Brussels: The European Union and Canada hammered Iran on Monday with fresh sanctions against its energy sector as the West cranked up pressure on Tehran to resume talks on its disputed nuclear programme.
European foreign ministers formally adopted new punitive measures, going beyond a fourth set of UN sanctions imposed over Tehran`s refusal to freeze nuclear work, echoed by Canada within hours.
The moves are aimed at reviving moribund talks between Iran and six world powers -- Britain, China, France, Germany, Russia and the US.
"We want to see dialogue on nuclear weapons capability to start as soon as possible in order to reach an agreement," EU foreign affairs chief Catherine Ashton said.
"Until we get to that point we will continue to take our responsibilities seriously... (The) purpose of those sanctions is to persuade Iran, `we need to discuss this issue, and move forward`."
However, Iran responded by saying the sanctions would fail and only serve to complicate its showdown with the West.
"Sanctions are not considered an effective tool... and they will only complicate the situation" was the reaction from foreign ministry spokesman Ramin Mehmanparast, quoted by the state news agency IRNA.
Oil Minister Masoud Mirkazemi said the punitive measures would not affect the country`s oil production.
"European oil companies had no presence (in Iran`s energy sector) and so they cannot have any impact on us," Mirkazemi told IRNA.
The EU measures include a ban on the sale of equipment, technology and services to Iran`s energy sector, hitting activities in refining, liquefied natural gas, exploration and production, diplomats said.
The sanctions also prohibit new investments in the energy sector.
The Iranian banking sector was also hit by restrictions forcing any transactions over 40,000 euros (around 52,000 dollars) to be authorised by EU governments before they can go ahead.
The identities of those hit by the new measures will be available when sanctions are published in the official EU journal, but diplomats said 41 people and 22 government entities were concerned.
Canada`s sanctions also take aim at Iran`s energy and banking sectors, as well as chemical, biological and nuclear activities, Foreign Minister Lawrence Cannon said.
Like the EU and the United States, Canada will bar all new investment in Iran`s energy industry, particularly crude oil refining and liquefied natural gas.
Ashton has exchanged letters with Iran`s chief nuclear negotiator Saeed Jalili in recent weeks in a bid to revive talks, and Tehran has indicated that the talks could resume in September.
The last high-level meeting between Iran and the six world powers was held in Geneva in October 2009 when the two sides agreed a nuclear fuel swap that has since stalled.
Western powers have demanded that Iran suspend its uranium enrichment programme, fearing that Tehran would use the material to build a nuclear bomb. Tehran says its atomic programme is a peaceful drive to produce energy.
"Iran`s ongoing refusal to engage constructively on this issue leaves us no option but to implement these sanctions," said British Foreign Secretary William Hague.
The longer Iran refuses to talk to the six world powers, "the greater the pressure and isolation Iran will bring upon itself," he said.
Iranian Foreign Minister Manouchehr Mottaki said at the weekend Tehran was ready to hold immediate talks on a nuclear swap deal brokered by Turkey and Brazil in May.
World powers have given the cold shoulder to that deal, a counter-proposal to the October agreement.
But Iran answered questions raised by the United States, Russia and France over the May deal in a letter delivered to the Vienna-based International Atomic Energy Agency on Monday, the agency said.
"The letter has been conveyed to the governments of France, Russia and the United States, as well as to the governments of Brazil and Turkey," the agency said.
The new EU sanctions follow a similar move by the United States against Iran`s energy industry. The IAEA said the sector would suffer a "material impact."
Iran is the world`s fourth largest producer of crude oil, but imports 40 percent of its fuel needs because it lacks enough refining capabilities to meet domestic demand.