Gaza Latest: Israel's Flotilla Enquiry, Germans Ban Turkey's IHH, & Libyan Ship En Route to Gaza

Israel's Enquiry: Last week, the Israeli Government agreed to expand the powers of the civilian Turkel Commission to include the right to subpoena witnesses. However, this was not satisfactory for activist organization Gush Shalom who requested that the committee be given the power to investigate soldiers as well. The High Court's response was not to discuss the petition further unless the commission requests that it carry out such an investigation.

Meanwhile, the head of  the military committee, Maj.- Gen. (res.) Giora Eiland, has presented the Israeli Chief of Staff, General Gabi Ashkenazi with a 100-page report detailing findings over into the military operation against the Freedom Flotilla's Mavi Marmara.

Gaza Latest: Amalthia to Break the Siege?, Ireland’s “Revenge”, Mavi Marmara Becomes a Hotel?

The report says that there were only "operational mistakes" but no "operational failures" made in the planning stage of the operation. The committee criticized the Navy for not preparing a “Plan B” for the operation and said the commanders should have reconsidered putting commandos onto the Mavi Marmara’s upper deck after noticing from sea and air that there were several dozen activists on board prepared to violently resist.

The committee also said that military intelligence did not designate Turkey or the flotilla's organiser IHH as a target for gathering of information. Eiland described Turkey as "a friendly country up until 2010" and assessed the relationship with Israel as a "deteriorating" one.

Germany Bans IHH: On Monday, Germany banned the International Humanitarian Relief Organization (IHH), the organiser of the Freedom Flotilla. German Interior Minister De Maiziere said organizations that "directly or indirectly work against Israel's right to exist lose their right to be active in Germany." The first response came from the European Jewish Congress (EJC):

Over a month ago we called on front-groups like the IHH to be proscribed and banned from raising funds in Europe, we encourage the European Union to give this the highest priority. Now that Germany has shown the way, we hope that European Union and other European governments will officially ban the IHH.

It is vital that the European Union and European governments act quickly to ban organizations which pose as charities or humanitarian agencies from raising funds that assist terrorism, murder and militant activity.

Libyan Ship to Arrive Gaza on Wednesday?: The Libyan-backed aid ship, the Amalthea, is to arrive at Gaza on Wednesday, according to Agence France Presse.

The website of the charity funding the ship, headed by Saif al-Islam Gadaffi, son of Libyan leader Muammar Gaddaffi, stated that "the crew on board the ship maintains a positive mood".

Haaretz reports military officials' statements that IDF is ready for forceful interception despite continuing criticisms.

Gaza Latest: Amalthia to Break the Siege?, Ireland's "Revenge", Mavi Marmara Becomes a Hotel?

Amalthia to Break the Siege?: Having Youssef Sawani, executive director of the Gaddafi International Charity and Development Foundation, said Sunday in an interview with Army Radio that the vessel was heading for Gaza; Foreign Minister Avigdor Lieberman told Army Radio that “no ship of any kind will be allowed to arrive at Gaza.”

The ship is still in high waters and Israeli defense officials stated that they were tracking the vessel and would make contact with the ship and request that it follow naval vessels either into Ashdod Port or into Egypt's port of El-Arish. A government official said: “This exercise is both a superfluous and unnecessary gesture.”

Ireland's "Revenge"?: It is reported that Ireland is trying to block a European Union initiative that would enable Israeli companies and European companies to exchange information about customers. The European Commission wanted European governments to approve a declaration that the EU recognises Israeli data protection standards as being sufficient to allow member states to transfer personal data.

UPDATED Gaza Latest: Ship Sent by Gadhafi’s Son Breaking Israeli Blockade?
Gaza Special: UN Cancels Middle East Session But Begins Freedom Flotilla Enquiry

However, Ireland's Justice Minister Dermott Ahern said that since Israel allegedly used forged Irish passports to carry out the assassination of Hamas official Mohammed al-Mabhouh in Dubai, Israel should not be allowed access to this data.

