Iran

The New York Times recently published an article about "sanctions" busting by Iranian ships., showing just how leaky the current sanctions regime is - it is a slow process adding names to the list (as the sanctions are not blanket, they target specific individuals and entities), updating these and even agreeing to extend sanctions takes a considerable amount of time.

A good example is the recent attempt by the US government to extend the sanctions regime against Iran (and hopefully to prevent the production of nuclear weapons), by targeting foreign companies who are supplying Iran with refined petroleum, or assisting Iran in developing its abilities to do so itself. The Iran Diplomatic Enhancement Act has bipartisan support, and made it through the lower legislative chambers relatively quickly. I became aware of this act approximately a year ago, as an existing client of the insitution I was working for was named as a potential target. However, despite almost unprecedented support, this act is still not in place.

Below is a summary of the sanctions currently in place against the Iranian regime:

EU – April 2005 o Mainly targeted at certain persons, entities and bodies engaged in Iran’s nuclear weapons program. o Embargoes on: § Arms. (weapons and dual-use goods) § Export prohibitions on equipment which could be used for the development of nuclear weapons. § Prohibition of certain services such as financial support. § Financial – Freezing of funds and economic resources. § Financial – Investment prohibitions. § Financial – Prohibition of loans to Government of Iran. § Financial – Restrictions on public provided financial support for trade. (e.g. export insurance) § Transportation – Restriction on admission into the EU of certain persons. (including Mahmoud Ahmadinejad – President of Iran) US – November 2006 o Sanctions have been in place since 1987 in response for Iran’s belligerent actions and support for terrorism. Recent extensions of sanctions have been related to Iran’s refusal to halt their uranium- enrichment program. o Sanctions on: § Exports and Imports (both direct and indirect), brokering, financing and facilitation are prohibited with limited exceptions. § US persons are prohibited from approving, facilitating and engaging in ANY transactions with goods, services and technology of Iranian origin or those owned by the Iranian government. § Trading and financing of Iranian petroleum products is prohibited. § Financial – US persons (including foreign nationals working in the US), entities are prohibited from transacting with Iranian financial institutions as well as any financial transactions with Iranian entities owned by the Iranian government. These persons and entities are listed in the SDN list. § Financial – US depository institutions are prohibited from processing transfers involving Iran that originate and end with non-Iranian foreign banks. (U-Turn transactions) §Foreign persons are prohibited from re-exporting sensitive US origin goods, services and technology to Iran.

Despite being relatively comprehensive and effectively placing a stranglehold on the regime, these sanctions still do not seem to be working. Last year's contested election result still satnds; Ahmadenijad is still in power, allegations of human rights abuses have not led to any further actions by foreign governments, and Tehran continues to make aggressive noises towards Israel.

So what are the alternatives? There is the possibility of invasion, but the only two countries that seem to be supportive of this idea are the US and Israel, and both are reluctant. The EU would not support a war, nor would the UK - the British government already faces a lot of ongoing domestic criticism for its involvement in Iraq and Afghanistan, so the likelihood of having popular support for Iran is highly unlikely. In addition, the present government is a somewhat shakey alliance of parties from different sides of the political fields, facing unprecedented economic crisis at home; involvement in an unpopular war is unlikely.

There have been moves by the US and the UN to increase sanctions against Iran, but this also requires the support of all Security Council members, including Russia and China, who maintain diplomatic and economic ties with Iran. This means (as they have both have vetos), that other members have to garner their support in order to pass a new sanctions regime; not necessarily an easy task.