BRUSSELS, June 23: European Union states agreed on Monday to impose new sanctions against Iran, including an asset freeze on its biggest bank, over its refusal to meet demands to curb its nuclear enrichment programme.

But the EU said the door remained open to possible talks over an international package of incentives delivered to Tehran earlier this month by EU foreign policy chief Javier Solana for Iran to suspend uranium enrichment.

The new EU sanctions are the latest attempt by the West to put pressure on Iran over the nuclear issue and will target businesses and individuals the West alleges are linked to its nuclear and ballistic programmes.

“The individuals will be banned from entering the EU and the entities will be banned from operating in the EU,” said an EU official, who wanted to remain anonymous, after EU ministers rubber-stamped the measures at a meeting in Luxembourg.

The EU is due to publish the names of those affected on Tuesday but the official said the Bank Melli would face an asset freeze under the moves, while the visa bans would target “very senior experts” inside Iran's nuclear and ballistic programmes.

“Its impact (will be) more expensive imports,” Iranian analyst Saeed Laylaz said of the impact on Iran of the move against the Bank Melli, a key supplier of export guarantees.

“The economy of Iran will be more dependent on Chinese markets,” he added of a growing shift in Iran's focus to Asia that has seen Europe's share of the Islamic Republic's trade dwindle to 25-30 per cent from twice that was five years ago.

The Bank Melli has branches in Paris and Hamburg and a unit in London called Melli Bank Plc. A source close to the subsidiary said it was seeking information from British authorities on whether and how the sanctions would affect it.

Carrot and stick

The EU official stressed the sanctions were based on measures agreed by the UN Security Council and that six powers -- the five permanent members of the council plus Germany -- still sought an answer from Iran to their incentives offer.

“We are continuing with the double-track,” the official said of the carrot-and-stick policy that has until now not induced Iran to curb a nuclear enrichment programme.

The United States and the EU agreed this month they were ready to take additional steps aimed at ensuring Iranian banks could not back proliferation and terrorism.Diplomats say there are exploratory talks in the West about the possibility of targeting Iran's energy sector with future sanctions.

Iran insists its nuclear enrichment work is a peaceful programme, but the dispute has sparked fears of military confrontation and helped push up oil prices to record highs.

Iran's oil minister has put its windfall crude export earnings at $6 billion per month and acting economy minister Hossein Samsami said at the weekend existing sanctions were not having a major impact on the country's economy.—Reuters