US Softens Sanction Plan Against Iran

Saturday, 27 March 2010

US Softens Sanction Plan Against Iran

WSJ, Via the RFI/ here

The all-too-predictable dynamics surrounding a potential new Iran sanctions resolution in the United Nations Security Council continue to play out just as we have anticipated. As some commentators are leaping on media stories that one of China’s diplomats took part in a P-5+1 conference call yesterday about a possible resolution, The Wall Street Journal reports today that the Obama Administration is already backing away from a number of the “tougher” measures that it originally included in the current draft resolution, primarily to maximize chances for winning Russian support and Chinese acquiescence (at least) for a watered-down resolution. According to the WSJ,
“Among key provisions removed from the original draft resolution the U.S. sent to key allies last month were sanctions aimed at choking off Tehran’s access to international banking services and capital markets, and closing international airspace and waters to Iran’s national air cargo and shipping lines…The cargo sanctions initially named Iran Air and Islamic Republic of Iran Shipping Lines and demand a blanket ban of their airplanes and ships from other countries’ airspace or territorial waters.”
As the WSJ points out, these measures “would have made it difficult for Iran to insure imports and exports of oil and other essential commodities, by barring foreign insurers from serving international transport contracts from Iran.” Other provisions deleted from the original draft text would “have barred Iran’s access to international capital markets by prohibiting foreign investment in Iranian bonds.”
According to the WSJ, the current draft still contains a prohibition against states offering financial assistance or credits for trade with Iran as well as a comprehensive international arms embargo against Iran. Furthermore, the current draft contains provisions specifically targeting the Islamic Revolutionary Guards Corps. In particular, the current draft
“would force an international freeze on the assets of the entire Revolutionary Guard and ‘any individuals or entities acting on their behalf or at their direction,’ and on ‘entities owned or controlled by them, including through illicit means’…If enforced, the proposed sanctions could force the Revolutionary Guard to divest itself of some holdings to prevent major disruptions in the economy. The Revolutionary Guard’s affiliation with the country’s telecom operator, for example, could prompt foreign partners to stop connecting international calls.”
We would anticipate that some, if not all of these provisions would be watered-down or perhaps even eliminated before a final text of a new sanctions resolution could move ahead. Obama Administration officials remain relatively confident that they can win Russia’s support for a new sanctions resolution, but they will almost certainly have to give up more on the extent and rigor of the specific measures included in the resolution to guarantee Moscow’s backing. Russia, for example, has consistently insisted that proposals for an international arms embargo against the Islamic Republic be excluded from previous sanctions resolutions. Getting Beijing to abstain, at least, is essential for any resolution to move forward—and that, too, is likely to require more concessions on substance from Washington and its European partners. It seems unlikely that China (or even Russia, for that matter) would ultimately endorse a blanket prohibition on dealing with the Revolutionary Guard and U.S. Treasury Undersecretary Stuart Levey’s “hit list” of Revolutionary Guard affiliates and asset holdings—including in the Islamic Republic’s all-important energy sector.
And, of course, the United States and its European partners continue to face an uphill battle to get Brazil and Turkey (two of the Security Council’s most important rotating members) to support a new sanctions resolution against Iran. But this, too, will be necessary to get to what Obama Administration officials identify as their goal of a 14-1 vote in New York in favor of additional sanctions. (The Administration privately acknowledges that Lebanon is unlikely to do more than abstain.)
Looking ahead, the most probable endgame will play out along the lines we have anticipated: the United States and its European partners will get a new sanctions resolution, but it will be greatly watered-down from the measures they originally proposed. Moreover, the Obama Administration is likely to fall short of its goal of a 14-1 vote in the Council, which will mean that this resolution will be passed by a more divided Security Council than any of the three previous sanctions resolutions adopted against Iran. And, it’s much more likely to be June, rather than April, before we get there.
So what, exactly, is all of this going to do to advance U.S. interests? In an article this week in Time, Tony Karon recounts Secretaryy of State Hillary Clinton’s pledge to “prevent Iran from acquiring nuclear weapons.” Reviewing the state of play on international sanctions, Karon then argues that,
“The actual level of progress on the Iran sanctions front, however, has not yet caught up with Clinton’s tough talk — and there’s little sign that any of the pressure being mustered will realistically stop Iran from slowly acquiring the means to create a nuclear bomb (though the U.S. believes Tehran has not yet decided to actually build such weapons).”