Sanctions Debate Heats Up

With mid-term elections only six months away, many lawmakers are eager to demonstrate their strong support for Israel, which has argued for the adoption of “crippling” sanctions against the Islamic Republic as the only way to halt its alleged effort to acquire nuclear weapons short of a military attack.

But they are running into opposition from the administration of President Barack Obama which, while declaring that it, too, favours sanctions, insists that it be given sufficient time and flexibility in imposing them to ensure that they do not undermine U.S. efforts to rally other key countries behind multilateral sanctions or alienate key sectors of the Iranian population.

Meanwhile, the entire strategy of using sanctions as an effective way to pressure Iran to curb its nuclear programme is coming under renewed question from several quarters.

Neo-conservatives and other right-wing hawks, notably former U.N. Amb. John Bolton and Weekly Standard editor William Kristol, argue that sanctions – whether sweeping and unilateral as those being considered by Congress, or more narrowly targeted and multilateral as those favoured by Obama – are unlikely to deter Iran from acquiring a nuclear weapon. In their view, Washington needs to prepare for a military attack on Iran’s nuclear facilities or, in any event, not prevent Israel from carrying one out.

At the same time, some Iran specialists fault the administration for not making more generous offers to Iran during its “engagement” phase last year before moving to a containment strategy that includes additional sanctions, as well as other forms of pressure.

In their view, the “pressure track” – whether unilateral or multilateral – will not only prove ineffective, but will also strengthen Tehran’s hardliners and ultimately make war more, rather than less, likely. Cheered on by the so-called “Israel Lobby” centred around the powerful American Israel Public Affairs Committee (AIPAC) and its Christian Zionist allies, the House of Representatives voted 412-12 last December to approve a far-reaching sanctions bill that, among other measures, would penalise foreign companies that export gasoline and other refined petroleum products to Iran.

The Senate followed with an even more sweeping bill aimed at third-country companies the following month.

Largely at the administration’s behest, however, the Democratic leadership of both the House and the Senate held off selecting its delegates to a House-Senate conference committee charged with reconciling the two bills until just last week.

The administration had requested the delay to carry out intensive consultations with other members of the U.N. Security Council in hopes of getting it to approve a fourth round of sanctions against Iran, the specific terms of which are currently being negotiated.

The Council has approved three previous sets of sanctions against Iran since 2006 for failing to heed demands to stop enriching uranium and to clear up unanswered questions posed by the International Atomic Energy Agency (IAEA) regarding its nuclear programme.

The administration has argued that imposing unilateral sanctions before the Council acts would threaten the multilateral consensus it is building with its European partners to get a strong U.N. resolution.

“We want to make sure we don’t send wrong messages before we get everyone signed up on what we can achieve internationally,” Secretary of State Hillary Clinton warned lawmakers last month.

The administration has also argued that Obama should be given the authority to exempt from punishment any companies from other nations, such as China, that he deems are cooperating with Washington’s Iran policy – a position that was harshly criticised, especially by Republicans, at Wednesday’s opening conference committee hearing.

In addition, the administration said that sweeping sanctions, such as the one punishing foreign companies that export gasoline to Iran, could, if enforced, harm and ultimately alienate the general public in Iran and thus trigger a nationalist backlash that could benefit hardliners, notably the Iranian Revolutionary Guard Corps (IRGC), and weaken the opposition Green Movement.

As a result, the White House, which has reportedly stepped up its lobbying efforts on Capitol Hill significantly in the last two weeks, is pressing the conferees both to grant the president significant authority to waive sanctions if he deems it necessary to the national interest and to delay final passage of a compromise bill until the end of next month.

Most analysts believe that the Security Council is unlikely to reach agreement on a new sanctions resolution before then, and, in any event, Lebanon, which will preside over Council in May and whose government relies on the support of Tehran’s local ally, Hezbollah, is expected to prevent any resolution from coming to a vote.

In its efforts to rally support for a new sanctions resolution, the administration reportedly dropped several key provisions in its initial draft, including sanctions that would deny Iran access to international banking services, capital markets and to international airspace and waters for its commercial trade.

The administration and its European allies are now reportedly pressing for a resolution that would include an arms embargo on Iran, backed by the authority to seize Iranian vessels suspected of carrying weapons or nuclear-related material, other measures designed to discourage commercial relations with Iranian companies allegedly involved in nuclear transactions, and restrictions on foreign investment in Iran’s energy sector.

Some of these provisions are expected to be resisted by veto-wielding China, a major investor in Iran’s energy sector, as well as by Brazil and Turkey, and may be further watered down.

Analysts on Capitol Hill believe that the administration, which is strongly backed by business and trade associations whose members have extensive international interests, is likely to succeed in getting significant waiver authority in the final version, despite the wishes of AIPAC and its allies that a sweeping sanctions bill with very limited waiver authority be approved as quickly as possible.

The administration has bolstered its case, particularly with fellow-Democrats, by quietly pledging to follow up a U.N. resolution with much-tougher measures targeted on specific IRGC-controlled commercial institutions, including, for example, Iran’s national shipping line, to be adopted by its European and other western allies on their own.

The sanctions debate, both in Congress and the Security Council, has already had an impact, according to administration officials. They point out that a number of multinational companies and subsidiaries that have done business with Iran have either severed their ties with Iranian partners or reduced their operations there.

Among the most significant in the energy sector are Royal Dutch Shell, Malaysia’s state oil company Petronas, Netherlands-based Vitol, Swiss-based Glencore and Trafigura. France’s Total announced this week that it will end gasoline sales to Iran if sanctions are approved.

Jim Lobe’s blog on U.S. foreign policy can be read at http://www.ips.org/blog/jimlobe/.