World Edges Towards Sanctions on Iran

Iran faces fresh trade measures as United States and allies tire of delays over nuclear issue.
April 10, 2010
Isfahan fuel manufacturing plant. Photo by Sajjad Safari, Mehr News Agancy.
Isfahan fuel manufacturing plant. Photo by Sajjad Safari, Mehr News Agancy.
President Mahmoud Ahmadinejad opening Isfahan fuel manufacturing plant, April 2009. Iranian sources say it is the most advanced
President Mahmoud Ahmadinejad opening Isfahan fuel manufacturing plant, April 2009. Iranian sources say it is the most advanced
Opening of Isfahan fuel manufacturing plant, April 2009. Photo by Sajjad Safari, Mehr News Agancy.
Opening of Isfahan fuel manufacturing plant, April 2009. Photo by Sajjad Safari, Mehr News Agancy.

United States policy toward Iran has moved from courtship to renewed confrontation as hopes for a resolution of the nuclear issue have faded.

United States policy toward Iran has moved from courtship to renewed confrontation as hopes for a resolution of the nuclear issue have faded.

While the Obama administration insists that the door remains open to negotiations, the Tehran government appears paralysed by internal divisions and the US and its allies are preparing new economic sanctions.

The US appears to have made progress persuading Russia and China to help draft a new United Nations Security Council resolution imposing more penalties on the Iranian regime. However, it remains to be seen whether additional sanctions will slow Iran’s nuclear programme - or boost its embattled political opposition.

“Sanctions cannot be an end to themselves,” said Suzanne Maloney, an Iran specialist at the Brookings Institution. “I don’t know that the administration has a real clear idea of what comes next.”

An official at the US mission to the UN, who asked not to be named because of the sensitivity of the topic, said “the discussion is advancing” from the stage of senior foreign ministry officials to negotiations on the text of a draft resolution in New York.

“It could happen quickly,” the official said.

Obama told a news conference with visiting French president Nicolas Sarkozy on March 30 that he sought a new resolution within “weeks”.

The US hopes to pass a measure – the sixth against Iran since 2006 and the fourth to specify penalties - in April while Japan holds the presidency of the Security Council. Waiting until May, when Lebanon chairs the body, could be problematic given that the Iranian-backed group Hezbollah has veto power in the Lebanese government.

Earlier objections by Russia and China to more sanctions appear to be fading as their relations with the US warm and international momentum grows for non-proliferation.

The US and Russia on April 8 signed a new Strategic Arms Reduction Treaty in advance of an April 12-13 Washington summit on nuclear security and a review of the Non-Proliferation Treaty in May. On April 6, the Obama administration unveiled a new nuclear posture that promises to develop no new nuclear weapons but retains the option of strikes on countries deemed not in compliance with their non-proliferation obligations, such as Iran.

Iran, meanwhile, has organised its own nuclear conference in Tehran on April 18-19 in an apparent effort to counter negative publicity about its refusal to take steps to increase global confidence that it is not seeking to develop nuclear weapons.

Iran is particularly nervous about Russia and China, which hold veto power in the Security Council.

“The Iranians have always believed the Russians would sell them out,” Trita Parsi, president of the National Iranian American Council, said. “At the end of the day, Iran has no strategic relations with China either. The Chinese will not risk a huge battle with the United States over Iran.”

China’s president Hu Jintao is attending the Washington nuclear summit on April 12-13 - a gesture towards the US that could be tied in part to China’s desire to avoid sanctions of its own.

The US Treasury Department was to have decided by April 15 whether China is manipulating its currency to keep the renminbi artificially low against the dollar and thus subsidise exports. That decision will now be postponed until June, giving China time to adjust its currency – and vote for an Iran resolution.

While Iran increasingly relies on trade with China, China has other options to satisfy its growing demand for oil. Both the United Arab Emirates, UAE, and Saudi Arabia have offered to supply additional oil to China to replace deliveries from Iran.

Chinese warships docked in the UAE on March 24, the first call at a Gulf port by the Chinese Navy and a signal to Iran that China has plenty of other friends in the region.

Kenneth Katzman, an Iran specialist at the Congressional Research Service, said the upcoming UN resolution might restrict trade credits to Iran, building on a 2008 measure that urged member states to “exercise vigilance in entering into new commitments for publicly provided financial support for trade with Iran, including the granting of export credits, guarantees or insurance”.

The resolution is also expected to freeze the assets of and bar travel by more members of Iran’s Revolutionary Guard Corps and to block trade with more companies run by the guards, Katzman said.

