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Friday, December 20, 2013

Why Kirk-Menendez II is a necessity

Jonathan Schanzer points out what is perhaps the best reason for the new sanctions legislation proposed by Senators Mark Kirk and Robert Menendez: Removing the ambiguity that is leading to a mad rush to invest in Iran.
But, as the Daily Beast's Eli Lake and Josh Rogin recently reported, the administration's designations have trailed off significantly in recent months, even though the JPA explicitly allows for more designations under the existing regime. Indeed, before the election of Iran's President Hassan Rouhani in June, no less than 183 entities were designated. Following the election of Rouhani, widely touted as a moderate, there have been only 29 such designations.
In other words, it's highly unlikely that the National Security Council, State, Treasury and Justice Departments just happened to approve these most recent designations in the wake of the Geneva deal. In all probability, they got the coveted interagency thumbs up weeks or months ago. But the administration likely held off on designating new entities for fear that rapprochement with Iran was still new and fragile.
With an angry Congress openly questioning the administration's will to hold the line on sanctions, these latest designations were designed to prove a point: that the White House can be serious about enforcing sanctions while also negotiating their end in a final nuclear deal.
If that sounds like a fine line to walk, that's because it is. Actively punishing Iran for its mendacity while trying to selectively reduce other sanctions (in this case, automotive, petrochemicals and precious metals) for the sake of diplomacy projects two competing messages.
It should come as no surprise that this dual approach has inspired the confidence of neither Iran nor Congress. Indeed, the only actors out there who are heartened by Washington's conflicted policies are the companies eyeing investments in Iran. They see confusion, and therefore ambiguity. And that's a whole lot better than the investment environment of just a few months ago, when Iran appeared to be completely off limits.
The new Senate bill will the provide Washington with an insurance policy against Iranian deception. If it passes, it would legislate the imposition of new sanctions the moment Iran violates the terms of the interim deal.
That would immediately re-inject fear into the equation and deter firms looking to cash in on the potential growth opportunities in Iran. More importantly, it would untangle Washington's impossibly hedged Iran policy. And though the White House will insist otherwise, it promises to rearm the administration with the clear leverage that ultimately brought Iran to the table in the first place.
Read the whole thing.

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