Israel Matzav

If the US government doesn't take Iran sanctions seriously, why should anyone else?

Many of you are probably aware that the United States passed the Iran Libya Sanctions Act (now known as the Iran Sanctions Act) in 1996. Some of you may even recall a New York Times article that I blogged back in March that spoke of billions of dollars in US government business going to companies that also did business with Iran. But I doubt that most of you are aware of the extent to which three US administrations - Clinton, Bush and now Obama - have been reluctant to enforce those sanctions and have in fact undermined their enforcement. I've just been enlightened by the testimony of Danielle Pletka, Vice President of Foreign and Defense Studies at the American Enterprise Institute, before the Senate Committee on Homeland Security and Governmental Affairs, and I am about to enlighten you. What Ms. Pletka's testimony makes clear is that sanctions are only as good as their enforcement, and that there is and has been no will in the White House - regardless of its occupant - for the last 14 years to enforce sanctions. That is one reason why we are where we are today regarding Iran.

The larger problem is that the United States government is for the most part indifferent as to whether beneficiaries of U.S. taxpayer dollars are doing business in Iran. And that is entirely in keeping with the underlying trouble: For the last decade and a half, the USG has not taken the Iran sanctions legislation passed by the Congress seriously.

Under the ISA, there is a full menu of measures available to sanction entities found to be doing business with Iran, which range from a slap on the wrist to punitive steps that could be "crippling" to a designated company. Indeed, Section 6 of the Act targets two of the focuses of recent articles and today's GAO report: The sanction in Paragraph (1) offers "denial of Export-Import Bank loans, credits, or credit guarantees for U.S. exports to the sanctioned entity;" and paragraph (5) offers a "prohibition on U.S. government procurement from the entity." Had there been designations in accordance with the Act by the Department of State, it would not have been necessary for the taxpayer to subsidize any of these Iranian business partners.

But since the passage of the Iran Libya Sanctions Act in 1996, only three companies taking part in one project have been designated for violating its terms. This occurred in 1998, and those sanctions were then immediately waived. At the time, Secretary of State Madeleine Albright stated that: "it is important to the national interest to waive the imposition of sanctions against the three firms involved. Among other factors, I considered the significant, enhanced cooperation we have achieved with the European Union and Russia in accomplishing ILSA's primary objective of inhibiting Iran's ability to develop weapons of mass destruction and support of terrorism."

In the wake of Albright's waiver, hundreds of companies poured into the breach, Russia stepped up nuclear cooperation with Iran and between 2000 and 2005, EU-Iran trade almost tripled.

In the years since the passage of ILSA, while numerous firms have done business in Iran's energy sector, no project bar the one example has merited more than an inconclusive and half-hearted investigation by the Department of State. The operative language in the law, as amended, states that: "The President should initiate an investigation into the possible imposition of sanctions under section 5(a) against a person upon receipt by the United States of credible information indicating that such person is engaged in investment activity in Iran as described in such section."

The operative word in that text is "should". An amendment to the law that would have required the President to make such a determination within a time certain was opposed by the White House, and was ultimately excluded from revisions to ILSA. Indeed, this is the history of what we now call the Iran Sanctions Act. Congress acts to force the Executive Branch to seriously pursue a stringent sanctions regime against Iran, and the Executive Branch--whether led by either a Democratic or a Republican administration--resists.

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As members of this Committee are aware, Congress is once again considering legislation intended to strengthen and expand the Iran Sanctions Act. And once again, the Administration in power is seeking to weaken the provisions of this legislation. I note the familiar sounding plaint in Deputy Secretary of State Jim Steinberg's SAP letter on S. 908 in which he writes: "It is our hope that any legislative initiative would preserve and maximize the President's flexibility, secure greater cooperation from our partners in taking effective action, and ultimately facilitate a change in Iranian policies."

I understand that State is playing an active role behind the scenes in conference seeking to weaken key provisions of the new Iran sanctions legislation, including demands to create an exemption for so-called "cooperating countries," raise thresholds for sanctioning suppliers to Iran's gas refining industry, and finally keep open the loophole that allows the State Department to avoid serious investigations of ISA violators, and more.

There is no silver bullet to address Iran's nuclear weapons program. No single bill and no single set of sanctions can "deliver" the government of the IRI. But in light of this rather pathetic history of Executive Branch evasion, one may legitimately wonder what would have happened had the White House had less latitude to ignore decades of investment in Iran's energy sector.

It's kind of long, but please read the whole thing.The reason Iran is on the cusp of becoming a nuclear power is that successive US administrations have been indifferent or worse to Iran's actions. Those who believe that only Israel will pay the price for America's duplicity are fooling themselves. And if the current sanctions bill ends up containing any of the 'optional' provisions of the previous bill, it will be doomed from the outset regardless of how harsh the sanctions otherwise may be.

If the United States cannot or will not demonstrate leadership in stopping Iran, Iran will not be stopped unless Israel stops it militarily. Unfortunately, to date, the only area in which President Obumbler has been willing to take the lead is in pulling down America's pants by announcing how many nuclear weapons it has.

What could go wrong?

posted by Carl in Jerusalem @ 7:32 AM