Although Israel denied any link with the Dubai assassination, Ireland expelled one Israeli official from Dublin.

Mavi Marmara Waiting Its Fate: Israeli city Haifa's Mayor Yona Yahav wrote a letter to the Defense Minister Ehud Barak requesting that the Mavi Marmara ship be turned into a floating hotel off the coast of Haifa. Yahav wrote: "I feel that Haifa, a symbol of coexistence and cooperation between all religions, would be the appropriate home for this ship, which will turn into an international symbol of reconciliation and hope."

The Latest from Iran (6 July): Compromise?

2047 GMT: Today's All-is-Well Alert. Press TV plays up the statement of the head of Iran's Trade Promotion Organization that, despite UN sanctions, non-oil exports have grown 27%.

No word in the statement on how oil exports are doing.

Iran & Sanctions: Could Tehran’s Flights Be Grounded?
Iran Analyses: A Rafsanjani-Khamenei Deal on Universities Crisis? (Siavashi and Verde)
The Latest from Iran (5 July): Talks and Conflicts

2045 GMT: Energy News. Iran has finally put out a major oilwell fire which had been raging for 38 days.

2040 GMT: Parliament v. President. Kalemeh has more information on today's attack by legislator Ahmad Tavakoli (see 1230 GMT) on the Government and his claim of Mahmoud Ahmadinejad's lack of respect for the law.

1705 GMT: Political Prisoner Watch. Journalist Sasan Aghaei, held from November to April with 40 days in solitary confinement, has been given a one-year prison sentence.

1500 GMT: Parliament v. President. "Conservative" member of Parliament Reza Akrami has issued another denunciation of the recent demonstrations against the Majlis and its bill on control of Islamic Azad University: "Those who insult the Majlis stand apart from hardline principles. What happened was illegal."

1455 GMT: A Minor Strike? Press TV, while referring on today's stoppage by traders at the Tehran Bazaar, says that it was a "minor strike" by "several wholesale cloth traders". The website does note the jewellers' guild has announced it will join the strike on Wednesday (there were reports that some gold traders had closed their doors today).

In what appears to be an immediate reaction to the strike, Mehr News reports that Iran's Ministry of Commerce has reversed its decision to raise business taxes by 70%.

1355 GMT: Defending Iran. An intriguing angle emerging from the Mousavi-Khatami meeting (see 1235 GMT)....

The two men denounced the UN sanctions against Iran, questioning why no similar action had ever been taken against Israel and declaring that the Iranian people will not let any power interfere with their internal affairs". Mousavi and Khatami also criticised "the West" for its support of "terrorist groups".

1235 GMT: Meetings. Former President Mohammad Khatami's website has published a summary of his meeting on Monday with Mir Hossein Mousavi (see 1125 GMT).

1230 GMT: Parliament v. President. Another challenge from key member of Parliament Ahmad Tavakoli, who has said in a speech --- my paraphrase --- "How dare the President say that the law does not apply to him."

1220 GMT: The Bazaar Strike. Peyke Iran claims that this morning's strike in the Tehran Bazaar (see 1120 GMT) over Government taxes was in the gold and textile markets.

1215 GMT: Airlines, Sanctions, and Safety. A new twist in the tale of Iran's possibly-grounded flights: the European Union has banned most of Iran Air's jets from flying to Europe. EU officials denied that the measure was connected to international and US sanctions, with a spokesperson insisting, "We deal purely with safety requirements. Our controls focus entirely on safety, nothing else."

1130 GMT: Press Un-Freedom. One weekly publication in Tehran Province, Madineye Goftogu, has been banned for "slander of officials" and three others have received warnings.

1125 GMT: Discussions. Aftab News reports that Mir Hossein Mousavi and former President Mohammad Khatami have met to discuss the domestic situation and international sanctions.

1120 GMT: Economy Watch. Kalemeh claims, from eyewitnesses, that there was "unrest and strikes" amongst merchants, protesting over Government tax policy, in the Tehran Bazaar this morning.

