Iran is coming under even greater pressure to curb its nuclear program. The U.N. Security Council is expected to vote soon on a fresh round of sanctions against the country. U.S. Defense Secretary Robert Gates said that the draft resolution is even "somewhat stronger" than he expected. According to the New York Times, even the very lucrative energy sector is mentioned in the preamble, noting the "potential connection between Iran's revenues derived from its energy sector" and possible financing for its nuclear program.
Advocates of strong measures believe that economic sanctions are an effective tool to deal with Iran's nuclear ambitions, which the West fears is aimed at making an atomic bomb. They point to the fact that the mere threat of sanctions already convinced several foreign companies to stop trading with Iran.
Opponents, including Shirin Ebadi, the Iranian winner of the Nobel peace prize, fear that economic sanctions will hurt common Iranians and will have unintended consequences. They argue that the Iranian government had many ways to circumvent economic measures.
Anyone who wants to discuss the pros and cons of sanctions should know the story of a very particular man. A man, whom The Daily Beast recently called "one of the world's smoothest and greatest villains." Marc Rich is his name, the billionaire oil trader and former fugitive infamously pardoned by President Bill Clinton.
I tell his story in my book The King of Oil, which is based on series of exclusive interviews with the controversial trader. To put it in a nutshell: Marc Rich was the big profiteer of past Iranian sanctions, when the Islamic revolution exploded in 1979.
But more than that: His story goes to the core of the question whether sanctions can be effective.
After the November 1979 seizing of the U.S. Embassy in Tehran, President Jimmy Carter imposed tough economic measures against Iran. They were tougher then the ones discussed today: President Carter banned the import of all petroleum products from Iran, he blocked all Iranian government assets in the U.S., and he prohibited U.S. citizens from conducting financial transactions with Iran. The Iranians in turn canceled all contracts with American oil companies operating in Iran and forbade them from exporting crude oil out of the country.
The American embargo proved to be a boon for Marc Rich. Despite the sanctions, Iran became Marc Rich's most important supplier of crude oil for almost two decades. Rich acknowledges in my book that he maintained a much more intensive business relationship with Iran than was previously known. It extended far beyond the transactions he was indicted with in 1983 for trading with the enemy by then-prosecutor Rudolph W. Giuliani. Thanks to the trade with Iranian crude Marc Rich became "the undisputed King of Oil," as one of his longtime associates referred to him.
"We performed a service for them," Rich told me. "We bought the oil, we handled the transport, and we sold it. They couldn't do it themselves, so we were able to do it." His laconic statement helps to explain why traders such as Rich exist in the first place and why they are in such great demand -- regardless of sanctions.
His company, the Swiss based Marc Rich + Co, purchased 60 to 75 million barrels of Iranian oil every year up to 1994, when Rich sold the company to the management (which then renamed it "Glencore"). The contract continued throughout the hostage crisis of 1979/1980; even after the USA had broken off diplomatic relations.
Rich's most important clients in these years were two countries, which officially were not allowed to buy Iranian oil in the first place: Israel and South Africa. Both countries had been almost completely dependent on oil from the Shah's regime, but the new regime in Tehran added a clause to all contracts that explicitly prohibited the further sale of Iranian oil to them.
Rich would serve as Israel's and South Africa's vital supplier of oil. He remembers selling Israel 7 to 15 million barrels per year. He provided the Jewish State with at least one out of every five barrels that it needed. Even bigger was the business with South Africa -- which itself was under an international embargo. I calculated that Rich's companies delivered at least 400 million barrels of oil to South Africa, making a profit of two billion dollars over the course of fifteen years.
The new Iranian ruling class was well aware of Rich's business with Israel and South Africa. They knew exactly where their oil was flowing. "They didn't care," Rich told me. "The professionals in the oil business in Iran didn't care. They just wanted to sell oil." And Israel and South Africa just wanted to buy it.
"Business is neutral", Rich answered to my question how it is possible to remain neutral when doing business with racist, dictatorial, and corrupt countries like Iran, apartheid South Africa, or Cuba. "You can't run a trading company based on sympathies." When I replied that he was viewed as a crisis profiteer and sanctions buster he just said: "Whatever we did, we did legally. We were doing business with Iran, Cuba, and South Africa as a Swiss company. These businesses were completely legal according to Swiss law."
South Africa is probably the best example of the double moral standards in the discussions about economic sanctions. The list of countries from which the oil for the apartheid regime was obtained reads like a list of all oil-producing nations. The oil came from Iran and Saudi Arabia, from Dubai and Angola, from Nigeria and the Soviet Union. All of these countries were vocal opponents of the apartheid regime and had loudly proclaimed that they would maintain the boycott against South Africa.
In reality, however, when it came to money, profit triumphed over principles. When it came to oil needs, national interests triumphed over ideology. All these countries -- whether Islamic, Communist or Capitalist -- made, via Marc Rich, lucrative secret deals with the apartheid regime. Rich was used to conceal the contradictions between political rhetoric and economic deeds -- and to circumvent the sanctions.
These are the reasons why economic sanctions against Iran will almost surely fail once more. There will always be the need for hard currency. There will always be national interests. There will always be traders like Marc Rich.
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"Iranians have been around for thousands of years trading and selling and getting around various constraints and whatnot,” the former secretary of state told host Jake Tapper. “They're very clever. And they know what sanctions might be coming. And I'm sure that they have done their own planning and have their own counter-sanctions strategy,” Powell said."
source: http://blogs.abcnews.com/politicalpunch/2010/05/powell-obamas-iran-sanctions-not-strong-enough.html
It does however name (and shame) the holdouts to the NPT, and it seems the only question is how far the US is willing to go to block serious pressure for a Middle East Nuclear Weapons Free Zone being applied.
