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Last Updated: Friday, 20 January 2006, 17:45 GMT
Iran 'moves assets out of Europe'
Isfahan uranium conversion facility
Iran could face sanctions if it is brought before the UN
Iran has started moving its foreign exchange reserves out of Europe in a bid to shield the country from the threat of sanctions, reports suggest.

Iran's central bank governor said the country had begun withdrawing assets from European banks, the Iranian Students News Agency reported.

Iran is embroiled in a row with the US and European Union over allegations it is attempting to build nuclear weapons.

The UN's atomic agency is due to meet on 2 February to discuss the crisis.

Russian solution?

The BBC's Damian Grammaticas in Moscow says a possible solution to the growing dispute may have emerged, after Russia said Iran has expressed interest in a proposal to enrich uranium on Russian territory.

The highly sensitive process of enriching uranium is what lies at the heart of the dispute between the West and Iran.

Iran has started withdrawing money from European banks and transferring it to other banks abroad
Iranian official

Low level enriched uranium is used as fuel in nuclear power stations, but uranium enriched to higher levels can be used in nuclear weapons.

Western countries are afraid that oil-rich Iran is secretly pursuing nuclear weapons and that allowing it to master the enrichment process will inevitably lead to weapons acquisition.

Iran denies the allegations, claiming it wants the technology for energy purposes alone.

Moscow's offer to carry out enrichment for Teheran, but supervised on Russian soil was first made last year, but rejected.

Emergency meeting

Now the head of Russia's atomic energy agency, Sergei Kirienko, has told President Vladimir Putin that Iran is ready for detailed discussions about the proposal.

Natanz nuclear facility in Iran
Iran has broken the seals on three nuclear facilities

Mr Kirienko added that Iranian officials may come to Moscow for talks in the near future.

Our correspondent says the plan could be the best hope of defusing the escalating tensions over Iran's nuclear programme.

Western nations have been pressing for the issue to be referred to the United Nations Security Council, which could impose sanctions on Iran.

The UN's nuclear watchdog, the International Atomic Energy Agency (IAEA), will hold an emergency meeting to discuss whether to refer Iran to the Security Council.

The council has the power to impose international trade or diplomatic sanctions against Iran.

Assets withdrawn

In response to the threat Iranian central bank governor Ebrahim Sheibani revealed earlier in the week that Iran had begun the process of shifting its assets from Europe, the Iranian Students News Agency said on Friday.

"We transfer foreign currency reserves related to all sectors including oil foreign exchanges to wherever it is good for us and we have started this transfer," the agency quoted him saying.

"Iran has started withdrawing money from European banks and transferring it to other banks abroad, " a senior Iranian official told the Reuters agency.

It was not immediately clear where the assets were being moved to, although reports have suggested that Iranian funds could be heading out of Europe to Asia.

Iran's assets in the US were frozen after the revolution of 1979, which saw the pro-Western Shah toppled and a clerical regime installed in Tehran.

It is difficult to estimate the amount of assets that Iran has abroad, but the Asharq Al-Awsat Arabic daily said that about $8bn (4.5bn) had already been moved, mainly to Asian markets.

Other sources have put the total value of Iran's foreign assets at somewhere between $30bn and $50bn.

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