1115 GMT: The International Front. The Chinese Foreign Ministry has criticised unilateral US sanctions in a news briefing: "China has already noted that the United States and other parties have unilaterally put in place further sanctions against Iran. Not long ago, the U.N. Security Council approved resolution 1929. China believes that the Security Council resolution should fully, seriously and correctly be enforced and cannot be wilfully elaborated on to expand Security Council sanctions measures."

Meanwhile, the head of the Iran-United Arab Emirates Chamber of Commerce says the managers of two companies linked to Iran’s Islamic Revolution Guard Corps have had their bank accounts frozen in response to the latest UN sanctions: “Khatam al-Anbiya and their subsidiaries, and companies that they thought were involved in Iran’s atomic work, are on the list.”

0830 GMT: Political Prisoner Watch. Parvin Jamalzadeh, detained on Ashura (27 December) has been sentenced to 8 1/2 years in prison for acting against national security by participating in illegal gatherings, disturbing public order, committing blasphemy, and insulting the Supreme Leader.

Journalist Emaduddin Baghi's court appearance has been postponed to mid-August.

Rooz Online publishes an interview with the daughter of Mohammad Seddigh Kaboudvand, the founder and president of the Kurdistan Human Rights Defense Organization, who is entering the fourth year of a 10-year prison sentence.

Tonia Kaboudvand speaks of worries over her father's health and says, “Human rights activists and defenders have been silent about my father’s situation and have over time forgotten about it.”

0810 GMT: Investment v. Sanctions. Rooz Online summarises this interesting development: Iran is removing barriers to foreign banks operating in the country.

Deutsche Welle, however, notes that sanctions are causing increasing difficulties for European companies such as EON and RWE to invest in Iran's energy sector.

0755 GMT: Attack on the Clerics. Ahmad Montazeri, the son of the late Grand Ayatollah Montazeri, has reiterated that the attack on his family's house last month was carried out in the presence of some government officials.

0745 GMT: The Labour Front. Iranian Labor News Agency reports that 500 workers at the Abadan oil refinery have protested and gone on strike over unpaid wages.

0715 GMT: Halting Democracy? Green Voice of Freedom claims that the recent Parliamentary decision to postponing municipal elections is the first step in a plan, backed by the Supreme Leader, to eliminate all elections.

0705 GMT: Rafsanjani Watch. And, amidst the talk of a Khamenei-Rafsanjani deal to avert immediate political crisis, two stories in Rah-e-Sabz that indicate others in the Government are still trying to cut down the former President.

The website claims that Rafsanjani was banned from ceremonies last week marking the "7 Tir" bombing of 1981. And it reports that the head of the office of Yasser Hashemi, Rafsanjani's youngest son, was arrested yesterday.

0700 GMT: Then Again.... Back to our opening story on the supposed resolution of the Islamic Azad University crisis through the Supreme Leader's intervention. A member of the Supreme Council for Cultural Revolution has said that the suspension of the SCCR's decision --- which effectively overrules Parliament and backs President Ahmadinejad --- is only temporary.

Press TV is now reporting on Khamenei's letter to Ahmadinejad and Rafsanjani "suspending" any decision on the university.

0650 GMT: Parliament v. Government. The Majlis is insisting that it should have the authority, as prescribed by the Constitution, to review treaties with foreign countries or companies.

The declaration should be seen in the specific context of the intervention by Speaker of Parliament Ali Larijani and other legislators in the international manoeuvres over Iran's uranium enrichment.

0640 GMT: Flashback of Resistance. Green Voice of Freedom recalls Mir Hossein's final appearance on Islamic Republic of Iran Broadcasting: "Death, yes. Retreat, never."

0630 GMT: Sanctions and Iran's Airlines. More follow-up from our story yesterday that US-led sanctions on fuel for Iranian aircraft may be grounding flights....

The Iranian Foreign Ministry has denied this morning that any flights are being affected and insists that supplies are uninterrupted.