I sympathize with the need to promote your book,, but your contention that sanctions on weapons and weapon procurement won't wok because Iraq oil embargo didn't work lacks logic.
re."They will not work with any product or service that is highly sought after. "
We seem to be going around in cognitive circles here.
I don't understand, are you saying that nucealr technolgy is so "sought after" that it cannot be contained? Because this is only way above statement can be construed as a reply to my point,
I repeat:" your contention that sanctions on weapons and weapon procurement won't work because Iraq oil embargo didn't work lacks logic. "
If you have a reply to that statement, please provide it.
If a powerful country or large group of countries decides to not obey them (openly,or passively) they're not going to be effective.
If a country has the resources to mostly make up for the effects of the sanctions, and the people of that country see those sanctions as unjustified, sanctions are not going to be effective.
And, if the country under sanctions has something to offer to trade with those willing to break the sanctions, and that something is offered under profitable terms, sanctions are not going to be effective.
Israel has continued to ignore the sanctions that various states have imposed on it due to the first two reasons.
Iran has continued to ignore the sanctions that various states have imposed on it due to the second two reasons. And more and more, also the first.
Sanctions on South Africa didn't work for the first and last reasons, until both the reasons began to fail.
And the US attempt to impose yet more sanctions on Iran is likely to run into the perfect storm where all the reasons for sanctions to fail will be in full play, and also is going to cost the US a lot.
There are two big problems with the sanctions regime. One is that oil is, by its nature, fungible, and in high demand, and the other is that more and more of the world is seeing it as the US attempting to dictate to the world based on its prejudices.
You need to keep an eye on articles like this one. The sour crude from Iran is being avoided.
http://www.bloomberg.com/apps/news?pid=20601072&sid=aG4gUZO8reSE
and more importantly this one:
http://www.business24-7.ae/companies-markets/logistics/volume-of-crude-stocks-stored-at-sea-increasing-2010-05-23-1.247047
Fact is, the Ayatollahs can't sell the stuff. With prices where they are, they are stuck. People are thinking about drilling in Brazil in very expensive areas.
It remains to be seen if the crude is being avoided or if it is being held back from the market by Iran because of the relatively low prices (they are about 20 percent lower than two months ago).
I just can't imagine China refraining from buying Iranian crude.
Dont they (not the Iranians) but nations build refineries for a specific type of crude product? I mean, say if the Chinese import Iranian crude product, dont they build thier refineries to best refine Iranian oil product?
So...seeing that the whole of the world is having a bad economic time, and that would of course bring down the need for oil, and of course the price, isnt everyone experiencing the same thing?
The second article seems to be using Iran as an 'example', but seems to be saying that this is a problem for all crude product.
I think you are implying that no one wants Iranian oil, when the truth is, no one needs as much oil as is being pumped...anywhere.
Sanctions are necessary justified and need to be tried . If it doesn't work, fine: in about 10 years it can be removed or whenever rotten Iranian religious junta loses power: whichever comes first.
But, as Secretary of Defense Robert Gates added: "The resolution provides a new legal platform that allows individual countries and organizations, such as the E.U., to take significantly more stringent actions on their own, that go way beyond, well beyond, what the U.N. resolution calls for in and of itself." (Source: Voice of America).
Some American lawmakers are trying to target Iran's oil exports. The Wall Street Journal just reported that a proposed U.S. Bill takes aim at Iran oil partners: http://online.wsj.com/article/SB10001424052748704792104575264561801614780.html
I don't say, by the way, that sanctions are not justified. But I severely doubt they will be effective.
With due respect, it is pretty obvious you don't support sanctions on Iran.
Article VI. The states undertake to pursue "negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament", and towards a "Treaty on general and complete disarmament under strict and effective international control".
Article X. Establishes the right to withdraw from the Treaty giving 3 months' notice. It also establishes the duration of the Treaty (25 years before 1995 Extension Initiative).
THERE IS NO SINGLE CREDITABLE EVIDENCE THAT IRAN FLOUTS THE NPT RULES OR DEVELOPES NUKES.
Does US want Iran to quit the treaty so that Iran has no right to enrich uranium ?
The NPT consists of a preamble and eleven articles. Although the concept of "pillars" appears nowhere in the NPT, the treaty is nevertheless sometimes interpreted as a three pillar system, with an implicit balance among them:
non-proliferation,
disarmament, and
the right to peacefully use nuclear technology.
Article I:Each nuclear-weapons state (NWS) undertakes not to transfer, to any recipient, nuclear weapons, or other nuclear explosive devices, and not to assist any non-nuclear weapon state to manufacture or acquire such weapons or devices.
Article II: Each non-NWS party undertakes not to receive, from any source, nuclear weapons, or other nuclear explosive devices; not to manufacture or acquire such weapons or devices; and not to receive any assistance in their manufacture.
Article III: Each non-NWS party undertakes to conclude an agreement with the IAEA for the application of its safeguards to all nuclear material in all of the state's peaceful nuclear activities and to prevent diversion of such material to nuclear weapons or other nuclear explosive devices.
Article IV: 1. Nothing in this Treaty shall be interpreted as affecting the inalienable right of all the Parties to the Treaty to develop research, production and use of nuclear energy for peaceful purposes without discrimination and in conformity with Articles I and II of this Treaty.
by Massoud Parsi
http://english.aljazeera.net/focus/2010/05/201052271814825709.html
BTW, newsflash, Fidel has at least semi-retired.