Byline: Vance Serchuk

AFTER TWO YEARS of patient diplomacy with Iran, representatives of the E.U.-3--Germany, France, and Great Britain--recently acknowledged that their negotiations with the Islamic Republic had reached a "dead end." Spurred by Teheran's decision to restart work at its enrichment facility in Natanz, the Europeans condemned Iran's "documented record of concealment and deception" and called for an emergency meeting of the International Atomic Energy Agency, to be held next month in Vienna. There they intend to demand a referral to the U.N. Security Council, strongly backed by the Bush administration. It's likely they will get it.

And what then? With international consensus at last hardened around the notion that the Iranians are determined to develop nuclear weapons, the debate and speculation have already begun over precisely what action Washington and its allies should propose. In brainstorming the different measures that could put the screws to Iran, however, it's useful to remember that the United Nations is not the only international organization in town. The Bush administration could also look to the World Bank.

According to the World Bank's 2005 Annual Report, Iran is the ninth largest borrower from the IBRD--the branch of the bank that gives loans to middle income and credit-worthy poor countries. Iran has received over $1.1 billion over the past three years, more than half of that in the last year alone. That's more than Ukraine, Poland, or Pakistan.

Putting an end to this practice wouldn't be hard. The United States has had the option to block these loans for years, thanks to the fact that the distribution of power inside the World Bank, unlike at the United Nations, bears a vague relation to reality. The Bush administration, however, has chosen to abstain rather than vote against Iran.

Skeptics are likely to point out that the loans are geared toward a humanitarian purpose and thus, shouldn't be linked to Iran's nuclear misconduct. Providing Iran with money for sewage treatment plants and irrigation systems, after all, can't possibly help the regime in its quest for weapons of mass destruction.