The Wall Street Journal Interactive Edition April 13, 1997 Iranians Protest Berlin Verdict, But Some Say Rift May Be Brief

More than 100,000 Iranians marched on the German Embassy in Tehran on Sunday to protest a Berlin court ruling that implicated Iranian leaders in political assassinations.

Hundreds of Iranian police clad in full riot gear encircled the embassy compound in downtown Tehran. While they stopped the crowd from burning a German flag and an effigy of the German judge who issued the verdict, the protest was orderly, with no reports of violence. On Friday, thousands of demonstrators gathered outside the embassy, where they chanted slogans and burned U.S. and Israeli flags.

Although there was some tough anti-German talk among some Iranian legislators during a closed session of Iran's parliament on Sunday, Tehran appeared committed to controlling the fallout from the court case. The parliament pressed the government to take harsh action against Germany, including claims for financial damages and suspension of investments, the official IRNA news agency reported.

The agency quoted vice-speaker, Hassan Rowhani, as telling the session that the government should "fully review Tehran's relations with Germany."

Mr. Rowhani specifically said that Iran should "speed up proceeding" to receive 300 million deutsche marks in damages for a previous "submarine contract" that Germany's had not fulfilled. He also urged compensations of 18.00 billion marks from Germany for, what he said, its failure to complete the construction of Bushehr nuclear power plant. IRNA didn't name the German company contracted for the power plant.

He also said Iran should speed up taking legal action against German firms that supplied Iraq with long-range missiles and chemical weapons during the Iran-Iraq war between 1980-1989.

On Saturday, Hossein Moussavian, Iran's ambassador to Germany, arrived home. Iran recalled the ambassador after every European Union country except Greece withdrew its ambassador from Iran in response to the ruling Thursday.

The German judges convicted four men of the 1992 slayings of Iranian Kurdish dissidents in Berlin. They said Iranian leaders were behind the killings. Iran has denied involvement.

Tehran's Farsi-language newspapers, reporting the verdict for the first time Saturday, made no mention of the court's condemnation of Iran's top leaders. The news was reported in full only in the less read English-language papers. The Tehran protests recall similar state-run rallies in November, when the Berlin court first implicated Iran's supreme leader, Ayatollah Ali Khamenei, and President Hashemi Rafsanjani in the 1992 murders. Protesters then pelted the embassy with rotten tomatoes.

In its verdict Thursday, the court said the orders came from Iran's top leaders, but did not name them. It found Kazem Darabi, an Iranian who worked as a grocer in Berlin, and a Lebanese man, Abbas Rhayel, guilty of the Sept. 17, 1992, killing of Iranian Kurdish leader Sadiq Sharafkindi and three colleagues in the Mykonos restaurant in Berlin.

Both men were sentenced to life in prison. Two other Lebanese --Youssef Amin and Mohamed Atris -- were convicted of being accomplices. Mr. Amin was sentenced to 11 years in jail. Mr. Atris was given five years and three months. A fifth defendant, Lebanese Atallah Ayad, was acquitted. Iran has denied any involvement in the murders and an official of Iran's Foreign Ministry said Friday the court's decision was baseless and lacked legal credibility.

As the European Union called a special meeting on EU policy toward Iran -- set for Thursday -- and some German companies quietly withdrew workers from the region, industry experts and Middle East watchers didn't think the ruling would have a significant impact on trade between Europe and Iran.

Oil industry experts said EU economic sanctions on Iran are unlikely, because sanctions would have too severe an impact on the economies of both sides. Germany is Iran's largest Western trading partner, with exports and imports between the two countries totaling $1.8 billion in 1996.

While oil accounts for 82% of Iranian exports, and creates the bulk of the state's revenue, Europe and the rest of the world could end up paying sharply higher prices for oil if Iranian production was taken out of the market.

Hence, it's likely the "two sides will prepare to end this tension at a diplomatic level in the next two to three days," said Medhi Varsi, an oil sector analyst at Kleinwort Benson in London.

While many German companies with links to Iran said they want to see how events develop before judging the business impact of the diplomatic breakdown, some employers are quietly withdrawing remaining German workers from the region, spokesmen for several industrial concerns said Friday. They were quick to add that their companies' operations there are minimal.

"We have to wait and see," said a spokesman for steel maker Fried. Krupp AG Hoesch-Krupp -- which is 25% held by Iran's government -- when asked how the decision might affect business ties. "Iran is a completely normal shareholder."

But the decision should cause "no big changes" because Krupp Hoesch doesn't have any big Iranian contracts or orders, the spokesman said. Middle East analysts in Washington don't expect Thursday's verdict to lead to a disruption in trade between the EU and Iran, despite the EU suspension of ties. Germany, which has been the biggest supporter of the "critical dialogue," arguing that it eases discussion of human rights and terrorism, is Iran's largest trading partner.

"My short-term prediction is that we will see a temporary breaking of relations, maybe some acts of violence, but over the long haul, you will see efforts [by the Europeans] to mend the fences with Iran," said Christine Helms of Petroleum Finance Corp.

Patrick Clawson of the Institute for National Strategic Studies added, "We'll just see an end to critical dialogue with Iran, but nothing stronger.

We might see countries already unhappy about EU policy towards Iran, such as Denmark, Britain and The Netherlands, consider a reduction in their Tehran embassy staff, but I don't expect them to join the U.S. sanctions regime."

The U.S. has taken a hard-line approach to Iran, initiating a trade embargo in 1995 against the country and passing legislation last year that would allow the president to sanction any foreign company that makes large investments in Iran's energy sector.