U.S. says Iran still looking to acquire nuclear material

VIENNA (AFP) -- Tehran is still seeking to sidestep sanctions to get materials for its nuclear programme, a senior US official said Friday on a European tour seeking to cool renewed corporate enthusiasm about doing business in Iran.

Iran is "undoubtedly still looking for ways to acquire material for their nuclear programme," the US official, speaking in Austria on a tour also taking in Britain, Germany, Turkey, Italy and other places, said on condition of anonymity.

"We have seen over many years that the Iranians take advantage of the commercial and financial relationships that purport to be for legitimate purposes to surreptitiously acquire materials that they are looking for for their nuclear programme and their ballistic missile programme, to facilitate their support for terrorism," he said.

As a result he said that any "responsible" firm should think twice before seeking to do business with Iran when the Islamic republic gains minor relief from sanctions from Monday as part of a nuclear deal with world powers.

Under this "first step" accord struck in Geneva in November, Iran will -- from Monday -- freeze some of its nuclear activities for six months in exchange for a package of sanctions relief worth $6-7 billion, according to Washington.

Over this period, during which time Iran will still miss out on some $30 billion in oil revenues, Tehran and the world powers will seek to strike a long-term accord ending for good the long-running standoff over its nuclear work.

According to media reports, since the November deal Western firms have been falling over themselves to try and win business in the oil-rich Islamic republic.

But the US official said that with the core of sanctions still in place, most notably on Iran's banks, it "remains extraordinarily difficult" to do business in the Persian Gulf country, and that any new trade may contravene the sanctions.

"There is some enthusiasm in the business community about the prospect for business in Iran. One of my objectives (of this trip) is to temper that enthusiasm with a dose of reality," he said.

"The overtures that have been made here and elsewhere to the Iranian business community are I think premature, not good business, and they are not fundamentally helpful in the pathway to maximise the chances ... for a comprehensive resolution."