LONDON - Britain froze business ties with an Iranian bank and state-run shipping firm Monday, citing fears that they were involved in helping the Islamic Republic to develop nuclear weapons.

Iran dismissed the move and a separate U.S. warning that major powers would not wait forever for Tehran to prove it was not developing nuclear bombs, saying any threats or deadlines would have no impact.

The order applies to Bank Mellat and Islamic Republic of Iran Shipping Lines, both of which have previously faced sanctions from the United States.

Making an order under counter-terrorism laws rather than U.N. sanctions, Britain said it was convinced that Iran's disputed nuclear program was a threat to its security.

The Treasury is satisfied, as required by the Act, that activity in Iran that facilitates the development or production of nuclear weapons poses a significant risk to the national interests of the UK, Treasury minister Sarah McCarthy-Fry said in a written statement to parliament.

The Treasury said it welcomed recent talks between Iran and six world powers, including Britain, but said that action was needed now against the two businesses, accusing them of links to nuclear weapons and ballistic missile programs.

Asked about the timing of the move, a Treasury spokesman said When the government identifies such activities, it is committed to curtailing them.

The action follows criticism of Iran from U.S. Secretary of State Hillary Clinton and British Foreign Secretary David Miliband at a news conference in London Sunday.

Iran, which says its nuclear work is for peaceful electricity generation, agreed at a meeting in Geneva on October 1 to allow U.N. inspectors access to a newly disclosed uranium enrichment plant near the city of Qom.

The Islamic state has repeatedly rejected demands to halt its sensitive nuclear work, despite three rounds of U.N. sanctions since 2006. Progress in the Geneva talks was seen as heading off calls for an immediate round of tougher sanctions.


Iranian suspicions of London date back to British imperial rule in the Middle East and Iran warned Britain that its latest move was likely to rebound on it.

If the British government decided to impose sanctions against Iran this would show that Britain is getting far from the realities of the current world and such a trend will be against the interests of the British people, Ali Akbar Javanfekr, a media adviser to President Mahmoud Ahmadinejad, told Reuters.

Britain does far less business with Iran than other European countries such as Germany, Italy and France. Treasury officials did not have any details on how much commerce there was with the two Iranian companies it had targeted.

Visiting London Sunday, U.S. Secretary of State Clinton said the world would not wait indefinitely for evidence that Iran was prepared to live up to its international obligations.

Iranian Foreign Ministry spokesman Hassan Qashqavi reiterated Iran's refusal to discuss its nuclear rights with the six world powers -- the United States, Britain, France, Germany, Russia and China.
We have announced several times that we have nothing to discuss regarding that, he told a Tehran news conference in comments translated by Iran's state Press TV.

That means continuation of our activities within the framework of the nuclear Non-Proliferation Treaty and the safeguards agreement of the IAEA and enrichment on that basis, he said, referring to the U.N. nuclear watchdog.

The state-run Islamic Republic of Iran Shipping Lines (IRISL) has a fleet of around 100 ships including container and dry bulk vessels used to transport consumer goods and commodities such as coal, grain and iron ore into Iran, its web site said.

The British statement accused it of shipping material for missile programs.

Vessels of the Islamic Republic of Iran Shipping Lines have transported goods for both Iran's ballistic missile and nuclear programs, it said.

Similarly, Bank Mellat has provided banking services to a U.N. listed organization connected to Iran's proliferation-sensitive activities, and been involved in transactions related to financing Iran's nuclear and ballistic missile program.

(Additional reporting by Fredrik Dahl in Tehran and Jonathan Saul in London; Editing by Jon Hemming)