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Obama's Charade on Iran Sanctions

Today, the United Nations Security Council adopts a new resolution imposing sanctions on the Islamic Republic of Iran over its nuclear activities. Predictably, the Obama Administration is working to spin its "victory" in New York as both a great diplomatic achievement and a serious intensification of international pressure on Iran over the nuclear issue. It is neither.

The resolution will be adopted by a Security Council that is more deeply divided over it than over the three sanctions resolutions against Iran adopted by the Council while George W. Bush was in the White House. It is particularly significant that Brazil, Turkey and Lebanon are refusing to support the resolution. In international political terms, this will very likely turn out to be a pyrrhic victory for the Obama Administration--the Administration will win a narrow, tactical battle today, but at great cost to America's long term strategic position, in the Middle East and globally.

Moreover, by any substantive criterion, the sanctions actually authorized in today's resolution are remarkably weak--for the Obama Administration, embarrassingly so (although you won't hear them admit it). In the main body of the resolution, there are, literally, no sanctions limiting the capacity of the Islamic Republic to produce and export hydrocarbons. The Obama Administration wanted energy sanctions, but China made clear that it would not support a resolution containing them. So they were not included in the final text. Likewise, there are no sanctions barring the extension of financial services, insurance, reinsurance, etc. to Iranian individuals and entities.

In fact, the only mandatory measures in the resolution--that is, measures which all member states will be obligated to apply--are the following:

  • States will be required to block Iranian investments outside the Islamic Republic in uranium mining or the production of nuclear materials and technology.
  • States will be barred from supplying Iran with specified categories of heavy weaponry that could potentially be used in offensive military operations. (States, however, will be free to continue supplying Iran with weapons and military equipment outside the specified categories--including, for Russia, the S300 anti-aircraft missile.)
  • States will be required to prevent individuals designated in an annex to the resolution (more on this below) to travel outside of Iran--except where such travel is justified on the grounds of humanitarian need or religious obligation. This provision is similar to travel restrictions imposed on individuals designated in annexes to the previous sanctions resolutions.
  • States will be required to freeze assets of individuals and entities designated in annexes to the resolution (again, more on this below). This provision is also similar to asset freezes imposed on individuals and entities designated in annexes to the previous sanctions resolutions.
Beyond these mandatory sanctions, there are other, essentially "optional" measures which states may apply if they are so inclined:
  • States may impose limits on the extension of financial services to Iranian individuals and entities by financial institutions under their jurisdiction, if they believe that those Iranian individuals and entities are involved in "proliferation-sensitive nuclear activities" or "the development of nuclear weapon delivery systems". States may also, if they choose to do so, freeze whatever assets these individuals and entities have in their jurisdictions.
  • States may inspect ships on the high seas suspected of carrying restricted items to Iran--but only with the consent of the state under which any given suspect ship is registered (the so-called "flag state"). Likewise, states may inspect any and all cargo going to and coming from Iran in their jurisdictions, if states determine that there are "reasonable grounds" to believe the cargo contains prohibited items.
The Obama Administration has indicated that it anticipates these provisions will provide a legal basis for other states--like members of the European Union and Japan--to enact tougher national sanctions of their own. But the United States is not going to get anything approaching universal compliance with these "optional" sanctions. The net effect will be to accelerate the reallocation of business opportunities in the Islamic Republic from Western states to China and other non-Western powers.

There has been a remarkable amount of sloppy reporting by mainstream newspapers over the last 24 hours or so with regard to the annexes accompanying the new sanctions resolution. In reality, there are four annexes to the resolution. One lists the designated "individuals and entities involved in nuclear or ballistic missile activities". Another annex lists "entities owned, controlled, or acting on behalf of the Islamic Revolutionary Guard Corps". A third lists "entities owned, controlled, or acting on behalf of the Islamic Republic of Iran Shipping Lines". Finally, the revised P-5+1 incentives package presented to the Islamic Republic in 2008 is once again included as an annex. The first three of these annexes are largely the product of intensive negotiations between U.S. and Chinese diplomats.

  • Some journalists claim that there are forty-one new individuals captured in the annexes. This is wrong. In fact, there is only one new individual listed; the other forty individuals are already listed in annexes to previous sanctions resolutions.
  • Among the entities "involved in nuclear or ballistic missile activities", the United States was able to win the agreement of China and other Council members to include only one bank that had not been previously listed--and that bank is a subsidiary to Bank Mellat, which had been previously designated.
  • Ostensibly, there are 15 entities listed as "owned, controlled, or acting on behalf of the Islamic Revolutionary Guard Corps". But this is seriously misleading. There is, in fact, only one Revolutionary Guard-affiliated entity captured in the annex--the Khatam al-Anbiya construction company. The other 14 entities are all either subsidiaries of Khatam al-Anbiya or subsidiaries of subsidiaries of Khatam al-Anbiya.

Secretary of State Hillary Clinton says that this resolution will confront Iran with the most significant sanctions it has ever faced. But that statement seems to overlook the Iran-Iraq war, when the Islamic Republic was cut off from international trade and economic activity to a much greater extent than this or any Security Council resolution will ever achieve.

The Obama Administration clearly has its talking points ready--it will claim that these sanctions are broader and tougher than any previous sanctions. But this is all political theater. No one in the Administration really believes that these sanctions will compel Tehran to alter its decision-making and behavior. But the Obama Administration is no longer interested in finding a solution to the Iranian nuclear issue--if it ever was.

As we predicted in a May 2009 Op-Ed in The New York Times--before the Islamic Republic's controversial presidential election--the Obama Administration has already "checked the box" to show that engaging Iran doesn't work. Now it has started the process of "checking the box" to show that the "broadest and toughest" sanctions ever imposed on the Islamic Republic don't work. And that will leave the Obama Administration with no other options except formal adoption of regime change as the explicit goal of its Iran policy--and/or military strikes against the Islamic Republic.

This post will also appear on www.TheRaceForIran.com.

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