely to take effect Friday, when EU foreign ministers meet in Poland.

One diplomat said the oil embargo and other measures could also be approved as early as Friday. But a second official said they may take effect over the weekend. Sanctions are only formally implemented when they are published in the EU's Official Journal.

Anglo-Dutch major Royal Dutch Shell PLC (RDSA, RDSA.LN), France's Total SA (TOT, FP.FR) and Hungarian firm MOL Nyrt (MOL.BU) are the only European firms with significant production interests in the country.

Around 95% of Syrian oil exports go to the EU, providing a significant portion of the regime's revenues.

The EU has already slapped sanctions on 50 individuals and nine entities as part of its response to the Syrian crackdown. That includes several Iranians and the Tehran-based IRGC Qods Force--also known as Quds Force--a specialist arm of the Iranian Islamic Revolutionary Guard that the EU says has provided technical assistance to Syria's security services.

While the asset freeze and travel bans are seen by many diplomats as raising pressure on the regime, the oil embargo step would be a much bigger step. One EU diplomat told Dow Jones Newswires this week that the oil embargo would be a "significant and direct blow to the regime" in Damascus.

-By Laurence Norman, Dow Jones Newswires; 32-(0)2 471 1481; laurence.norman@dowjones.com

(END) Dow Jones Newswires

31-08-11 1802GMT