The German Government has again said that fuel has been refused. That, however, does not cover the possibility that private companies --- like BP, who said yesterday that it had suspended deliveries --- have cut off supplies.

0530 GMT: We begin this morning with another check on the state of the universities crisis between President, Parliament, and Hashemi Rafsanjani.

Iranian media are taking the line that the Supreme Leader has ordered a suspension of both the Parliament's bill and the intervention of the Supreme Council of the Cultural Revolution, which in effect backed President Ahmadinejad's control of the university. It is unclear what Khamenei's decision means for the future of the institution; the university's new President was supposed to be appointed yesterday.

It is notable, however, that the suspension effectively recognised the current arrangements: 1) the Supreme Leader's order was announced by the university’s board of trustees; 2) Khamenei's directive went not only to Ahmadinejad and the SCCR but also Rafsanjani as "Board of Trustees Director".

China's Economy This Week: Exchange Rates, Growth, and Tariffs

Exchange Rate Reform: The Chinese central bank's declaration of further reform of the exchange rate has been welcomed by other countries and international organizations such as International Monetary Fund.

"Now China is reforming its RMB exchange rate regime and further improving its managed floating RMB exchange rate system," said Zhang Tao, International Department director with the central bank of China.

From July 2005, China has moved towards a managed floating exchange rate.



China "to Maintain Steady, Rapid Growth": China's economy is very likely to maintain steady and rapid growth in 2010, but it still faces a complex domestic and international situation, the People's Bank of China, China's central bank, said Wednesday.

It is imperative to continue support for economic restructuring and transformation of growth, the central bank said.

China and US Raise Anti-Dumping Duties: China said Monday it would impose anti-dumping duties ranging from 6.1 percent to 26 percent on certain iron or steel fasteners imported from the European Union beginning Tuesday.

The Ministry of Commerce said China's domestic industry of manufacturing certain iron or steel fasteners had suffered substantial damages caused by the EU's dumping of these products in Chinese domestic markets and the tariffs would last for a period of five years.

Meanwhile, the US Commerce Department Monday set final anti-dumping duties on imports of some $55.92 million woven electric blankets from China, a move might escalate trade disputes between the two countries.

The US International Trade Commission is scheduled to issue its final injury determination on or before 9 August.

Rising Industrial Profit & Revenue: Profits of China's industrial enterprises jumped 81.6 percent year-on-year for the first five months of 2010, China's National Bureau of Statistics said.

Profits of the industrial firms totaled 1.54 trillion yuan ($226.82 billion) from January to May, and revenues increased 38.2 percent to 25.35 trillion yuan. State-owned industrial firms accounted for more than one third of the total profit, reaching 524.38 billion yuan, 118.9 percent higher than the same period last year.

China is expected to receive 8 trillion yuan ($1.18 trillion) in financial revenue by the end of 2010, State broadcaster CCTV reported

If that happens, China will become the second-largest country in terms of income, trailing only the US.

Iran Analysis: Assessing Europe's Sanctions & Tehran's Oil (Noel)

Writing on Race for Iran, Pierre Noël offers an interesting analysis of European sanctions and Iran's oil and gas position, both regarding exports and imports. In the end, its significance is not as much economic --- Noël does not, for me, get to the heart of the tensions over whether Iran can satisfy its domestic demand, given the gap in imports and production left by the withdrawal of foreign companies, as well as cope with the restrictions on its exports --- as political: "Any issue that allows EU [European Union] member states to present a united front and make Europe exist on the world stage looks like a gift from heaven":

Iran is a country with very large reserves of natural gas, a lot of it relatively low-cost to produce.  With the right investment, Iran could become a gas exporter of global significance in about a decade.  Europe is one of the largest gas markets in the world.  Its combination of liberalized electricity markets and ambitious environmental policies has the effect of favoring gas as a fuel for power generation, at least in the mid-term.  Russia’s position in the European gas market raises concerns about market power and the politicization of gas supplies from Russia.  The EU supports new gas pipeline projects from Central Asia and the Middle East through Turkey to diversify Europe’s sources of natural gas; the availability of Iranian gas could be essential to the success of this diversification strategy.  Russia, on the other hand, should want to prevent or delay the emergence of Iran as a large gas exporter.