Separate legislation in the US Congress seeks to block foreign companies from providing Iran with gasoline and other refined petroleum products. Iran imports about 30 per cent of its gasoline. Bills have passed both the House and the Senate and are now headed to a conference committee. The White House has been lukewarm about the legislation, which it sees as potentially hurting ordinary Iranians, but may accept a law that includes a presidential waiver.

“We’ve engaged, we’ve reached out and now it’s time for pressure,” said the US official at the UN “We are not trying to hurt average Iranians. We are trying to get the regime to change its behaviour.”

Many analysts say sanctions will hurt an already fragile Iranian economy but not stop the Iranian nuclear programme.

“Iran has already reached a stage where it could potentially assemble nuclear weapons,” Alireza Nader, an Iran specialist at the Rand Corporation, said. “It’s a political decision whether to go forward and whether sanctions can shape that political decision is unclear.

The change in US policy – from engagement to the “pressure” track – is in keeping with an Obama administration timeline that offered Iran talks without preconditions but set an informal deadline of the end of 2009 for progress on the nuclear front.

The shift was evident in Obama’s Persian New Year (Nowruz) messages.

In last year’s message, he used the occasion of the annual celebration of the vernal equinox – celebrated in Iran for millennia - to seek “the promise of a new beginning" with Iran.

He offered "a future with renewed exchanges among our people, and greater opportunities for partnership and commerce…where the old divisions are overcome, where you and all of your neighbours and the wider world can live in greater security and greater peace".

A year later, the message had changed from a bright vision of economic and cultural ties to a sober acknowledgement of continued stalemate.

“Faced with an extended hand, Iran’s leaders have shown only a clenched fist,” he said.

“The Nowruz message last time around was about creating space for diplomacy,” Parsi said. “This time, he’s preparing Iranians for more sanctions.”

The latest developments confirm a three-decade pattern in US-Iran interactions that whenever the US was ready for progress toward reconciliation, Iran was not and vice-versa.

“We are on a pressure track but I still don’t believe the president is excited about that,” Parsi said. “If the White House could get the Tehran research reactor deal, they would happily do it.”

Parsi was referring to the offer by the US and its diplomatic partners to provide Iran with fuel for a reactor that produces medical isotopes if Iran would send abroad most of its stockpile of low-enriched uranium. On October 1, after a meeting in Geneva that included a 45-minute session between Undersecretary of State for Political Affairs Bill Burns and chief Iranian nuclear negotiator Saeed Jalili, US officials said Iran had agreed “in principle” to the deal.

Daniel Poneman, a deputy energy secretary, who held a follow up meeting later in October in Vienna with Iran's ambassador to the International Atomic Energy Agency, Ali Ashgar Soltanieh, told the Washington Institute for Near East Policy on March 17 that the US would have been willing to sweeten the deal by inspecting the Tehran reactor – originally provided by the US four decades ago - “to help assure that the Tehran research reactor was safe”.

This would have represented the first civilian nuclear cooperation between the two countries since the fall of the Shah in 1979, a significant precedent.

But Iran’s unsettled domestic political climate in the wake of its disputed June 12 presidential elections appears to have doomed the prospects for a settlement. The nuclear proposal, which initially had the support of President Mahmoud Ahmadinejad, was harshly attacked last year both by conservatives, such as parliament speaker Ali Larijani, and by Mir Hossein Mousavi, Ahmadinejad’s chief election rival, as a sell-out of Iranian interests.

Iran’s Supreme Leader, Ayatollah Ali Khamenei, also appears to have ruled out a deal with the US.

Responding to Obama’s Nowruz message, Khamenei said the US was not sincere. “You cannot speak about peace and friendship while plotting to hit Iran,” he said on March 21 in his home city of Mashhad. “We said that if they are extending a metal hand inside a velvet glove, we won’t accept.”

Iranian officials have blamed the US and other foreign governments for inciting the Green Movement that erupted in Iran following the June elections. The US has denied any involvement, but has criticised the regime for a crackdown that has included shooting unarmed demonstrators, executing two political prisoners and arresting thousands of students and civil society activists.

The Obama administration has also lifted sanctions on computer software that could help Iranians evade internet censorship.

While US officials say they want to increase cultural contacts with Iran, relations are apt to become increasingly strained barring success for the opposition, which appears unlikely in the short term.

“Sanctions and containment,” Katzman said. “That’s where we are.”

Barbara Slavin is an independent journalist and the author of “Bitter Friends, Bosom Enemies: Iran, the US and the Twisted Path to Confrontation”.

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