The European Union approved plans on Monday to impose sanctions against Iran because the Islamic Republic refuses to halt uranium enrichment.

EU foreign ministers finalized United Nations plans drawn up in December to ban the sale of materials and technology that could be used by Iran to develop nuclear weapons. The plans include a freeze on the assets of 10 Iranian companies and individuals.

The EU decision on Monday means that all 27 EU governments will implement the UN sanctions.

But the U.S. is critical of the sanctions, saying they do not go far enough. Washington would like Europe to follow the U.S. in cutting trade ties with Tehran as punishment. EU diplomats reminded members that they may go beyond the UN sanctions if they wish.

Iranian President Mahmoud Ahmadinejad has said he wants to harness nuclear energy only for civilian purposes, not to develop atomic weapons, and has repeatedly defied UN pressure to stop building nuclear centrifuges in an underground bunker.

But Western nations fear Tehran will enrich uranium to "weapons grade," then use the material to fuel and build bombs.

Iran can still return to negotiations within the next two months, the council said. EU foreign ministers also reiterated that a package of economic incentives remains on offer if Tehran abandons nuclear enrichment.

The EU already has in place a 10-year ban on the sale of weapons to Iran.

EU officials in Munich met Sunday with Iran's top national security official Ali Larijani, but the Iranian official said it would not suspend its nuclear program as a precondition for talks.

Mohamed ElBaradei, the head of the UN's nuclear watchdog, said on Sunday he welcomed Iran's willingness to resume negotiations with the West. But he called for nothing short of "full transparency" on Iran's part.

"I still hope that they will try through dialogue to create the conditions to go back into negotiations," ElBaradei told the Associated Press.

With files from the Associated Press