However, there are a number of uncertainties, which, taken together, raise serious questions about the practical validity of these interlinked propositions.  First, at the moment we do not know to what extent the latest EU sanctions will add to the difficulties already experienced by the Iranian oil and gas industry to source technology and finance.  These is a log of oil and gas activity going on in Iran, but large-scale gas export projects combining complex financing and cutting-edge engineering are not part of this activity.  This is certainly the case for LNG [liquified natural gas] projects, an area where the relevant technology is still largely controlled by Western companies; it is unclear to what extent big pipeline export projects could be carried on.

Second—and more fundamentally—it is far from certain that becoming a large gas exporter is a strategic priority for Iran, or even a clearly defined objective.  Iran’s potential to become a large gas exporter has been recognized for decades, but that potential has never materialized.  Iran imports roughly 5 billion cubic meters of gas per year (bcm/y) from Turkmenistan and exports roughly the same amount to Turkey.  The Islamic Republic’s small export contract with Turkey is notoriously unstable and has led to numerous rows over price and delivery.  European majors such as Total and Shell have had a terrible experience negotiating with Iran over LNG projects (and, during the 1990s, over oil projects as well).  When the European companies pulled back from new projects in Iran three years ago, ostensibly because of sanctions, the companies were not in a position to make final investment decisions on these projects for commercial reasons.

Becoming a large gas exporter would require a strategic decision by Iran, based on a wide political consensus—such as the one underpinning the Iranian nuclear program—to open the sector for real to foreign investors.  There is deep opposition to such a move in the Iranian political culture and the culture of its oil and gas bureaucracy, rooted in the memories of the U.S.-sponsored coup of 1953 following the nationalization of British oil concessions by the nationalist Mossadegh government.  If becoming a large gas exporter was a strategic objective for Iran, then the Iranian government would appear hopelessly incompetent at pursuing it.  Bu tgeology is not destiny; Iran may not want to be the next Qatar.

Furthermore, Iran is itself a large and fast-growing gas market, now 30% larger than the largest European markets, the UK and Germany.  Iran needs to continue developing some of its reserves simply to supply its domestic market; that is what Iran’s gas-related exploration and production activity has been about for some time and—I would suggest—that is what Iran’s gas-related exploration and production activity will continue to be mainly about.  The existing sanctions have been effective at killing proposed LNG export projects—but these projects might not have gone ahead anyway, in the absence of sanctions, for commercial reasons.  There is no indication that the sanctions have had any impact on the growth of gas production in Iran.  I do not know to what extent the Iranian industry’s exploration and production effort relies on European technology and services that would be made unavailable by new EU sanctions, and would not be replaceable by technology and services from Asian or South American companies.

This does not mean that Iran has no strategic energy policy.  In the context of the standoff with the “international community” over its nuclear program, Iran is obviously trying to use the attractiveness of its energy resources and geographical position to its political benefit.  The growing interest of Chinese oil and gas companies in Iran has been widely documented—but it has not led to any new gas export project.  Turkey’s ambition to increase its access to Turkmen gas via Iran has already been discussed on www.TheRaceForIran.com (see here andhere).  Given how strategic Turkmen gas (and the trans-Caspian pipeline) is to Europe’s Nabucco concept, Iran has an option to provide Turkey with both access to gas and leverage on Europe.  The Iran-Pakistan pipeline project, for which the Pakistani government has just reaffirmed its support, is another example where Iran uses its energy assets strategically to raise the cost of the U.S.-EU Iran policy.

The final point is about Europe’s plans for a large pipeline across Turkey that would bring gas from Central Asia and the Middle East to the EU, especially south-east and central Europe....

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