Israel Matzav

US watering down sanctions hoping Russia and China will approve

The United States is continuing to pursue sanctions for the sake of sanctions rather than pursuing sanctions that have a snowball in hell's chance of working. That's the upshot of a report in the Wall Street Journal that the United States is 'softening' sanctions in a bid to get Russia and China to agree to them.

The U.S. has backed away from pursuing a number of tough measures against Iran in order to win support from Russia and China for a new United Nations Security Council resolution on sanctions, according to people familiar with the matter.

Among 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, according to the individuals.

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The current resolution still would target major power centers in Iran, in particular the Islamic Revolutionary Guard Corps, the country’s elite military force, according to a person familiar with the draft. It would also stiffen a broad range of existing sanctions, including the search and seizure of suspicious cargo bound for Iran through international waters and a ban on states offering financial assistance or credits for trade with Iran. If approved, they would be the most stringent measures Iran has faced.

Yet the original U.S. draft would have gone much further. 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. The revised version calls for interdiction only of shipments that would evade already-existing sanctions.

The earlier resolution 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. The new draft calls only for unspecified “additional steps” to enforce current sanctions on insurance.

The previous draft would also have barred Iran’s access to international capital markets by prohibiting foreign investment in Iranian bonds. The country hasn’t traditionally relied on debt markets, but earlier this month a state-owned Iranian bank, Bank Mellat, announced an offer to sell bonds valued at €1 billion ($1.35 billion) to fund development of natural-gas field in South Pars. The new draft makes no mention of Iranian bonds.

The current draft notes “with serious concern the role of the Iranian Revolutionary Guard” in “Iran’s proliferation sensitive nuclear activities and the development of nuclear weapon delivery systems,” according to a person familiar with its contents.

The U.S. Treasury Department has identified billions of dollars in assets controlled by the Revolutionary Guard in financial and commercial sectors, including at least $7 billion in the energy sector and a controlling stake in Iran’s largest telecommunications provider, Telecommunication Company of Iran.

The 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,” according to the person familiar with the draft.

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.

Read the whole thing. President Obama is unable or unwilling to lead without a Security Council resolution, and as a result he is bending over backwards hoping Russia and China will not exercise their vetoes. But the result is going to be sanctions that are far too little and far too late to have any chance of stopping Iran. If Iran is to be stopped, it will have to be done militarily. Is Prime Minister Netanyahu still up to the task after two weeks of Obama beating him up over the 'Palestinians'?

A couple of weeks ago, I drove a close friend and neighbor home from town on a Friday afternoon. We started talking about Iran, and my friend - who is far more worldly than most of my ultra-Orthodox friends - told me that it is clear that our only hope now is God and we must all repent. I told him that I agree with him, but I don't see all of us repenting. I told him that in the immediate aftermath of the Six Day War, many people saw the miraculous victory and repented, but if God had insisted on penitence first, there would be no State of Israel today. We must hope once again that God will accept penitence after the fact. At least there's more chance of that happening than of Obama actually attacking Iran on our behalf.

What could go wrong?

posted by Carl in Jerusalem @ 5:41 PM